Interview with Peter Vandevanter, Charlotte Observer

“Direct marketing on steroids,” is how Peter Vandevanter, vice president of new ventures for The Charlotte Observer in Charlotte, N.C., U.S.A., describes his company’s new personalised newspaper project. The official name is, “My Observer.”

Essentially, The Charlotte Observer is testing the waters for personalised printing, as it has 24 of its subscribers receiving a one page (two-sided) personalised edition wrapped around their home-delivered daily paper. It features topics of interest that they have preselected, as well as targeted ads.

It is considered a “premium service,” he says, but will be free for subscribers. Vandevanter says this is about added value, and that the advertising should be such an easy sale that he knows it will be profitable.

Here is how it works: The source for the personalised paper is a designated website where subscribers first visit to answer 13 questions so the newspaper can gauge interests, whether it is in business, sports, politics, etc. For each answer, an RSS feed is assigned, already created from The Observer (different blogs, websites, etc.), or users can create their own RSS feeds. At that point, the software sends the feeds to a pagination program and it is formatted onto a page (some minor manual intervention).

Once the PDF is generated, it is then printed on a Xerox 6060 digital printer as a three-quarters-sized two-sided broadsheet page and on glossy paper, then delivered with the daily. The glossy page, which at its size allows the Observer’s normal flag to be seen after it is wrapped with the daily, will feature ads on the front and back, again, resulting in what Vandevanter calls “direct marketing on steroids.” Subscribers also can view their page online as well by typing in their name and e-mail address at the designated website.

We spoke with Vandevanter in early November about the project.

nt: What was the impetus for this project?

Vandavanter: I have been in the business for 30 years, and in at least the last 10 or 15 years the idea of a personalised newspaper has been ‘in the air.’ I mean MIT (Massuchusetts Institute of Technology) studied it pretty extensively in 1995 and I happened to be in Boston at that time and followed that closely.

So I don’t think it’s a new idea: the idea of a newspaper that is truly tailored to your interests with advertising that is also truly tailored to your interests. I think the implementation and execution of it is what is new and it’s compelled by what I call the crisis in the newspaper business: declining circulation and advertising revenues.

Basically, if you want to cite a trend over the last 10 or 15 years here, it’s been about the personalisation of information, whether it was more focused cable TV, Internet, mobile phones… everything has become personalised except newspapers.

I think its time has come, that the execution is within reach. And I am very aware of the issues with using a big digital printing machine and the cost factors and speed issues associated with that, but we think this works around that issue.

nt: Is this a pilot project or something that will hit the market soon?

Vandevanter: This is a project, but it’s a real project, i.e. we have revenue in the budget for summer 2007, so I have to hit that. What we are really studying at this point is the type of news that they will want because that is real speculation up to now.

The type of news you want falls somewhere between … you know, a lot of people get very business-oriented, business-specific or industry-specific B2B news via e-mail newsletters or by even headlines to their Blackberry, or whatever, so we don’t think this is the type of news that people will want with this product, but it will be personal news of some sort. It might be news about their college that they don’t necessarily check every day, so we are really testing what news people want.

The technology, you know, creating the RSS feeds and getting news paginated to a page, that’s in good shape. We need a paginator to go in there do some cleaning up of the feeds on the page, but I can imagine a day when there is no human intervention there. Then the delivery is, of course, very simple because we are delivering to people who already subscribe to the paper.

Then the value of that front page is pretty predictable, too, because it is beyond direct marketing. You’re getting something at your house that is very targeted for you, that you asked for, unlike direct mail, when you didn’t ask for that junk. If you tell us you are interested in travel, we will get you travel stories. So you will be telling us what you are interested in and we will target the advertising.

And the value of that advertising is very high… we think it is probably somewhere between a dollar and two dollars per ad per person, so if you do the math, it comes out to 1000 or 2000 CPM (cost per thousand), whereas most newspapers get 40 to 60 cpm, so it’s a huge valuable piece of advertising. So we’re not really testing the advertising effectiveness; we’re really testing the people and what kind of news they want.

nt: You said that advertising seems a cinch… what has been the response from advertisers?

Vandavanter: We have done two things that give us advertising rate credence in my opinion.

First of all, we have started what we call ‘homeowners pubs’ in Charlotte, where we will go to a home owners association – Charlotte is a suburban city built on home owners associations and there are thousands of them that each have one or two thousand people – so we will go to them and say, ‘We will print your quarterly newsletter on newsprint if we can sell advertising on it.’ So we have learned the value of advertising in a very tight market. When we are selling advertising into a distribution of 1000 to 2000 people, which is what those publications are, we’re getting easily US$ 100 to 200 CPM.

So we have already shown the exponential growth potential with just the trend that if you have smaller or more tight circulations and distribution, you can charge more for advertising on a CPM basis. It cost us about 25 cents to print that glossy page and 25 cents to deliver it, that’s 50 cents, so if we get a dollar for an ad on the front and a dollar for an ad on the back, we’re profitable. And I think a dollar is the low end. …

Secondly, we’ve had some talks with a local grocery chain because as we know in the newspaper business, they want to dominate the three- to five-mile radius of their grocery store. They will pay very high rates to get into people’s doors (homes), and if we can tell the grocery chains what people are interested in and they (grocery chains) can give them discounts. … for that one store it is very attractive for them. So we have what we consider already a prime advertising candidate.

But until we have about 1000 people using the personalised newspaper, we probably won’t even try to sell the advertising because, obviously, you need enough to make it worth people’s while.

nt: Where exactly is the project at the moment?

Vandevanter: We are still signing up the 24 selected readers, then we’ll conduct some seminars to get their feedback. We need people who are going to give us really good feedback on a daily basis, so there has to be a little work going in to that selection. The truth is, we don’t want more than about 5 percent of our circulation to do this because the hardest part of this, when you get into larger numbers, is the delivery.

We don’t want to burden our carriers too much. We have 225,000 daily circulation. If 5 percent of our circulation wants this for free, because we will offer this for free, then you are looking at about 10,000 people. Most of our carriers have about 200-250 deliveries, and then they would be doing no more than 10-20 per day (with this addition) and we think that’s doable. The way we are ‘selling’ this is that this is a premium service for subscribers and then limit the number of people who can take it. So our goal is that after we get the 24 people tested, we open it up and gain 1000 to 10,000 people, then we can sell advertising.

What’s really good about this is it is really an ‘online play.’ You go online to answer the questions, you can go online to review the page, you can change the page, so we think it will appeal to a certain group of our subscribers, but eventually we think it will appeal to a whole new group of subscribers, which could really help drive circulation.

nt: It’s interesting that you call it a ‘premium service’ yet you will not charge for it?

Vandevanter: (Laughs) That’s a good question. We don’t want to charge for this because there is no reason to charge for this. We think that the advertising is so valuable that we will make our money. This is about added value.

Now I don’t think we will have everybody signing up either, I mean because you have to be somewhat comfortable being online to fill out the questions, and take a look at your own paginated page if you like. But I think once people see it at their house every morning, they will get hooked.

nt: So are you close to formulating ad rates for this, or is that more down the road?

Vandevanter: We have an arm of The Charlotte Observer, as most newspapers do, which does direct mail. We got into the direct mail business years ago because other players were coming into our market. So we are fairly comfortable with presentations to agencies and advertisers about direct mail. And this would be a variation of that.

We know who to go to and what to charge. From my point of view, that’s not the big question anymore. Again, for us the focus is on getting the content right now. That is, will readers like it, take it to work with them, use it. … if that happens, everything else will fall into place.

nt: What are some of the investment considerations for such a project?

Vandevanter: It’s pretty straightforward on the technical side, but I think the biggest challenge for a newspaper in assessing a project like this – at least I know it has been for us – is the fear or distrust that delivery will work, i.e. you really don’t want to deliver the wrong newspaper to the wrong house. That’s one fear.

The second really difficult issue is you’re changing the nature of the paper, and there is always the editorial question of: ‘Have you compromised the integrity of the paper?’ Because you haven’t controlled what goes on that personalised page.

Now, we wouldn’t allow pornography or anything like that, and you can censor what RSS feeds people select, so I don’t think there is a serious question there. But there is a legitimate question as to how people perceive the nature of the newspaper. Those are the challenges that most newspapers face. So to be honest, I don’t think it’s a question of expense up front because it isn’t huge.

nt: On the software side, is there anything heavily involved?

Vandevanter: No, we have all this already in-house. I mean we are really talking about reverse publishing here, i.e. from web to print. Last year we created a very nice auto magazine that we just printed from our web content, so nothing too complex.

This interview was conducted by Dean Roper, editor in chief for Ifra Publications.


Page first published: 15.12.2006