Custom Circulation SegmentsMarch, 2005

Agenda Background Segments Next Steps

Agenda Background Segments Next Steps

Recent Business Changes Do Not Call List – rely less on telemarketing Different sales strategy – shift from 7-day

subscriptions to 4-day and Sunday only subscriptions

Recognition that we can’t treat the entire market the same

Goals & Objectives of Custom Segmentation Profile households most and least likely to

subscribe Identify best customers—”look-a-likes” Pinpoint where these households are

geographically located Define a manageable number of segments Leverage existing data sources

– Subscriber data– Readership survey– PRIZM lifestyle segments

Develop a common direct response plan for circulation and marketing

Claritas/Integras Partnership Partnered with an outside company for

statistical modeling to develop the segments

Integras has completed segmentation projects for:

– Valassis– Gannett– Wichita Eagle– Alamo Rent - A - Car– ACE Hardware

Data Sources PBS – Internal circulation file Readership survey San Diego County do-not-call list

Subscription Behaviors Frequency Channel Payment Terms Premium Payment Stop Reasons Payment Method Length of Subscription

Readership Survey Telephone survey Randomly selected San Diego County adults Conducted 2 times a year N = 4,000 Collected descriptive data

Do-Not-Call List Pulled the San Diego County Do-Not-Call List Merged/purged with U-T Do-Not-Call List N = 50,000 Reverse append based on telephone number Descriptive data

Agenda Background Segments Next Steps

Segment #Active

Subscribers

Six SegmentsType of

Customer Index

One Best 7% 14% 200

Two Good 21% 28% 133

Three Better than average 22% 27% 123

Four Average 16% 14% 88

Five Not very good 25% 13% 52

Six Unlikely 9% 4% 44

San DiegoCounty

G1

G2

G3G4

G5

G6

Segment Sizes

Group Count %Comp Count %Comp Count %Comp Count %CompSegment 1 77,458 7.42 61,359 9.51 44,172 14.06 33,286 4.56Segment 2 215,461 20.64 142,383 22.06 87,307 27.8 128,154 17.56Segment 3 230,408 22.08 157,046 24.33 83,947 26.73 146,461 20.07Segment 4 162,905 15.61 92,012 14.25 45,288 14.42 117,617 16.12Segment 5 259,297 24.84 146,660 22.72 40,125 12.78 219,172 30.04Segment 6 98,217 9.41 46,014 7.13 13,230 4.21 84,987 11.65Total 1,043,746 100 645,474 100 314,069 100 729,677 100

SD PotentialSD ActivesSan Diego County SD Co on File

San Diego County

G1

G2

G3

G4

G5G6

Active Subscribers

Our best customers 7-day subscribers Pay full rate using

cash or credit They do not use EZ

Pay Long-time subscribers

—5+ years Do not churn

Frequent daily and Sunday readers

– Rank 1st for reading every day and every Sunday

Frequent SignOn visitors

– Rank 2nd for visiting 5 to 7 times in a week

They respond to direct mail and are most likely to be registered on the Do-Not-Call List

Segment OneCirculation and Readership Characteristics

Older—50+ year olds Affluent — $100,000+ Educated — B.A.+ Caucasion

Comfortable lifestyle with means:

– Travel– Golf– Theatre– Classical music– PBS

Segment OneDemographics & Lifestyle

Very good customers 7-day subscriptions Most pay full rate, but

some are on discount rates

Long-time subscribers – 2+ years

Tend not to churn, but when they do it’s happens at the moment a renewal notice is sent

Frequent daily and Sunday readers

– Rank 2nd for reading every day and every Sunday

Average SignOn users

– Rank 3rd for visiting 5- to 7- times a week

They respond to direct mail and are likely to be registered on the Do-Not-Call List

Segment TwoCirculation and Readership Characteristics

Mid-Older—35 to 84 year olds

Moderately wealthy — $50,000+

Educated — Some college +

Caucasian or Asian

Active lifestyle with means:

– Country Club– Health Club– Belong to an Arts

Assoc.– Classical/jazz music– PBS

Segment TwoDemographics & Lifestyle

Little better than average customer

Most likely to be a 2-day weekend subscriber

Likely to start a subscription with a reduced rate

Cite no time and moving as reasons to stop a subscription

Likely to have been a subscriber for 7 months- to 5- years

Average Sunday and daily readers

– Read Sunday 3- to 4- times in a month

– Read daily 1- to 3- times a week

SignOn’s best visitors– Rank 1st for visiting 1- to

7- times a week– Index above average for

visiting news, entertainment, real estate, careers and autos

They are on the Do Not Call List and do not respond to telemarketing

Segment ThreeCirculation and Readership Characteristics

35 to 49 year olds with children

Mid- to upper-income households — $50,000 to $149,999

Most likely to have some college or an associate degree

Caucasian

Segment ThreeDemographics & Lifestyle

Athletic lifestyle:– Soccer– Skiing– Golfing– Softball– Health club– PTA– Buy toys

Average customers Slightly more inclined

toward Sunday only or 4 day subscriptions

Slightly more likely to start because of a special promotion

Will stop a subscription after promotional period or when a renewal notice is received

Some churn

Average Sunday and daily readership

– Sunday and daily readership indexes at or near 100

Below average use of SignOn San Diego

– Rank 1st for not using SignOn in the past week

Respond to store front crews, but not door-to-door sales efforts

Segment FourCirculation and Readership Characteristics

Older—60+ year olds Low- to mid-income —

< $15,000 to $49,999 High school graduates Racially balanced

compared to San Diego County

Lifestyle reflects an older, rural crowd:

– Belong to a Veterans Club

– Go hunting– Rodeo Fans – Buy from shopping

channels

Segment FourDemographics & Lifestyle

Not very good customers

Twice as likely to take the Sunday-only edition and least likely to have a 7-day

More likely to buy single copy

Churn out after reduced rate expires

Stay on the books less than 6 months

Occasional daily and Sunday readers

– Rank 1st for reading 1 Sunday once a month and 1st for not reading the daily paper

Occasional SignOn visitors

– Rank 2nd for visiting 1 to 4 times a week

– Visit Careers and Real Estate

Telemarketing, door crews and store fronts work for starts

Segment FiveCirculation and Readership Characteristics

Young — less than 35 years old

Lower income — less than $49,999

Poorly educated — less than high school graduate

Higher concentrations of African American and Hispanic households

Urban lifestyle:– Rap/Alternative music– Play football,

basketball and volleyball

– Have a liberal outlook

Segment FiveDemographics & Lifestyle

Unlikely Union-Tribune subscribers

Least likely to subscribe

Most likely to churn after rate expires

Most likely to be stopped for nonpayment

On the file less than 6 months

Typically non-readers– Rank 1st for not

reading the Sunday and daily U-T

– Most likely to read or borrow a newspaper

Infrequent SignOn visitors

– Rank 6th for visiting SignOn

Rank first for telemarketing starts

Segment SixCirculation and Readership Characteristics

Young — less than 35 years old

Lower income — less than $49,999

Poorly educated — high school graduate or less

Higher concentrations of African American and Hispanic households

Segment SixDemographics & Lifestyle

A lifestyle characterized by:

– Fishing– Own dogs– Own satellite dish

Agenda Background Segments Next Steps

Next Steps in progress Direct mail to HH’s using segmentation Call centers can now identify customers by

segment Developing pricing based on segments