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Presentation for the NAA

Presentation for the NAA. Agenda Challenges The Atlanta Journal-Constitution is facing Our response to those challenges A deep-dive analysis of the status quo The development of a modern, innovative strategy An investment into “niche publications” A high-altitude overview of MundoHispanico.

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Presentation for the NAA

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  1. Presentation for the NAA Agenda • Challenges The Atlanta Journal-Constitution is facing • Our response to those challenges • A deep-dive analysis of the status quo • The development of a modern, innovative strategy • An investment into “niche publications” • A high-altitude overview of MundoHispanico 050127-JEL-AJC-AJC Management Off-Site V3

  2. A difficult landscape for print news • Most major papers have faced steady, persistentcirculation declines for two decades • This trend has been driven by many factors. The most critical are: • Proliferation of alternate news sources including cable and the Internet • Growth in major cities’ transient populations less concerned with the region • Sprawl causing higher commute times and “disconnectedness” • Time pressure in increasingly “always-on” lifestyles • The key result has been the fragmentation of target customer segments—smaller, more numerous groups with increasingly specific needs and behaviors • Moreover, competing media have been better than newspapers at identifying and targeting these specific segments 050127-JEL-AJC-AJC Management Off-Site V3

  3. Average newspaper circulation has been declining since the 1970s 050127-JEL-AJC-AJC Management Off-Site V3 Source: Newspaper Association of America

  4. The AJC’s circulation has declined faster than national average, despite a rapidly growing region 050127-JEL-AJC-AJC Management Off-Site V3 Source: Audit Bureau of Circulation; US Census

  5. The Atlanta market is challenging; fewer Atlantans read newspapers Note: Media Audiences-Average: average issue readers for newspapers; average quarter-hour listeners within a specific Day part for radio; average half-hour viewers within a specific day part for TV and cable Source: 2003 Scarborough Report 050127-JEL-AJC-AJC Management Off-Site V3

  6. The AJC’s challenge…… • Historically, the ajc has been a pure “mass” media paper targeted broadly at the entire MSA; as such, we have had less pressing need for feedback or detailed knowledge about our customers • We have focused on controlling costs and maximizing ad revenue to maintain cash flow with declining revenue, perhaps at the expense of editorial quality • We have also launched a successful Internet play, with outstanding traffic, but the business model is a challenge • None of these steps has served to alter the circulation decline; we must take broader actions. • The key need is to develop a deeper understanding of target customer segments and to create more focused offerings both in print and online • At the same time, we must maintain the strong core – be the key source of news and a powerful vehicle for its delivery 050127-JEL-AJC-AJC Management Off-Site V3

  7. Strategy Development Process—a number of options were considered Cox Atlanta Mass AJC Mass + Target Local Papers Custom AJC Primarily Internet AJC Google • All Cox. All the time. • One brand strategy, combining all Cox Atlanta properties for 24/7 Atlanta news, info, and enter-tainment • Heavy cross-promotion and cross-selling • The media category killer • A regional USA Today, where the news product is built on common denomi-nator stories – sex, crime, etc. • Free distribution with heavy preprints and optimized zoning • A media portfolio company • Flagship AJC evolves but remains, augmented with array of print and online products • Improved operational flexibility drives greater efficiency and sales effective-ness • Cox local papers vs. core AJC • Cox creates separate entities and brands to compete with AJC at local level, but leverage AJC presses and admin • No content or sales shared • Customer-intimate paper • Address-specific customi-zation of newspaper content and delivery location • Knowledge of customers allows for premium pricing, ads, promotions • The online company w/ a paper • Print product is an upscale, leisurely supplement to online, which becomes core product for news • Maximized customi-zation • Highly targeted advertising • Improved classified • Everything you want re: Atlanta • Deep databases have all you need or want to know about Atlanta • Data is unique from that available on Google, such that Google links to AJC Google for info • Most measured medium, enabling pay-for-performance advertising 050127-JEL-AJC-AJC Management Off-Site V3

  8. Mass+Target is the right concept. What does this mean for the AJC? • Research shows more people than ever buy the paper today, but growth in target segments may be better met by other products • Continued focus on maintaining and strengthening the mass is well worthwhile; the specific levers in the near-term are: • Focus zoning in major core counties • Reprioritize what belongs in Zones, Metro and the A section • Enhancements to ad-only offering – preprints, inserts • Maximize targeted advertising opportunities • Launch a portfolio of3-5 new products targeting various market segments • A quick-read version of the mass paper, with shorter stories and a tab format • A targeted publication for women focused on lifestyle and with heavy ad content • An African-American publication that highlights the vibrant community in Atlanta • A Spanish-language publication that serves as an advocate for the Hispanic community • A sophisticated business publication • In addition, the AJC must develop an organization capable of strengthening online classified products and creating new online products • This approach will deliver a flexible platform to evolve with and adapt to the ever-changing market 050127-JEL-AJC-AJC Management Off-Site V3

  9. Customer research revealed six distinct segments • News (23% of the populace): Hard core newsies that want broad, yet detailed coverage; enjoy reading the paper and form the core of the AJC’s subscriber base • Restless (13%): Same as “News” in their needs, but currently dissatisfied with experience and seek several alternative sources of news, including other newspapers • Lite (26%): The largest segment of Atlanta’s residents; they need much of the same content as those in the News and Restless segments but they want the content condensed and to the point • Cultural ID (12%): Want a paper that represents their viewpoint, champions their causes, and reinforces their identification with a particular demographic • Utility (13%): Use the paper for coupons, advertisements, and listings • Convenience (13%): Will read paper only if it is available exactly when they want it 050127-JEL-AJC-AJC Management Off-Site V3

  10. There was already an existing market leader….. 050127-JEL-AJC-AJC Management Off-Site V3

  11. We purchased MundoHispanico May 2004 • Purchase was executed with Lino Dominguez, the founder, owner and proprietor of 25 Years. • Dominguez was asked to stay for a 3-year transition period. • We installed a director-level executive from the AJC as the General Manager of Mundo, and AJC liaison. • We consciously adopted a one-year “hands-off” approach • We were deeply respectful of the vast cultural differences between our two organizations. • Great efforts were taken to respect the autonomy and identity of the company. 050127-JEL-AJC-AJC Management Off-Site V3

  12. It has been Challenging but Rewarding….. Benefits • Instant market domination of Latino territory sales. • Speed to market is much greater than developing a fresh product. • Instant addition of a proven master brand to the portfolio. • Opportunity for rapid growth. • Journalistic values are easier to achieve. Challenges • Growth requires changes. Founders are different than executives. • Installation of “outside” management was met with resistance. • Street credit demands that the culture remain truly Latino. The AJC culture is far from Latino. • Staffing. • “Bolt-on” businesses difficult to integrate. 050127-JEL-AJC-AJC Management Off-Site V3

  13. Growth is a priority…… Population growth is outpacing the business 050127-JEL-AJC-AJC Management Off-Site V3

  14. We must double in size……… 050127-JEL-AJC-AJC Management Off-Site V3

  15. Over the past decade, Mundo’s circulation grew at an explosive rate with the Hispanic community, but, in recent years, it has slowed 050127-JEL-AJC-AJC Management Off-Site V3 Source: Census; Mundo internal data

  16. Today, the market has at least two distinct segments… Mexican Central American South American Puerto Rican Cuban All Other Newer immigrants from Mexico and Central America More assimilated, well-educated Hispanics 050127-JEL-AJC-AJC Management Off-Site V3 Source: Population estimates from 2003 Census; Other demographics from 2000 Census

  17. Mundo indexes very high amongst South Americans * Country percentage of Mundo Readers divided by country percentage of total Hispanic community 050127-JEL-AJC-AJC Management Off-Site V3 Source: 2003 Census; Mundo 2003 Readership Study

  18. So, Increasing penetration into the Mexican community is by far our greatest opportunity… 050127-JEL-AJC-AJC Management Off-Site V3 Source: Mundo Readership Study; Census

  19. Extensive product development lead us to “Pasos” Steps to a better life 050127-JEL-AJC-AJC Management Off-Site V3

  20. A new weekly with timeless, useful information for immigrants and newcomers…….. 050127-JEL-AJC-AJC Management Off-Site V3

  21. How to do taxes….. 050127-JEL-AJC-AJC Management Off-Site V3

  22. Dealing with strange American things like……. SHEETROCK! 050127-JEL-AJC-AJC Management Off-Site V3

  23. What to know about….. Buying a car. 050127-JEL-AJC-AJC Management Off-Site V3

  24. At the same time we’re improving the core • Mundo needed a bolder, fresher look. • The paper hadn’t changed in nearly 10 years. • The fledgling website was very low on traffic. • Sales were growing, but not nearly keeping pace with the population. 050127-JEL-AJC-AJC Management Off-Site V3

  25. That was then…………. 050127-JEL-AJC-AJC Management Off-Site V3

  26. This is now……….. 050127-JEL-AJC-AJC Management Off-Site V3

  27. Bolder and more engaging……… 050127-JEL-AJC-AJC Management Off-Site V3

  28. And the website is also being improved….. 050127-JEL-AJC-AJC Management Off-Site V3

  29. For a robust portfolio of Hispanic niche products 050127-JEL-AJC-AJC Management Off-Site V3

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