As I mentioned in the previous post (Part Four), flyer distribution has taken on a large part of the retail advertising market and there’s no going back. Today, major retailers all over North America use flyers as their primary means of marketing. Flyer distribution has become a key part of the newspaper revenue mix, and without them, most community newspapers would not be profitable.
What’s a flyer? A flyer is sometimes referred to as a circular or insert. They’re those wonderful standalone ads that bulk-up most newspapers in North America. Things are a little different in each part of the continent, but here in Toronto our weekly newspaper is about 10% news and 90% ads – with the vast majority of that being flyers.
What follows is a brief look at flyers, what they mean to consumers and more importantly what they mean to the newspaper industry:
1 - Timeliness
The flyer distribution business is less about timeliness in the sense of speed and much more about reach and repeatability. Getting flyers delivered every week to as many homes as possible is the key. It’s much harder than it looks and generally newspapers do it best.
Because newspapers have a regular delivery schedule they’re good at flyer distribution. Some of the best flyer delivery newspapers are the free community weeklies. This is because they tend to be total market coverage products - meaning that they are delivered to most homes in a geographic area - this offers their customers the broadest reach.
Since many community weeklies are delivered once a week, they have built strong consumer expectations and reading habits. That’s to say, many consumers now expect to see retail flyers delivered on a specific day of the week. This turns out to be both a blessing and a curse for the industry. Though a number of papers have tried to add additional days (for a number of reasons - the biggest being to grow volume), both the readers and the advertisers’ have resisted these changes. This makes the model limited by consumer/client habits, not to mention the physical limitations of the number of flyers a paper can hold.
As business requirements change and retailers need more flexibility the newspapers and their rigid flyer delivery model will become an increasing liability.
Do you think newspapers will be able to adjust their models in time?
2 - Efficiency
In the world of flyers, efficiency is measured by the percentage of the population you reach – and by that measurement newspaper flyers have been very efficient. Though they’re good at delivering flyers, they do have limitations. As most paid papers circulation declines, they’re reaching a smaller segment of the market, greatly diminishing their efficiency.
Even the free papers are running into reach issues because newspapers can’t easily deliver to apartment/condo buildings. As major metropolitan markets continue to increase residential densities the percentage of households that don’t receive free newspapers will grow.
As the newspaper industry has changed, so too has the demand on the distribution channel. In the past, if a community paper wasn’t delivered the only thing that a newspaper had to worry about was the call from an annoyed resident. Now that advertisers are paying for each thousand delivered, newspapers are being audited and penalized for papers/flyers that are not delivered.
Will advertisers be willing to absorb increased costs?
3 - Costs
The majority of flyers go unread. From an advertiser’s perspective that hasn’t been all bad since so many are still read. But that’s changing. As newsprint costs continue to go up and delivery costs increase due to labour and fuel prices, advertisers are putting pressure on newspapers.
Newspapers are facing the daunting task of delivering more flyers to a decreasing readership for less. Sooner or later there will be a tipping point, the point at which paper, printing and distribution costs will outstrip the returns. That time is coming sooner than most retailers and newspapers realize.
When do you think we will reach the tipping point?
Beyond the financial costs, though still most important today, society’s move to reduce waste and the impact on the environment will play an increasing role in the death of print flyers and the subsequent death of newspapers. The amount of waste the industry produces is astronomical. As with the move to reduce bulk mail (Canada, US), when consumers demand no delivery of vast amounts of paper, the flyer industry will be in crisis and a large number of papers will fail.
In my next post, the last in the series, we will look at the newspaper industry through the eyes of the reader. Stay tuned for the last post:
Part Six – The Reader