commissioned by Kamahalan Publishing to study the profitability of putting up a freely circulated newspaper with revenues solely driven by advertising revenue. Visit my travel, tours and photography website at www.paparazsea.com
Freely Circulated Newspaper Marketing Plan + Case Study
1. Prepared: August 28, 2006
EXPRESS: Marketing Plan
I. BIG IDEA: EXPRESS is the latest, most informative & most sought after FREELY Circulated Tabloid to
hit People in Transit. It empowers Advertisers Brands market their products and services to an ASSURED and
sought after 18-35 broad C target market.
II. The Challenge
• Goal: P50M Gross Annual Ad revenue per Year target
o P4,166,666 gross advertising monthly target
o P208,333 gross ad sales/day target
Roughly 50% of Inquirer Libre 2005 ad revenue of P99.7M -Based on Nielsen – rate
card basis
• 2004 Jan-Dec- Income P83.4M on rate card
• 2005 Jan-Dec- Income P99.7M on rate card
• 2006 Jan-Aug 22- Income P58.9M on rate card
• To get net figures, further remove 30% from rates
• Sales Figures:
o Gross Profit of P10,400,000 (at projected P50M target, even spread of 12 months)
o P39.6M Breakeven Point (P3.3M breakeven/month, P165,000/day)
Based on CEC projections- Monthly out
• Production- P2M
• Three (3) staff- P100,000
• Sales Commissions- at 10%- P500,000
• Distribution- 80,000
• Strategic Goals:
o To Be the Paper of Choice By the MRT/LRT Riding Public
Must be Relevant, Trendsetting & Maverick
Provides Daily Promo Coupons
o To Be the Preferred Advertising venue by the advertising players
Awareness Campaign- 1st 3 months
• Tie Up Content with Winning Media Brands
o GMA 7? QTV? Jack TV? ETC? Cinemas? 89.9TM?, Jam 88.3?, 101.1
Yes FM
• Agency/Client Presentations
Reader Feedback Surveys- Strictly monitor right after launch
III. Situation Analysis
Company Analysis: Express & KPC
• Goals: In Need of new source of revenue to arrest losses in current MST operation
• Focus: Make Express breakthrough product of KPC
• Opportunity: Create synergy with existing Manila Standard Today paper.
• Culture: Traditional
• Strengths:
1
2. o Connections/Ties with MRT/LRT Head of Operations
o Existing Printing Facilities
o Existing News Editorial Writers/Content
o Principal with Big Warchest
• Weaknessess:
o Content Management
o Dilapidated Printing facilities
o Principal stringent with investing further based on past experiences.
• Market Share: MST at 1% market share in terms of Ad revenue, 0.5% in circulation (as per AC
Nielsen 2005 data, MST at P47M vs.P7.7B tot print ad rev)
Customer Analysis
• Number: Total 22.9M monthly riders (763,000 daily riders)
o MRT- 10.7M monthly (source: www.dotcmrt3.gov.ph)
o LRT 1- 8.7M monthly (souce: www.lrta.gov.ph)
o LRT 1- 3.5M monthly (souce: www.lrta.gov.ph)
o
• Type: Students & Urban Professionals aged 16-40 Male Female
Note: More advertisers target Women
Justification: as per Nielsen, 8 out of 10 top magazines ad revenue target female market
• Value Drivers: Jobs, Shopping, Gimmick, Entertainment, Showbiz Gossip, Fashion Trends, Music,
Cellphones/Gadgets, Food, Sports
• Decision Process: Quick, Easy to shift, experimental and experiential, fickle
• Concentration of customer base for particular products
o Personal Hygiene, Groceries (Food/Beverage), Telco, Cellphones/Gadgets, Alchoholic
Beverages and Cigarettes, Fashion, Pharma, etc.
Competitor Analysis
INQUIRER LIBRE
• Market Position: No. 1
o 95% in terms of Ad revenue- P99.7M vs P3M of Pasayo
• Strengths:
o FIRST-established brand
o Anchored on strong brand- Inquirer
o Strong brand name- LIBRE
o Wide advertising acceptance
o Horoscope- Against tradition, it’s funny, appeals to MRT audience
• Weaknesses
o Distribution & Availability
o Terms of deployment (First come first serve)
• Market Shares (in terms of Ad Revenue)
o Inquirer Libre- 95%
o Pasayo- 5%
o Star Blitz- 0%
2
3. o Transit 0%
Note: Inquirer Libre is sold on its own, ‘Not’ as a combo package with Inquirer. The combo package
exclusive to Hip/Inq Magazines (Swing, MPH, Gaming Monthly, Burn)
In Summary
1. Ad Revenue (based on AC Nielsen Jan-Aug 22-06 data)
MRT Pub Ad revenue
inq libre 58,920 95.2%
pasayo
peoples plus 1,532 2.5%
news plus 1,439 2.3%
TOTAL 61,891
others not available
2. Inquirer Libre Advertising Rates
Col/Cm 231
Col Surch + 80%
Pos. Surch + 15-30%
In Detail
Front
Back Pos. Pos.
Specs B/W Full Color Surcharge Surcharge
Full Page 7x30 48,510 87,318 100,416 113,513
3/4 Page 7x23 37,191 66,943 76,984 87,026
Half Page 7x15 24,225 43,659 50,208 56,757
1/4 Page 12,127 21,829 25,103 28,378
Special Execution Rates
FALSE COVER- Your Brand is the Front Page New s
PACKAGE 1
Front False Cover (Full-Color),
Full Page Ad (Full-Color, Inside or Back)
Inside Front Cover (Black & White)*
Php 174,636.00
Value: 249,341
Savings 74,705 30%
PACKAGE 2
False Cover Full Spread (Full-Color),
Inside Front Cover (Black & White)*
Php 183,000.00
Value 262,439
Savings 79,439 30%
PACKAGE 3
Front False Cover (Full-Color)
Php 113,513.40
Value 113513
Savings 0
Collaborators
3
4. • Subsidaries, joint ventures and distributors
o MRT benefit/ Revenue (distributor)
o Tie Ups with companies to provide discounts (content joint venture)
o Tie Ups with Media brands to guarantee tri-media promotions (content joint venture)
o Opportunity to freely circulate in other areas (e.g. Malls, Paking Areas, Bus Stations, Supper
Ferry)-will increase expenses but will strengthen reason for advertisers to come in.
Climate
Macro-environmental PEST analysis
• Political and legal environment
o Right Connections Give KPC an advantage
o Better Deals, Better Merchandising Opportunities
• Economic environment
o It’s Free, How to win advertisers is the economic challenge
• Social and Cultural Env
o Gives riding public an additional choice in free information & entertainment
• Technological Env
o Precise Target Hits (by concentrating in MRT/LRT lines) & advancement from current
publication business module (Purely ad revenue based income)
SWOT Analysis
Strengths Weak ness
> Connections with Venue of Circ > Content Management
> Existing Content & Printing Facilities > Dilapidated Printing Facilities
> Principal with big financial warchest > Principal wait & see/ support issues
Opportunities Threats
> Steal 50% Ad Revenue share ist year > Strong No. 1 Position of Inq Libre
> Synnergy with MST Publication > Entrants of new players
> Tie Ups with media to ensure coverage > advertisers/Client Acceptance
IV. Market Segmentation
• Description: Two Markets: ADVERTISER & READER
• Percent of Sales: 50% Target revenue of Inquirer- P50M vs. P100M of Inq Libre (Advertiser)
• What they Want: Meaningful/Abruptive/Relevant Content/ Visible/ Better Ad Rates, Packaging &
Bonuses (Advertiser) **note-most media buyers and junior marketing managers take MRT/LRT to
work.
• How they use product: Marketing Tool/Media Venue (Advertiser) Get News, Information &
Entertainment (Reader)
• Support requirements: Must be interesting, sought after, talked about for advertisers to take a second
look at. Must have content which Inquirer Libre does not support.
• How to reach them: Tri Media Visibility, Agency Client Presentations (Advertiser) Better positioning
in MRT malls than Inq Libre (Reader)
• Price sensitivity: In terms of advertisement, better value for advertisers than Inquirer Libre despite
same circulation. (Advertiser)
4
5. V. Alternative Marketing Strategies
• Position Express as the Free Daily Jobs/Career Paper circulated in MRT, with Media Guide Inside
• Position Express as the Free Daily Gadgets Paper circulated in MRT, with Media Guide Inside
• Position Express as the Free Daily Urban Life Paper Circulated Paper., with Interactive Component.
• Position Express as the Free Daily Humor Publication circulated in MRT, with Media Guide inside.
• Position Express as the Great Mall Finds Paper, What to do once disembarking MRT.
Diverge Sections, Niche within MRT Station an opportunity.
Copy successful publications formats and adapt own style.
VI. Selected Marketing Strategy
Position ‘Express’ as a Freely Circulated Paper exclusively within MRT/LRT anchored on the content of
current broadsheet Manila Standard Today. It strength lies in its various promo coupon content and TV &
Entertainment guides inside. Our transit market will be a good selling proposition to various advertising
players.
PRODUCT (C/O JAR)
The product decisions should consider the products advantages and how they will they be leveraged. Product
decisions should include
• BRAND NAME
• POSITION
• SELLING POINT (to advertiser and reader in terms of content)
• MOCK UP (visual appeal)
PRICE- Advertising Rates
Strategy: Make Rate Card same as Inquirer Libre, but have EXPRESS/ MST Combo Packages
Lowest Cost/Col Cm threshold at P150
In case of no advertising support, prepare to give rates as low as P50 per col/cm.
5
6. EXPRESS Proposed Advertisers Rates
Col/Cm 231 Same as Libre
Col Surch + 80%
Pos. Surch + 15-30%
Cost At P231 Rate Card
Front
Back Pos. Pos.
Specs B/W Full Color Surcharge Surcharge
Full Page 7x30 48,510 87,318 100,416 113,513
3/4 Page 7x23 37,191 66,943 76,984 87,026
Half Page 7x15 24,255 43,659 50,208 56,757
1/4 Page 3.5 x 15 12,128 21,829 25,103 28,378
We Go as Low as P150 col/cm for extra discriminating and eccentric clients
35% off Rate Card
Cost At P150 col/cm
Front
Back Pos. Pos.
Specs B/W Full Color Surcharge Surcharge
Full Page 7x30 31,500 56,700 65,205 73,710
3/4 Page 7x23 24,150 66,943 76,984 87,026
Half Page 7x15 15,750 43,659 50,208 56,757
1/4 Page 3.5 x 15 7,875 21,829 25,103 28,378
X-Deals/Barter 100% rate card
Long Term Packaqes= Availment of Combo
Package A: P500,000 ads in Express entitles you to Four Free Ear Ads (2x5)
or Two (2) Press Releases in MST
Breakdown Sample
500,000 Express Value Paying
6 Full Page Ads 500,000 yes
MST
4 Ear Ads 8,360 free
OR
2 Press Releases free
Package B: P500,000 ads in MST entitles you to Free Ear Ads in Express
Breakdown Sample
500,000 MST Value Paying
3 FPFC Ads 500,000 yes
Express
4 Ear Ads 8,360 free
Plus free 4 releases in MST
Package C- FALSE COVER, Pattern out with Inquirer Libre
PACKAGE 1
Front False Cover (Full-Color),
Full Page Ad (Full-Color, Inside or Back)
Inside Front Cover (Black & White)*
Php 174,636.00
Value: 223,146
Savings 48,510 22%
PACKAGE 3
Front False Cover Only (Full-Color)
Php 113,513.40
Value 113513
Savings 0
6
7. DISTRIBUTION (Place)
Select stations with high traffic, relevant purchase points
• MRT Edsa North Edsa, Cubao, Ortigas, Makati Stations
• LRT 1: Edsa, Monumento
• MRT 2: Cubao, Katipunan
Instead of FREE in the morning Inquirer Libre strategy in location, paying customers from 10am-4pm get
copies of Express, OR Strictly deploy 8AM, time when office workers (think advertisers, marketing
professionals take MRT/LRT) still free but managed circulation. Big concern of advertisers.
PROMOTION
• MEDIA TIE UPS TO GAIN PUBLICITY (TV, RC, MAGAZINES)
• Lots of Posters, Streamers within MRT
o Theres more reason to ride the MRT- Express
• House Ads Within Manila Standard Today Paper & Website
• Devote standard 1.5 pages to media partners (worth approximately P150k to P200k daily in media
barter deals/ roughly P2M a month)
Express needs to be more pro-active in promotions to create atmosphere of being bigger and better or strong
alternative to Inquirer Libre
VII. Expenditures VS. Revenue Projections
Expenditure Summary 2007 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cost (000') What
1. Production
paper, prod, salaries,
50,000 copies daily, 36300 commissions, etc. 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300
in line with repairs of printing
2. Promotions
MST (print & web) + TV partner + RC Partner + Magazine Partner + Posters/Streamers in MRT/LRT
Barter Airtime/Space within Express & Manila Standard Today
45 TV material 45
25 Radio material 25
0 mags (c/o Byron) 0
500 Posters 500 500
3. Client Agency Presentations
150 Tokens/Dine Out 50 10 10 10 10 10 10 10 10 10 10
TOTAL Investment 37,020
Sales Projection 2007 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Optimistic Projection
Pre-Sell start Nov 2006 REV (000')
38500 1500 2000 3000 4000 4000 4000 4000 4000 4000 4000 4000
No. of FPFC Ads Monthly (used P63k, at P150 cost/colcm) 24 32 48 63 63 63 63 63 63 63 63
No of FPFC Ads Daily/ 20 days 1.2 1.6 2.4 3.2 3.2 3.2 3.2 3.2 3.2 3.2 3.2
*Media Ex-Deals not included in sales
P0.9M Profit 980 (2,420) (1,310) (310) 690 690 190 690 690 690 690 690
Realistic Projection
Pre-Sell start Nov 2006 REV (000')
31500 1000 1500 2000 3000 3000 3500 4000 4000 3500 3000 3000
No. of FPFC Ads Monthly 16 24 32 48 48 56 63 63 56 48 48
No of FPFC Ads Daily/ 20 days 0.8 1.2 1.6 2.4 2.4 2.8 3.2 3.2 2.8 2.4 2.4
*Media Ex-Deals not included in sales
P6.02M LOSS (6,020) (2,920) (1,810) (1,310) (310) (310) (310) 690 690 190 (310) (310)
7
8. VIII. Conclusion
In Principle, The Express effort is a winner from all angles. The greatest challenge though is since Advertising
will be the only source of revenue from this effort, the strategy and content must be in line with what clients
& advertisers expect. Aside from this, we have to contend with the fact that there already exists a strong brand
which has been successfully operating for three years. ( If you were to buy Bottled Green Iced Tea, which will
you choose C2of URC or One of Zesto?) Our content must truly be groundbreaking to be talked about by the
transit market (15-40 Broad C Male/Female) which will translate to winning advertisers share of monies. The
trick in succeeding to position Express as the Free tabloid with Substance and relevance, not just another 12
page freely circulated tabloid to hit the MRT/LRT.
Marketing will play a vital role in Express success since it will do all tie ups to ensure ‘Express’ is properly
promoted on select TV and Radio stations. Media Presence will give Express a slight advantage over Libre.
(Ma Mon Luk and Tankationg (Jollibee) used to be very good friends. Tankationg invested a lot in
advertising while Ma Mon Luk maintained his day top day operations, scoffed at advertising and its’ great
products which sell, not expensive advertising. After 20 years, the disparity is clearly evident that advertising
has been a big catalyst in Jollibee’s success. )
With the given projected operating expense of P3.3 million a month by Finance, Marketing has set Ad Sales
Targets P4 million a month, roughly half of Inquirer Libre’s P8M monthly ad revenue.
An optimistic projection shows that if all variables go according to plan, KPC stands to earn an additional
P900,000 a year.
Another projection shows that with our present handicap and combined with other intangibles (aptitude of
sales teams and existing support staff), KPC might stand to loose more or less P6M annually.
Bottomline, Inquirer Libre has shown that being a freely circulated paper can earn around P100M a year and
all things considered, a very good indication that Express as a business venture will succeed.
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Additional Info: Revenue of Advertisers per listed publication titles
Source: Nielsen Ad Quest:
Note: 2006 Jan-Aug 22 data only
Report Heading 2
Jan-Aug 22,
Currency P000's 2006
Share
06
Grand Y2003 Y2004 Y2005 Y2006 *
ran Total Total Total Total Total
k
PHIL. DAILY
1 INQUIRER 9,370,230 2,399,800 2,711,405 2,701,203 1,557,822 33%
2 PHILIPPINE STAR 8,104,662 2,005,075 2,320,443 2,385,627 1,393,517 30%
3 MANILA BULLETIN 4,791,773 1,210,864 1,355,430 1,378,850 846,630 18%
4 BUSINESS WORLD 694,975 133,353 189,823 228,454 143,345 3%
PEOPLE'S
5 JOURNAL 580,030 154,277 179,415 161,282 85,056 2%
6 SUNSTAR CEBU 67,476 0 0 0 67,476 1%
7 INQUIRER LIBRE 242,088 0 83,422 99,745 58,920 1%
PILIPINO STAR
8 NGAYON 181,756 0 53,352 71,040 57,363 1%
8