Effective Use of Newsstand Sales Data
"What we found," Michalopoulos said, "was about 65 percent of the sales were coming from high volume, high efficiency retailers, mostly terminals and bookstores, with the remaining portion of the sale coming mainly from low-volume, low-efficiency retailers;which was true for many magazines."
Ken Frawley, VP information management, Time/Warner Retail Sales & Marketing, has used sales data to determine such things as cannibalization of existing titles when a new entrant comes into a category. It can also be used in connection with parent titles and their brand extensions.
"It’s not just draw and sale," Frawley said. "It’s the effect [of the brand extension title] on the parent brand and the overall P&L for the magazine. With this, we’re able to make some draw, display, and distribution decisions for brand extensions."
For his part, Richard Alleger, vice president, Rodale, has focused on designated market areas (DMAs) in his use of newsstand sales data. DMAs are used by media companies to define market areas for every county in the country, Alleger said, "and obviously every county has Zip Codes."
By taking the sales by Zip Code for a title and filling in the sales for each DMA, said Alleger, it allows them to look at the penetration within any DMA and "helps the publisher see how quickly you’re penetrating these key markets."
By adding psychographic data, MRI data, and sales information and response rates for various products sold into the marketplace, you can build psychographic clusters of readers by Zip Code. "We take the clustersﾅand we take the Zip Codes within the cluster, and very quickly we’re able to figure out which two or three clusters are going to be 80 percent of your readership." From there, you can have your distributors fill in the blanks.