Case Study

CityXpress Client Betters Auction Performance in Tough Economic Times

"This is a great product line. It is fun to sell and motivating to the sales staff. It is a revenue generator that circumvents a price variable, which continues to be a hurdle for our advertisers in this economy. It also creates a real branding opportunity for the newspaper."

Kelly Gambini - Publication Manager, The Patriot-News, Harrisburg, PA

There is no denying that newspapers are weathering tough economic times, or that most are facing decreased advertising revenue. But all is not doom and gloom in the industry. Just look at The Patriot-News in Harrisburg, PA for inspiration. By using the CityXpress auction program, this 98,000 circulation newspaper created $2 million in new revenue since January 2007.

The Patriot-News is going against the trend, and improving revenue by selling auction financed advertising campaigns to local businesses.

A CityXpress client since April 2006, the Patriot-News moved to a three auction per year strategy in 2007 and repeated the formula in 2008. In 2009 and exceeded their conservative goal of $500,000 in revenue by 44% by generating more than $793,000 in revenue over three auctions.

"Our first spring product auction was highly successful," explains Kelly Gambini, the paper's Publication Manager. "And the gift certificate auction was a natural kick-off to our fourth quarter product portfolio, which includes a targeted publication running every Sunday through the first week in December."

The Patriot-News found the gift certificate auction to be less involved from a sales and production process. It also resulted in an extremely high sell-through for the advertisers and offered them the dollars required to expand their ad schedules during a critical time of the year.

"The web presence, continued promotion and the traffic that the auction drove to store locations were major selling features to our advertisers, as well," Gambini continues.

"The third auction was added for our seasonal businesses and also because of how the previous auctions were embraced by both our advertisers and readers."

But when it comes right down to it the main reason for staging any auction, whether one or several in a year, is that they are proven revenue generators.

"Of course, the substantial revenue that auctions drive is the final reason," Gambini agrees. "Any auction is the perfect vehicle to introduce new advertisers to the newspaper via a trade agreement, which is key terminology in a cash poor, competitive environment. It also offers them mass exposure of their product and service lines as well as a test opportunity with their accrued ad credits in our product lines."

With their two event auctions (spring and fall) supplemented by the November gift certificate auction, The Patriot-News succeeded not only in staging three auctions, but bettered their performance each year since moving to a three auction schedule.

In fact, in 2009 the paper exceeded their 2008 performance in nearly every category � most importantly, revenue. And each auction outperformed its counterpart from the previous year.

	Gross Auction Retail Value	Auction Revenue	% Sold Auction Items	% Ad Credit Discount
Event Auction April 2007	$791,928	$284,890	70.0%	36.2%
Event Auction Sept. 2007	$659,200	$185,674	65.0%	41.3%
Gift Certificate Auction Nov. 2007	$304,284	$105,654	72.7%	39.0%
Total For 2007 Auctions	$1,755,413	$576,220	69.9%	38.8%

Event Auction April 2008	$864,639	$318,943	60.6%	38.3%
Event Auction Sept. 2008	$570,017	$199,469	63.7%	41.9%
Gift Certificate Auction Nov. 2008	$328,189	$121,065	75.4%	42.1%
Total For 2008 Auctions	$1,762,847	$639,479	72.2%	40.8%

Event Auction April 2009	$918,204	$296,919	59.1%	40.6%
Event Auction Sept. 2009	$782,850	$255,755	65.6%	39.8%
Gift Certificate Auction Nov. 2009	$422,536	$240,783	63.2%	42.1%
Total For 2009 Auctions	$2,123,590	$793,457	62.6%	40.8%

The numbers prove that The Patriot-News knows how to stage auctions. But they don't explain what management and staff do to create these types of results. So what makes The Patriot-News so good at delivering this program?

"Targeting... targeting... targeting," insists Gambini. "Targeting hot advertisers, repeating the mantra: 'moderate price, mass consumer appeal' and having an extensive multi-media promotional campaign to create a market-wide event makes our auctions successful. The final piece of advice would be to have a strong internal team in all of the required support departments."

"The Patriot-News is a prime example of a paper that has done it right and is reaping the benefits," says Steve Raizen, CityXpress' VP of Sales Support. "They've followed our guidelines about targeting appropriate advertisers and selecting the best selling auction products. And they've focused on their internal organization to create a smooth process and minimize their workload."

With the critical components in place, The Patriot-News is set to continue meeting high expectations this year, and into the future. As well as achieving auction revenue close to $800,000 in 2009, these expectations included introducing new advertisers to the paper's product line, offering the sales force a fun and exciting product to sell and building a more progressive portfolio than standard newspaper options.

"This is a great product line and we plan to do even better with it in 2010," Gambini says. "It is fun to sell and motivating to the sales staff. It is a revenue generator that circumvents a price variable, which continues to be a hurdle for our advertisers in this economy. It also creates a real branding opportunity for the newspaper."