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Newspaper / Media Company

Optimize Pricing, Discounting and Product Feature Bundling

A major newspaper chain with additional internet properties was worried about the problem of thinning print revenues in its classified ad business. Particular concern was focused on the job "want ads" section of the paper. While the company had developed a companion online property and was beginning to migrate towards online classifieds to compete with the emerging titans like Monster.com, they did not know how to price ads across newspaper and internet properties in a coordinated way. And they also didn't know how best to bundle classified job ad packages offering newspaper classified ads with linkages to companion ads on their internet property.

MDS was retained to use its Demand Optimization™ approach to address the problem of bundling and pricing across newspaper and internet properties. Using a mix of actual ad sales data and survey based discrete choice modeling, MDS developed a want ad demand model that was specific to each of the chains major papers and geographies. This allowed us to optimize the bundle of paper and web based job ad packages and set an optimal price simultaneously. As a result of this work, the client successfully raised prices across the board and launched new the bundled products in two test markets.

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