Free dailies can offer publishers targeted opportunities to reach new and existing advertisers, as well as new and hard-to-reach readers; however, the emergence of free newspapers over the past three
years has not created the seismic shift in the industry that many expected. These conclusions are part of a recent analysis of free daily newspaper readership by Scarborough Research and
The New
York Times.
The analysis, presented at last month's World Wide Readership Research Symposium in Prague, made four primary conclusions:
1. Free newspapers do not cannibalize
paid papers. The analysis found that while free tabloids have gained readership--usually plateauing at 5 percent to 8 percent of the market's adult population--the levels of readership for the
major paid newspapers in the four markets studied have not suffered materially as a result. The research found this is in part because readers are not choosing paid newspapers by price--so the arrival
of a free alternative does not have perceived cost-savings benefit. 2. Readers of free dailies more closely resemble paid newspaper readers than the industry might have expected. The analysis
found that--compared to paid newspaper readers--those who read free papers are generally slightly younger than paid readers, and more ethnically diverse. They are from households with somewhat lower
incomes than traditional paid newspaper readers. However, there is little difference in the levels of educational attainment for free/low-cost readers and paid daily readers. These findings suggest
that free dailies can broaden a publisher's coverage into desirable younger demographic groups, but not as dramatically as conventional wisdom might suggest. 3. Free daily distribution has a major
impact on readership. Many of the free dailies studied were distributed at major commuter hubs. In fact, the research suggested that readership was determined more by the transportation
behaviors of the readers than by pricing or other demographic factors.
4. Readers of free papers are very likely to be reading paid newspapers already. The analysis found very high
levels of free to paid duplication. In addition, free readers were also quite likely to buy more than one paper where available.
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Taken together, the high level of duplicated free-paid
publication reading, the relatively stable levels of paid readership and the plateauing of free readership levels are strong evidence that free newspapers do not pose a significant competitive threat
to their paid counterparts. In addition, the research found that those who read free newspapers exclusively are a small group who seem unlikely, due to life circumstances, to "trade up" to a paid
newspaper.
That being said, the report indicates that under certain conditions, it can make sense for a traditional paid newspaper to publish a free daily. Among the benefits that a number of
these publishers can and are realizing:
Free dailies can offer existing advertisers additional consumer "touchpoints" throughout the day, reinforcing the publishers' brand identity and offering
advertisers the ability to potentially strengthen their dialogue with consumers. Free dailies can help traditional publishers attract new advertisers who can't afford the main paper. As
discussed earlier in this piece, free dailies can help traditional publishers attract new or hard-to-reach readers using physical distribution as a marketing lever. Free dailies have existed
in the United States for less than three years, and it is still very early to judge what impact they will ultimately have on their "for pay" counterparts. At present, free dailies appear to be a
useful strategy for certain traditional publishers looking to strategically expand their advertising and readership opportunities. But perhaps the most important point of the study: publishers need
to continue to look for additional ways to solve the problem of migrating audiences. As the findings of our research suggest, free dailies--regardless of how they evolve or expand in the future--will
likely not be enough.
The paper in its entirety is available for download on the Scarborough website, www.scarborough.com/press.php.