Examining the Examiner
In April, Baltimore will awaken to a new daily paper on its doorstep. Baltimore County, that is. And good chunks of Howard, Harford, Anne Arundel, and Carroll counties.
Despite its name, the new Baltimore Examiner newspaper will not deliver to most homes in Baltimore City, apart from those in a few affluent northern neighborhoods, and a dot of Northeast Baltimore, according to a distribution map prepared by the Examiner.
The map and other Examiner marketing materials obtained by Media Circus offer new insight into the soon-to-launch free tabloid’s circulation and business strategy, as well as its potential impact on the regional newspaper market.
After being questioned about the circulation map, which was labeled “Effective 01/01/06,”Examiner publisher Michael Phelps said it was not the most recent one and provided Media Circus with an updated version. The new map (pictured at left) adds parts of Federal Hill and Canton to the Examiner’s home-delivery areas. Phelps says the Examiner will be delivered to 3,836 homes in Canton and 6,523 in Federal Hill.
The Examiner is planning a daily (except for Sunday) circulation of about 250,000, all but 14,000 of which will be home delivered for free, according to a “controlled circulation” strategy that targets neighborhoods meeting the newspaper’s “preferred household” criteria. The target household profile is a married couple aged 25-54, with children, who live in a neighborhood of “high property values” and have a median household income of $73,000.
The Examiner will distribute the remaining 14,000 copies through street boxes and hawkers, presumably many of them in the city proper, though the city office that regulates permits for those boxes was unable to provide an immediate count of how many the Examiner has applied for. Phelps also said he didn’t have a specific number immediately available.
The distribution map is too small to allow for accurate identification of specific neighborhoods, but it appears that the wealthy North Baltimore neighborhoods of Guilford, Roland Park, Homeland, and Mount Washington are among those slated for Examiner home delivery. Perhaps surprising is the apparent selection for home delivery of a small region in Northeast Baltimore that appears to coincide with Greater Lauraville. That cluster of mostly single-family homes, while solidly middle-class, is not distinguished by particular affluence. It is home, however, to Mayor Martin O’Malley, who lives in the Beverly Hills neighborhood. Phelps says the mayor’s address wasn’t part of the distribution calculation.
The Examiner’s planned distribution shows the paper is directly challenging The Sun for readers and advertisers. By far, the Examiner’s single biggest home-delivery effort will be focused on a large swath of Baltimore County north of the city, which is also the Sun’s strongest paid-circulation region. The next largest Examiner distribution zone is in Howard County, which Sun editor Tim Franklin has described as a crucial “battleground” area because of increasing competition there from The Washington Post.
Here’s how the Examiner’s overall planned distribution breaks down, according to marketing literature being presented to prospective advertisers:
Baltimore and Baltimore County: 128,535
Anne Arundel: 28,061
An additional 78,137 copies of the Maryland edition of the Washington Examiner are already being home delivered in Montgomery and Prince George’s counties, bringing the Examiner chain’s planned circulation in the state to more than 325,000. The combined total circulation of the D.C. and Baltimore papers will be over 510,000, according to the Examiner’s sales materials. Both papers, which will share some editorial content, are owned by Denver billionaire Philip F. Anschutz’s Clarity Media Group Inc., which also publishes the free San Francisco Examiner.
Perhaps the Examiner’s most pressing challenge is the creation of a reliable home-delivery network for nearly a quarter of a million households over a large geographic region.
“For a home-delivery model, building a foundation and a complex distribution network from the ground up is a very ambitious undertaking,” says John Murray, vice president of circulation and marketing at the Newspaper Association of America, the newspaper industry’s trade association. “Most of your large daily newspapers have built their current home-delivery distribution model over decades and decades.”
Indeed, the Baltimore edition will be the first Examiner paper to launch without an existing distribution network already in place. In both Washington and San Francisco, the free Examiners were essentially reincarnations of existing newspapers.
Unlike traditional free weekly community papers and “shoppers,” which indiscriminately blanket entire communities, the Examiner will allow recipients to opt out of daily home delivery. The opt-out feature means the Examiner’s distribution will be logistically similar to that of a paid-delivery newspaper, and therefore more expensive. “Once you become . . . address-specific,” Murray says, “your distribution costs increase. You have to have centralized record keeping, because you do have carrier turnover, and so the business model of the publication needs to know who will receive [the paper] and who won’t.”
Phelps says the opt-out rate at both the Washington and San Francisco Examiners has been about 3 percent.
The Examiner’s complex free-delivery model underscores its need to quickly attract the advertisers who will be the paper’s sole source of revenue. As Murray points out, “You’re not getting the home-delivery circulation income, but you’re having to do almost as much work.”
To that end, the Examiner’s advertising and marketing staffs have been aggressively courting area advertising agencies in recent weeks, in hopes they will recommend their clients take a chance on an unproven, unaudited product amid an economic climate of generally decreasing newspaper circulation and ad revenue.
To get a sense of how the Examiner’s pitch is being received, Media Circus spoke with the four largest advertising agencies in the Baltimore area, as ranked by the Baltimore Business Journal: Eisner Communications; Trahan, Burden, and Charles; GKV Communications; and MGH.
The general impression of ad executives ranged from cautiously enthusiastic to committed fence sitting, with one agency saying it has already recommended clients consider advertising in the Examiner.
“We’ve looked at it for lots of clients, and we’ve recommended our clients test it,” says Michele Selby, media director at Trahan, Burden, and Charles (TBC). Selby says TBC is recommending its financial services, health care, and entertainment clients “take a look” at the new paper, though she cautions, “It’s really hard to say whether [the Examiner] is going to be successful.”
Roger Gray, chief executive officer of GKV Communications, says the “jury is still out” on whether his agency would recommend the Examiner to clients, but that GKV’s experience with the Washington Examiner on behalf of former client Independence Air was successful. The discount airline went out of business in January.
Other agencies also say the Examiner chain’s ability to attract major advertisers like Macy’s and Home Depot makes the Baltimore version an easier sell, though they note that the D.C. and Baltimore papers are not an apples-to-apples comparison. The Washington Examiner allocates far more distribution to street boxes and hawkers at Metro stations, whose riders represent a desirable captive audience.
All four agencies say they welcome competition in the daily newspaper market, particularly if it loosens the Sun’s grip on daily print advertising dollars. “We think it’s good that there’s another paper,” says MGH President Andy Malis. “Because The Sun has just been going downhill for years, and they’re very difficult to work with for advertisers. They’re just not very creative, they don’t come up with exciting and interesting packages and rates.” Frustration with the Sun’s inflexible ad rates is so prevalent among local advertisers, Malis says, “that some are going to give [the Examiner] money out of spite.”
“Competition makes everybody better at what they do,” TBC’s Selby says. “It could make The Sun more aggressive and almost more willing to negotiate and take care of their clients.”
But even cheap advertising and targeted distribution are not enough to attract newspaper advertisers, says Cindy Epley, an associate media director at Eisner Communications. One of the Examiner’s biggest challenges, she says, “will be to show actual readership, versus just delivery.” With free papers (such as City Paper), readership is typically measured by an independent auditing firm that conducts reader surveys. Phelps says he plans on asking for an audit three months after launch.
Paid readership is the Sun’s trump card. “We have more than a million readers, and they have no demonstrated readers in this market,” says the Sun’s marketing and communications director Linda Geeson. “If you look at [the Examiner’s]results in Washington and project them to Baltimore, they would have only a sixth of our readers. In order to be the same advertising value, their rates would have to be a sixth of ours.”
According to an Examiner advertisement on display in its Inner Harbor offices, advertising in the Examiner will cost “up to 60% less than it costs to advertise in the other Baltimore daily.”
Whatever the success of the new daily in town, it’s not likely to increase the total amount of dollars spent on Baltimore-area print advertising, agency representatives say. “The pot’s not going to get bigger,” Malis says. “Various people are going to lose share.”
That could bode ill for the Tribune Co.-owned Sun, which labors under constant Wall Street pressure to make more profit. But if Calvert Street is concerned about competition from the Examiner, it hasn’t given these advertising agencies any indication. “I haven’t had anybody from The Sun contact me and say, ‘Here’s how we’re competing against [the Examiner],’” Selby says. “That may be because they don’t consider it a threat.”
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