roundtable 2004 levitt

Roundtable on Strategic

Marketing

Leon Levitt

EVP/Digital media

azcentral.com

No technical questions!

(recovering circulation guy)

Azcentral.com

Site and strategic overview (perspective)

Philosophy and changing media landscape

Selling with database and extending reach

Azcentral.com Launched 1995

3.7M unique visitors

50 M page-views

Top news/info site in marketplace

More than double local competitors and beat national players

80% broadband connection

50% local traffic

50% Classified upsell / 30% classified products

Dedicated sales force but real win is in also leveraging traditional force (not either/or)

Azcentral Philosophy

Online is a very different medium with different

content and revenue “rules”

We are a converged Web site (newspaper and TV)

Total integration of content (text and multimedia),

conversation, commerce and convenience

We believe utility is as important as content

We program by daypart (not NP model)


More than just a newspaper site (brand

extension not replication)

We add a dose of serendipity, and don’t

think irreverence and attitude damage

credibility

Make better decisions using “overnights”

Not a believer in Newsstand, Olive…


All about local audience

Overriding business goal is to extend reach,

especially in demos the newspaper does poorly

Classified works and is a great revenue engine

Must provide impact for advertiser

Transition of retail revenue our greatest challenge

Must add sizzle and make work for advertiser

Aggregated market share strategy

Azcentral.com: Aggregation of

Audience

19% past 7-day market share

Extend newspaper reach 4.7 points past 7-days

Think by demographic and backfill gaps

24.3% past 7-day market share 25 - 34

Extend 25-34 reach > 8 points past 7-days

It requires 15 spots on radio’s top

morning shows to even come close to

azcentral.com’s weekly reach

Source: Scarborough Feb03-Jul03, Top 5 radio stations based upon reach among target

Total reach Adults 18+

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

M-F 6a-10aAzcentral

Past week

KTAR 3 spots

KFYI 3 spots

KZON 3 spots

KESZ 3 spots

KNIX 3 spots

361,400

15 total spots

339,100

Merging Mediums

The Arizona Republic

(largest in state)

KPNX News 12

(most watched)

azcentral.com

Online is common

denominator

and not bound

traditional rules

Changing Media Landscape

Business models are changing…

Expectation that news/information is free

Way people get news and information-

graze many different sources

Broadband is changing the game and has a

big impact on newspapers


Impact of broadband in Phoenix

43% broadband penetration, 52% in Scottsdale

Scottsdale Republic page-views up 50% YOY

Highest market demos, yet daily readership is

down 8% over 2003

Annual broadband growth 39%


Business models are changing…

Wireless broadband will become ubiquities and

changes the way we must tune our sites

National online competitors entering local markets


What impact does this have on our online

operations?

Three key priorities… Great sense of urgency

Market share (aggregation of eyeballs)

Revenue transition from print to online

Business model alignment (print and online)

Changing Media Landscape Business Model Alignment

E & P 2005 headline: Internet broadband growth killing newspaper circulation…


Target our sites and tune for broadband

Reconcile what is cool with a sustainable business model

Content that drives revenue (not just newspaper model)

Airline or roller coaster (depends upon time of day)

Creating new asset

Azcentral.com and Data

Real money is in targeted on-site ads (ZAG/OAS cookie module)

– Enormous volume 50M page-views

– In July 200+ different retail advertisers

– Starting to have great success (sold out sections)

– Most important business model

Newsletters (60 and counting)

Opt-in emails (Maestro)


Key points:

It’s not just about the data but it’s about our ability to sell the data

There is a trade off… richness of data versus a simple sales template

Structure is key- dedicated sales (14/6) but must leverage traditional sales force

Online email manager

Manage supply and demand


Limited registration- ZAG

Enhance with universal registration

(Newsletters, message boards, contests…)

Build opt-in database

Supplement with content affinity buckets

(OAS)

Keep it simple (who will be selling?)

Drive incremental revenue


Number 1 goal is to drive aggregate reach- new medium and like TV has brand role

Number 2 goal is to target specific computers- direct marketing extension

Number 3 goal is to align with circulation- link with subscriber transactional platform

Never a wall in front of classifieds

Azcentral.com ZAG

Collect data useful for ad targeting

– ZIP

– Age

– Gender

Computer NOT individual

Honest info

Second page (useless refers)

Do NOT block classified

Azcentral.com OAS

24 Content affinity buckets

Based on user visits per bucket versus the

average each month

Content affinity targets (24 “buckets”)

Entertainment

– Arts

– Restaurants

– Movies

Travel

– In state

– Out of state

– Outdoors

Money

Autos

Real Estate

Rentals

Recruitment

Style

Health

Casino

Shop

Coupons

News

Personals

Families

Food & Home

Sports

– Golf

Azcentral.com Newsletters

60+, 110K subscribers

$25 - $40 CPM

Matrix and print bundle sale

Online-online bundle!

Cross promote

Azcentral.com Opt-in

Use Maestro (HTML or text)

60K email addresses

Aggressively growing

Republic Direct sells as ad on to direct mail

Slice by demo (currently)

Full list 1X per week limit

Average 20% – 30% open rate

Up to a 25% yield on those open for special offers

Very aggressive CPM / $20K per month

Azcentral Data Capture

Capture e-mail address through contests,

message boards, NL, circulation (universal

registration)

Incremental data capture (pop-ups)

– Subscriber status

– Planning to move/visit here?

Azcentral- What We Sell… ZIP clusters

Gender

Age

Content affinity (people who are frequent users of content X)

Combinations of ZIP, gender, age, affinity

Combination Web, newsletter, and e-mail ta

Online-online bundles

Advantages

Reach targeted audience better than direct mail

(higher open and yield)

Zero in on demographic groups better than TV

or radio -- no waste

Competitive CPMs for reaching an affluent

audience during their workday

Azcentral Targeted Pricing

Registration targeting

– General ROS banners Base CPM

– 1 filter (age, gender, zip, content affinity) 2 X

– 2 filters (age, gender, zip, content affinity) 3.5X

– 3 filters (age, gender, zip, content affinity) 5X

– 4 filters (age, gender, zip, content affinity) Custom

20% discount to advertisers who want to use both the Web site and our e-mail lists.

Simple for online and traditional staff to sell

Zip, Age, Gender and Content

Affinity Advertising

Timelines and Milestones

ZAG Registration launched September of 2003

By January 2004, surpassed 1.8M registrations: ½ from Arizona

In January, we booked $8,900 in ZAG revenues from 6 clients

By July 2004, surpassed 3.8M registrations: 54% from Arizona

In July, we booked $21,000 in ZAG revenues from 10 clients

What have we learned so far?

Box ads produce the highest yields

The right creative makes a difference

Direct mail dollars are easiest to attack

Leverage Republic Direct to sell opt-in email

Acceptance is rising

We need to leverage more major and national account relationships

Expectation setting is crucial with client

Tie into print ad zones

Creative Examples

Coolibar Clothing

• Zips throughout

AZ and Southern

California with high

levels of skin cancer,

females, Age 35-54

• Produced .57%

yield

Salt River Project

• Selected AZ zips

matching coverage area

• Produced .16% avg. yield

• Needed stronger call to

action

Copper Square

• Downtown and Uptown

Phoenix zips


C.G. – Community

College

• Chandler and Gilbert zips


• Needed age parameters?

Macayo’s Objectives

Increase brand awareness

Drive direct response – Online driving offline purchases

Wanted to experiment with new medium

Creative ties to print, outdoor and broadcast campaign

Retail Highlight $17,500 3-Month Revenue

azcentral Day Parted Home Page Ad

Ad runs on Home Page of

Azcentral One day per week,

four hours at a time.

Results

First week ad ran Friday 7/16 from

10a – 2p

1,102 clicks, Yield 1.19%

Second week ad ran Friday 7/23 from

10a – 2p

747 clicks, Yield .8%

Third week ad ran Thursday 7/29 from

10a – 2p

796 clicks, Yield .81%

http://q.azcentral.com/RealMedia/ads/click_lx.ads/www.azcentral.com/index.html/1855013253/Frame1/macayos_DOTD/MacayoCheaperDD.gif/30613637306332633430383833613730

Email sent to 30,000

local households from

azcentral opt-in database.

Results:

Open-Ups-7,189

Open-Up Rate: 24%

Click thrus: 195

Yield: 2.71%

Full HTML E-Mail to Opt-In Database

Azcentral.com

Circulation transactional system (early

2005)

Alignment of business model is huge

– Acquisition

– stop saver

– retention

Dillard’s Objectives

Drive in-store sales

Increase impact of current newspaper advertising

Extend Dillard’s advertising reach to Arizona’s online market

Increase awareness among younger audience- Adults 18-24

Retail Highlight $102,000 Annual Revenue

Dillard’s AZ Micro Site

Dillard’s current or custom local look

“Featured” item or promotion on Home

page

Dillard’s daily newspaper ads and

inserts online to view, print, or email

Arizona store locations/map and hours

Dillard’s Slide Show for selected

merchandise/promotions

Assigned sub domain to use in other

advertising to drive additional

people to Dillard’s Az site

(www.dillardsaz.azcentral.com)

Monthly updates to site

Dillard’s Newspaper Ads and Inserts Online

azcentral puts Dillard’s

newspaper ads and inserts

from The Arizona Republic

online

Azcentral.com Shopping section

Fixed 120X90 button

“ Dillard’s Current Ads Here”

Azcentral Site-On-Site Campaign

Azcentral runs online ads driving

users to Dillard’s newspaper ads

online

200,000 ad impressions

each month

Dillard’s Yes-Style Fashion Sponsorship

800,000 page views per month

Yes Slide Shows:

- Clubwear Guide

- Club Scene

- Fashion Shows

- Movie Premieres

Dillard’s large 120x240 ad on

each Slide Show page

- with links to view Dillard’s

current ads online

Opt-in Email Marketing Blasts/Sale Events

Direct response vehicle

Custom Dillard’s email message

Sent to azcentral’s Opt-In list

Increasing awareness of big sales

events, and promotions, Cosmetic

bonus events

Link to Dillard’s Az Micro site

featuring newspaper ads online

Our Opt-In Email Program

45,000 email database list

85% Female

(1) Dillard’s E-Mail Blast each

month

Azcentral 7 & 30- Day Reach

Adults 18+ (audience = 2,435,700)

– Yahoo.com local 21.1% 26.1%

– azcentral.com 19.0% 27.4%

– Azfamily.com 5.8% 10.1%

Adults 18 – 24 (audience = 346,400)

– Yahoo.com local 26.4.% 32.6%



Adults 25 – 34 (audience = 511,700)

– Yahoo.com local 24.5% 31.2%



Source: The Media Audit

roundtable 2004 levitt

Technology