Why Zoning Isn't Micro
by Carol Memmott
In the early '90s, newspapers were ready to tackle microzoning head on. The word was out that no advertiser's request would be too daunting, no delivery zone too small. But some newspapers are changing their tune. The battle cry then was, "How low can you go?" Today's more cautious motto is, "Take it slow as we go."
"I think the expectations are less aggressive than they were," says Alan Flaherty, of Complan Inc., a newspaper-consulting business. "In 1993, to hear people talking about it, address-specific was just around the corner. Well, that corner has been rounded only to a very limited extent."
And, says Flaherty, microzoning to the mid-and low-hundreds of subscribers hasn't become a reality. "I don't see anybody driving zoning sizes much below the four-digit numbers and in many cases the mid-fours rather than the low-fours."
While some newspaper markets--Dallas, Chicago and New York--are taking the pitbull approach to low zoning, industry experts and those on the front lines cite a handful of reasons why microzoning is slowing down in some markets.
Advertisers Aren't Demanding It
At the Daily Oklahoman, microzoning may be at a temporary leveling-off point. The Oklahoma City paper offers advertisers 271 microzones, says Circulation Director Gerald Beattie.
"At this point in time, we're at the level we need to be," says Beattie, "It's cost us some dollars, but it's protected millions of dollars of insert advertising. We're very pleased with what we've done."
And like other papers, address-specific is a goal waiting in the wings.
"We're not too far away from being able to do that," predicts Beattie. "We want to get close enough so that if there is a marketing demand for it, we can do it, but right now we don't feel there's going to be enough of a demand in the next five years or so."
Technology Needs Tuning
"The manufacturers' claim that the technology is there to do this is questionable," says Don Curley, vice president and general manager for National Inserting Systems of Allentown, Pa., which does Sunday-comic inserting for the industry.
Curley, who spent more than a decade at GMA Inc., says, "In essence, the rolling out of that control software in packaging, manufacturing or the newspaper mailroom was very difficult. There are very few cases, if any, where they've got to the household level." But, says Curley, the technology is right around the corner. "Within the next year, you'll see the technology at the point where it's able to handle it." The next question, he says, is how soon newspapers will be ready to buy it.
Phil Jones, GMA's director of software systems, says one paper--The Dallas Morning News--has had a system in place since 1993 that processes 750,000 address-specific products through the post office on a weekly basis.
"We were promoting this aggressively for a little while and then decided the industry really wasn't interested," says Jones. "But in the last six months or so, major metros have spent hundreds of thousands on feasibility studies."
Jones says the technology is there, but newspapers are more concerned with how to sell it and whether they can make money at it. "If newspapers are going to survive," says Jones, "they've got to start looking at the specificity of microzoning."
Newspapers Aren't Aggressively Selling It
"Knowing how to sell it is clearly an issue for some papers," says Curley. "I don't think folks have a good handle on what the impact of doing this is. The key thing is getting the technology squared away, and once you've done that, then you're able to devise the proper rate tables. I don't think the impact of the rate tables has clearly been identified."
Bill Burks, advertising-research and business-development manager for the The Roanoke (Va.) Times, says his paper has the potential to go to the household level and to zone inserts to the route level if needed. "We got the delivery system in place before the advertisers really wanted it and before the advertising department really knew how to sell it."
Salespeople at the The Record of Hackensack, N.J., will more aggressively sell microzoning--the average zone size now is 5,000 copies--when "more user-friendly" mailroom equipment is up-and-running in the next 12-to-16 months, says Don Sherlock, vice president of product services. "They may be a little reluctant to push it now knowing that we can't guarantee everything to go address-specific." And at this point, he says, "there's not much of a call for route-specific from the advertisers."
Bigger Demand on Carriers
The Morning Call in Allentown, Pa., offers its advertisers 70 ZIP zones and hopes to push the envelope a little further, says Manufacturing Director Rick Molchany. "We want to go past 70 to get down to route-specific or even address-specific," he says, "but the inserting equipment we see today is not good enough for very fine targeting, so we'll have to supplement it with an alternate-delivery system. We're going to have to put the carriers at some responsible point to ensure the right customer gets the right package."
But The Morning Call depends heavily on youth carriers, and the average ZIP zone is about 2,500. "Placing that much responsibility on an 11- or 12-year-old is difficult," says Molchany, "so we're trying to blend that zoning as best we can but try to be reasonable in our expectations as to what the carrier can do for us."
Additional Packaging Costs And Tradeoffs
"The other facet that nobody's taken a good look at, although we're all learning, is the impact on cost for the packaging side of the business," says Curley.
National Inserting Systems packages 1.4 million comic inserts weekly. "Our productivity drops tremendously with the more complex zoning," says Curley. Net copies per hour produced drops when there are more preprints to deal with. "The consequent head changes are more frequent, so there's more down time."
Molchany sees other tradeoffs. "The more and more target marketing, the less and less you can rely on your repair system for your inserter. You're going to have so much down time between zones that you're going to try to minimize that by accepting some misses or doubles, and right now we won't do that."
Carol Memmott is a free-lance writer living in Chantilly, Va. E-mail, Cmemmott@aol.com; phone, (703) 802-6558.