Household Penetration - What Makes the Difference?
Why is it that household penetration of daily newspapers varies more than 25 percentage points between the states of Colorado and Georgia? Why do the states in the top quartile of household penetration have, on average, 15 percentage points greater penetration than those in the lowest quartile? Does household penetration really make a difference when it comes to the value of a newspaper? DV&M looked at a number of factors impacting household penetration in an effort to find some clues.
We recognize that subjective factors such as the editorial quality of the newspaper, its design, printing quality and other less tangible factors are major components impacting penetration. A conclusive study of the subject of household penetration would encompass all these intangible elements. Likewise, readership scores in a market may be a truer measure of the reach of a newspaper. Nevertheless, and far from being conclusive, the summary of data in the chart below is useful in identifying some patterns.
DV&M looked at a number of tangible factors, measured broadly at the state level. A clear pattern emerged along geographic lines. The map above shows 13 states with the highest daily circulation penetration along with the 13 states with the lowest household penetration. A decisive north/south pattern emerges; however, the difference in statewide penetration in these regions is due to a multiplicity of factors rather than simply the outside temperature in January.
We examined age variation and levels of income and education from state to state as additional contributing factors. Our results are summarized in the chart below.
Most circulation studies show that age is a very important component in identifying likely subscribers. Older rather than younger residents are more likely to subscribe to a daily newspaper. Specifically, people over 35 are much more likely to buy a newspaper than those between 18 and 34. However, when you examine the median ages of the states of Colorado, Utah and Kansas, which rank in the top quartile of daily circulation penetration, you’ll find that they are also three of the states with the lowest median age. On the other hand, confirming the age factor, five states -- Pennsylvania, Vermont, Connecticut, Massachusetts and Iowa -- rank in the quartile of states with the highest newspaper penetration and also have the highest median age.
Further analysis provided a more conclusive correlation with age. We grouped state residents into three age categories - those under 18, the non-subscribers; those between 18 and 34, thought to be the most difficult to convert to subscribers; and those 35 and older, thought to be the most loyal newspaper subscribers.
The 50 states were ranked within each of the two latter age categories. For the age 18-34 category, the state with the smallest percentage of population in this age group received a ranking of 1. For the age 35 and older category, a ranking of 1 represents the state with the highest percentage of population age 35 and older. One would expect states with a small percentage of the population between 18 to 34 and a high percentage 35 and older to have a higher household penetration. Of those states in the highest quartile of household penetration, however, only four rank as the states with the lowest percentage of 18 to 34 year-olds. However, among the states with the lowest household penetration there is a much truer correlation with the states with the highest percentage of 18 to 34 year-olds.
The 35 and older category shows that about half the states with the highest household penetration are also the states with the highest percentage of the population 35 and older. Likewise, the states with the lowest household penetration have the lowest percentage of older residents.
Household income is also recognized as a factor contributing to newspaper penetration. Connecticut, New Jersey, and Massachusetts rank first, second and fourth respectively when it comes to the highest average EBI per household. All three also rank in the highest quartile of household penetrations states. However, bucking conventional thought on the correlation between income and penetration are Vermont and Iowa, which rank 35th and 36th in EBI per household and also rank in the top penetration quartile. Interestingly, Nevada and Texas, which rank 9th and 13th in EBI rank 47th and 43rd in daily newspaper penetration, respectively.
The final measure we reviewed was educational level. We calculated the percentage of population 25 years and older that had attained at least a bachelor’s degree. This measure proved to have a fairly high correlation with household penetration. This was especially true for the states with the highest household penetration, whereas most of the states with the lowest penetration also had the smallest percentage of adults with at least a bachelor’s degree. Six of the states with the highest penetration were also in the top quartile in terms of level of education achieved.
In addition to geography, age, income and education, other tangible factors such as the ethnic makeup of a market, migration patterns, commute time, as well as quality of product and service affect newspaper household penetration.