By Molly Hulsey
News product and advertiser segmentation
While a typical newspaper, broadcast outlet or website may have a large or broad audience, not all readers or viewers read or view the same stories, sections or content. Most of us have our favorites, the pages, sections, supplements or programs we turn to first.
It’s long been assumed that men are more likely to deal with car problems and women with household operations. Thus you’ll see tire ads in the sports section and home care products advertised in feature sections or on TV dramas. Might a deeper analysis of the consumers that businesses want to reach matched appropriately to the growing variety of news and programming products offered by the media result in improved performance for both the businesses and the media?
RJI’s Esther Thorson and Elina Tang looked at 5-10 years worth of data from newspapers about their investments in the newsroom and advertising, to see how each dollar worked to create revenues.
The problems of newspaper ad sales
- For many years, ad sales reps were merely order takers, with never a shortage of businesses looking to buy advertising.
- Craigslist, the Internet and social media began to siphon off more and more local advertising, leading ad reps to feel pressure to “sell online.”
- These ad reps rarely focused on the advertiser they were selling to; rather, they were only aware of the quotas they had to meet to fill their allotted space.
Research objective—to identify advertiser segments in metropolitan circulation areas, compare results with the newspaper’s existing products and derive managerial implications for sales force
Once the segmentation scheme is agreed upon, program a mobile application that will link advertising segments with the products sold by the newspaper.
Methods and Findings
Thorson and her team went into a city and surveyed 300 advertisers. They learned about their business and total sales revenue, determining what percent of the ad sales market that particular group controlled.
The team found that financial, insurance and real estate industries (FIRE) easily spent the most in newspapers. After significant research, Thorson divided advertisers into seven segments, based on:
- Dominant ad medium used
- Benefits sought from advertising
- The customer’s own customers – who are they?
Once a news company has the profiles of these seven segments, Thorson believes that they can figure out which segment a retailer belongs to, and can then provide that retailer with a schedule of advertising in specific products that will satisfy their needs and strongly compete with any other media they could choose locally.
An important part of successful ad sales is being able to offer the retailer multiple media options. By being honest and including other media in your plan for the advertiser, you establish that you actually care about creating a plan that will work best for them.
- Creating partnerships with radio and television stations can make this mutually beneficial and profitable.
If you’d like to apply this segmentation analysis to your market, contact Prof. Thorson.