"The growth going forward is home," says P. Scott McKibben, president and publisher. "We believe this model is truly the wave of the future."
Some obvious caveats: The market's leading daily, Hearst's San Francisco Chronicle, boasts a (paid) daily circulation topping 500,000, around five times the Examiner's. And there are issues concerning marketers' assessments of the value of free circulation.
Ellen Kiyomizu, senior VP-group media director at Publicis Groupe's Publicis & Hal Riney, San Francisco, calls herself "cautious" when it comes to free publications, saying her clients "want audited circulation, and paid circulation." The Examiner's circulation is audited by Verified Audit Circulation.
Still, some see wisdom in the Examiner's new approach.
"It's a really smart move," says David Cole, an editor of newsletters aimed at the industry, and a onetime Examiner staffer. "From an advertising perspective, paid media always looked down its nose at free media. But, as paid circulation continues to go down, you have to figure out the best way to deliver that audience."
The Examiner was sold to the powerful local Fang family in 2000 as part of a deal in which Hearst purchased the morning Chronicle. The Fang family, after a rather colorful run, sold the paper this year, along with rights to its renowned and zany "Bay to Breakers" race, to Denver investor Philip Anschutz's Anschutz Corp. (Included in the deal is the thrice-weekly San Francisco Independent.)
The Examiner's free distribution will be centered within a three- to five mile radius of major retail shopping locations, says McKibben. Within those areas, free delivery will be matched with demographically targeted audiences, primarily 25-to-49-year-olds with $75,000-plus income.
Overall, McKibben says, the Examiner's circulation is 110,000, with only 12,000 of those home-delivered. But by year's end, the Examiner expects home delivery to make up more than half of its 200,000 circulation goal.
Mr. McKibben says a strategy centered on free distribution to the right readers makes sound economic sense.
"The infrastructure required to deal with paid circulation is exorbitant," he says. The "efficiencies" also result in price savings to advertisers able to target consumers by zip code and other demographic information, says McKibben, who declines to discuss ad rates.
down the road
"We are happy with the success we have had so far," says McKibben. "I don't think we've hit a home run right off the bat," he adds, saying he's looking at two years to prove the model works.
Cole thinks five years is more like it. "Clearly Anschutz is giving Mr. McKibben a lot of elbow room," he says, adding there's a prospect of a growing Anschutz newspaper empire.
Dan Payomo, the Examiner's VP-advertising, says both national and local marketers are beginning to understand the model, with ads now coming from the likes of Microsoft.
Like free American dailies from Sweden's Metro International, the Examiner's editorial focuses on local news, lifestyle features and sports.
Still, free has its price in the world of media buyers, despite the growth of free daily newspapers globally (AA, April 19).
Jane Groft, senior VP-corporate media director at Riney, San Francisco, says if the Examiner wants to be a free publication, it will have to find a niche audience. "We love competition, so we hope they can do something with it," says Groft, whose agency buys for Sprint Corp. and Hewlett-Packard Co.
But, she warns, "everybody has a wait-and-see attitude."