Jim Hart, partner at DMforNewspapers, provided Convention attendees with an informative and engaging talk about the USPS/Valassis Negotiated Service Agreement, including ways in which newspapers can respond to and compete against the NSA.
Hart urged publishers to be proactive and start preparing for the impact of this NSA now. Under the agreement, there is a huge disparity in the content-to-price ratio for Valassis and news organizations. Essentially, newspapers pay $172/M for 3.3 ounces of mail, while Valassis pays the same amount of money for a whopping 8.9 ounces. That's almost three times more content for the same price.
One of the biggest threats resulting from the Valassis agreement is the disruption of national placement strategy. Another is the rate brokering of coupon books and neighborhood targeting. He offered strategies for responding to these issues.
In responding to the NSA agreement, Jim suggests newspapers take the following measures:
• Strive for 55% household penetration in your market. Perform a demographic profile of your region.
• Lessen your reliance on major accounts and diversify your revenue streams. Newspapers still have an edge with local advertisers. This is an area that should be maintained and grown.
• Take a close look at your newspaper's rates.
Among other things, Jim urged publishers to ask themselves "what do advertisers need that only we can give them?" The key to success lies in bolstering existing relationships with our advertisers and tapping into our strengths as news media companies.
For a closer look at the Valassis PSA and to see informative videos on the agreement, log on to www.DMfornewspapers.com.