Poor circulation

The latest print edition of Editor and Publisher contains an unsigned editorial, "No Circ Free-For-All." It's subscription only, but here are the high points:

Apparently, there's a new circulation scandal in the newspaper industry. But this one isn't about tossing bundles in the dumpster, fudging returns numbers, or paying retailers for copies they can't sell. No, this just-discovered scandal concerns newspapers that — get this — deliver copies to targeted audiences coveted by advertisers...

This would be a good time for everybody to catch their breath. While it's always a good idea to be as clear as possible about who is paying for which copy, the industry and Wall Street also need to recognize that free distribution is an effective way to reach audiences, one that has worked for alternative papers for decades — and may well be the future of daily newspapers...

It is absurd to think that the copy of USA Today picked up by the traveling businesswoman coming out of her hotel room or the exec flying in first class is not "quality" circ. The audited paid-circulation business model served newspapers well for more than a century, but the industry must now face the fact that it is increasingly out of step in a world where information delivered by nearly every medium appears to be free to the end user. Whole segments of the audience, such as youths and Latinos, are telling the industry that they want to read a paper, but don't want to pay for it. These customers are the future of newspapers, and cannot be written off in favor of some elusive ideal of "quality"circ.

The most risible aspect of this is so-called crisis in circulation is that third-party sales represent just a low single-digit percentage of total paid circulation at the relatively few papers that even have sponsored-sales programs. But if that share increases as publishers and advertisers identify new audiences they want to reach, it should be welcomed as growth, and not feared as "illegitimate."

Although it's easy to point to all the times you've trundled down the hallway in a hotel looking at copies of USA Today or the local paper that will never be touched by non-janitorial hands, what's truly risible is that the trade journal of the newspaper industry is using its bully pulpit to debunk "this faux scandal."

We may be right or wrong in what we think we can achieve at Pegasus News.  But we're sure of this much:

Until this industry realizes that in the 21st century, circulation is a "goofy metric," nothing else it does will save it from its downward economic slide.

As one of the central pillars of the newspaper business, that's a tough preconception to change. It's a preconception that newspapers will have to change not only internally, but also with the advertising community. In the midst of all the important talk about transparency, citizen journalism and the like, the anachronism of circulation-driven ad sales is the buried lede in the story of why our little world is undergoing a revolutionary change.

Circulation-driven advertising in a pay-for-performance world means that a trickle-down of decisions are being made based on the wrong metric. It means that you're trying to get as many readers in the door as possible instead of trying to engage your best readers in a way that spurs them to action (response to story, contribution to ongoing story, or advertising-based purchase). It means that you're spending time obsessing over third-party subscriptions instead of whether the story you pushed reader #167985 was relevant;  whether or not the ad attached was relevant; and whether or not she acted upon it.

A favorite saw in the circulation-based world was, "I know that half of my advertising dollar is wasted -- I just don't know which half." Pushing up ABC audits with third-party papers in hotels isn't going to do anything to solve that problem.

We're not saying that there is an easy fix. If we were handed the reigns of an incumbent city newspaper, I'm not sure that we would know exactly how to tackle it. (Hell, I'm sure we wouldn't.)

Perhaps that's why we're launching something entirely different.