MicroZones

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March, 2009
MicroZones
Applying the tactical doctrine of Divide and
Conquer to the world of Preprint Advertising
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Quote

• Military tactics are like unto water for water
  in its natural course runs away from high places
  and hastens downwards... Water shapes its course
  according to the nature of the ground over which
  it flows the soldier works out his victory in
  relation to the foe whom he is facing. Therefore,
  just as water retains no constant shape, so in
  warfare there are no constant conditions. He who
  can modify his tactics in relation to his
  opponent and thereby succeed in winning, may be
  called a heaven-born captain.- Sun Tzu

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Executive Summary

• Advertisers want to distribute advertising
  specific to particular stores on a per-store
  basis
• Newspapers have seen major preprint advertisers
  go to Valassis and other companies because they
  are capable of providing service at the store
  level Or so they claim
• Newspapers are capable of providing this level of
  service and claiming the advertising dollars
  represented
• In order to do so, we must divide our markets
  sensibly
• And thereby, conquer!

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MicroZones on Display
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Modern Advertising Needs

• Some advertisers are slowly turning away from
  traditional mass-media models
• Increasingly, many advertisers employ a variety
  of micro-marketing techniques, such as
  advertising based on specific location or store
• These needs also require the ability to analyze
  results, which makes standardized geography an
  important piece
• During tough economic times, advertisers want to
  do more things with less money, and we need to
  provide the means for them to do so or they
  will spend that money with someone else

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Itemized Needs

• Must be able to identify territory for a store
  location
• Must be able to analyze response in different
  territories
• Must be flexible enough to adapt for different
  clients or stores
• Must be able to reach every household in a
  territory

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The Competition

• Many advertisers use Valassis and other companies
  to provide a direct mail solution to the store
  level challenge
• This is usually based on postal carrier delivery
  routes
• Postal routes are fundamentally incompatible with
  newspaper home delivery routes
• Postal routes run during the day, while (most)
  newspaper routes run at night or other low
  traffic times
• Postal routes reach 100 of households contained
  in their borders, newspapers deliver somewhat
  less than that

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Why Postal Carrier Routes?

• Postal Carrier routes help ensure total market
  exposure to an advertisement
• The reason behind using postal routes is to get
  territories smaller than a ZIP code, and make
  them work with store locations
• Also, postal carrier routes are available for
  analysis advertisers can show response and ROI
  down to the store level because of these
  territories
• Any alternative would have to provide the same
  properties

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Direct mail competition and the needs

• Must be able to identify territory for a store
  location
• Using Postal Carrier Routes, Valassis assigns a
  group of postal routes to a store
• Must be able to analyze response in different
  territories
• Using the same routes, an advertiser can track
  results
• Must be flexible enough to adapt for different
  clients
• Can re-group postal routes as needed for new
  clients or new stores
• Must be able to reach every household in a
  territory
• Provided via direct mail to all prospects

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Enter the MicroZone

• By grouping Newspaper Delivery routes together,
  we can create composite areas smaller than a ZIP
  code
• By using groups of ZIP4s, we can ensure total
  market exposure by delivering to subscribers and
  mailing the rest, and still use bulk mail rates
• Using consistent groups of routes and ZIP4s, we
  can provide the necessary information to allow
  advertisers to analyze store response
• Using groups of Newspaper delivery routes in this
  way also helps keep it simple enough to sell to
  advertisers without introducing paralysis from
  too much choice

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Some Benefits of MicroZones

• MicroZones are seamless to Newspaper delivery
  carriers. Any given route delivers only one
  preprint or package of preprints
• MicroZones use existing data to define, so impact
  to systems should be relatively small with the
  caveat that there may be considerable issues at
  the packaging level
• MicroZones make preprint advertising more
  accessible to businesses with a smaller market
  footprint
• Oh yeah MicroZones can attract big advertisers
  with lots of dollars

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Things you need to build MicroZones

• Some means of capturing route information for all
  addresses. MaaX is ideal for this
• A little basic SQL
• Excel
• Mapping software, such as ArcMap, MapInfo or even
  MapPoint
• Time Patience

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Newspapers and the needs

• Must be able to identify territory for a store
  location
• By choosing Newspaper delivery routes, we can
  create clusters or Microzones that can be mapped
  and chosen by advertisers
• Must be able to analyze response in different
  territories
• Using ZIP4s, we can provide the data needed to
  analyze response in a group of routes
• Must be flexible enough to adapt for different
  clients
• Any client could choose different configurations
  of MicroZones
• Must be able to reach every household in a
  territory
• We home deliver to the active subscribers, and
  mail the rest at bulk rates via ZIP4
• And we can offer more besides

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More Besides

• A newspaper subscriber is a more valuable target
  for an advertiser than a mail recipient
• Preprints in the newspaper can be linked to ROP
  ads and coupons
• The division of Subscribers from Non-Subscribers
  allows for different preprints to be delivered
  than mailed
• MicroZones open the door to our own form of
  segmentation, and since theyre based on ZIP4s,
  theyre already compatible with Nielsen-Claritas
  PRIZM codes, and MaaX can easily bring in other
  forms of demographic data

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The Seattle Times MicroZone Story

• The Seattle Times divided the 89 core ZIP codes
  in its NDM into 234 MicroZones
• This took three people a little less than three
  days
• We mapped it, presented it, and impressed a
  client that we thought was out of reach
• The Washington Newspaper Alliance has adopted the
  MicroZone scheme throughout western Washington
  and systems and implementation are moving forward

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MicroZones on Display
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A bit closer
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One ZIP code
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Cleaned up for presentation
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Where do we go from here?

• MicroZones can help pursue major advertisers that
  were out of reach
• This would, in turn, provide a boost in revenue
• MicroZones present a small investment for a
  potentially staggering return
• If the newspaper community adopts a standard for
  MicroZone development, we could provide
  nationwide uniformity and really drive those
  national clients
• Even if a network MicroZone philosophy doesnt
  materialize, local returns should vastly outpace
  the investment

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One last thing (Adam gets preachy)

• When hard times hit, survival requires
  adaptability and new ways of thinking
• As a community, especially one with dwindling
  resources, we must find ways to depend on one
  another and support one another
• When we find strengths, we should endeavor to
  share them, and where we find weakness, we should
  take advantage of those who have strength where
  we are weak
• So, to return to the theme of Divide Conquer,
  together, we should divide our challenges, that
  we may conquer them
• This way, we can survive and become stronger by
  taking advantage of people in this network

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Questions?
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Thank you!

• Adam Wingenbach
• The Seattle Times
• Business Intelligence Data Coordinator
• [phone]
• awingenbach_at_seattletimes.com
• 1120 John St Seattle, WA, 98109