Private & Confidential © 2011 Circular Distribution + Where do we go from here…? 1 Alliance Media...

Private & Confidential © 2011

Circular Distribution

+Where do we go from here…?

1

Alliance Mediaa division of NSA Media

+NTMC Conference+New Orleans, LA+March 7, 2012

Private & Confidential © 2011 2

Agenda

+The Ultimate Shopper Media

+Evolving Distribution Landscape

+Growing Concerns Drive Need for Change

+Opportunities for Efficiency

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The Ultimate Shopper Media

A Tool that Empowers



Circulars connect Stores and Shoppers

4

Operational

Day of delivery

Scale

Targeting/Versioning

Efficiency

Functional

Communicates Product/Price

Drives Traffic

Content

Retention/ Acquisition

Habitual

Shopper Routine

Research/ Planning Tool

Comparison Shopping

Coupons/Sales

Inspirational

Discovery

To-do list

Exposure

Call to action

Store Shopper



Usage remains widespread

5

Circular Usage Regularly/ Occasionally

Total 72%Men 67%

Women 76%

18 – 34 65%

35 – 49 74%

50 – 64 74%

65+ 76%

<$50,000 67%

$50 – 74,999 77%

$75 – 99,999 75%

$100,000+ 72%

72% of U.S. adults regularly or occasionally read circulars.

High propensity users:• Female• 35+•HHI $50 – 100K

Shoppers seeking value



Evolving Distribution Landscape

Shoppers Driving Change



Newspaper circulation trending down…

7

Daily and Sunday trending downward



Alternative Distribution Options Expanding

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Established to address consumer demand for print circular delivery

Sunday Opt In – Free packets of advertising delivered to newspaper non-subscribers that request it.

Slightly younger, more value conscious reader compared to newspaper subscribers

De-duplicated with paid subscribers

Over 4 Million Opt-In subscribers since 2008

Walk Programs – Free packets of advertising delivered in areas where a viable newspaper option does not exist

Delivered at block group levels with strong demographic composition



Sunday Select is Effective and Efficient

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+Mainstream acceptance with most advertisers

+Consistent YOY growth

+High level of consumer acceptance

+Capacity to expand long term…

+IF properly executed

+Opt-In is becoming the new paid



Partially offsetting Newspaper circulation declines…

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Opt-in programs offsetting Sunday somewhat (4 million+ HHLDs)



Growing Concerns Drive Need for Change

Reaching People Effectively in a Fragmented Environment



Newspaper

Opt-in

Digital

Mail/Carrier

Circular Distribution is at a Crossroads


Private & Confidential © 2011Private & Confidential © 2011

Some Good News… Newspaper Delivery is preferred by most

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AgeAverage Per

Person Annual

ExpenditureNewspaper USPS Digital No Preference

18 – 24 $28,119 17% 30% 42% 11%

25 – 34 $46,494 44% 20% 28% 8%

35 – 49 $57,301 50% 24% 15% 11%

50 – 64 $52,463 59% 22% 7% 12%

65+ $37,562 62% 19% 4% 15%

However… <25 demo prefers Digital and USPS delivery


Private & Confidential © 2011Private & Confidential © 2011

Growing Concerns… Solutions?

Growing list of concerns requires viable solutions

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Expense

Circulation

ViabilityBudgets

Fragmentation

Shiny Toy Syndrome

Growing Concern

s



Walk Programs Gaining Acceptance

15

Four Factors are Driving Advertiser’s ViewpointROI PressurePostal ConcernsImproved TechnologyReliability



ROI Pressure

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+Rising costs (i.e. paper, energy, and postage) adversely impacting shared mail ROI.

+Negative perception of “Junk Mail”

“15 years ago mail made its way into the home, now it only makes it to the recycling bin.”



+Balance of distribution increasingly skewed towards higher cost TMC

The trend has exponentially negative impact on ROI.

ROI Pressure

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Source: NSA database: Newspapers with high usage and opt-in products offered to ensure consistency.



Postal Concerns

Weight based pricing is killing retailers who distribute 12+ page preprintsService cutbacks

Fewer distribution facilities

Fewer shifts Fewer workers Fewer delivery days More difficult to make

delivery timing guarantees

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Enhanced Technology Improved PrecisionGeo-tracking

Real-time tracking Where and when pieces are

distributed

Digital alternatives Mobile, iPad, websites, e-

blasts, consolidators Alternatives for those who

Opt-out of a delivered piece

19



Opportunities to Drive Efficiency

For Advertisers and Newspapers



“Convenience” is situational rather than absolute, and empowers contemporary shopping habits…

We know…

Print circulars remain wildly effective among shoppers

What we’re finding…

Digital has become more of an Additive step, as “Discovery” leads to “Action”

Convenience is being redefined by the Shopper…

Adapting to new realities… Empowered Shoppers



Adapting to new realities… “Costs Must Be Reined In”

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+Clients demanding:

+ Greater accountability

+ Improved efficiency

+ Pinpoint accuracy

+ Reach across demographic targets

+ Multiple touch-points



Reining in costs in print

Doesn’t have to be all or none

Use carrier where practical

Use shared mail for rural or walk adverse geographies

Transition program over-time starting with the easiest ZIP Codes to convert to carrier

Learn what works

Lower your risk23

Opt-in preferred, Opt-out may work if…

If opt-out is truly an option

If opt-out option is HIGHLY visible

If waste is aggressively weeded out

TMC Product SMC/Select Product



Reining In Your Costs

Digital alternatives that are active opt-ins are an asset

These become as valuable as your subscribers

Only you will have a non-duplicated list of consumers, by ZIP Code, who want a digital copy

What is a reasonable CPM for opt-in digital homes?

How should ads be served? e-Mail? Consolidator? Direct Link?

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Suggest a digital alternative to opt-out

Passive, “They are on our website each week.”

Active, “We can e-mail them each week.”

Digital Products



ReCapSunday Opt-In is essential to bring the mass audience an advertiser is looking for and eliminate the threat of continued audience erosion

Mid-week saturation delivered products are becoming harder to justify financially, even more so for those which are mailed

Move what you can to carrier delivery, Hybrid model

Aggressively seek opt-outs

25



Thank You!

+Dave Gusse+President, Alliance [email protected]+630-729-2194


mailto:[email protected]

Private & Confidential © 2011 Circular Distribution + Where do we go from here…? 1 Alliance Media...

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