Oct 25, 2005
Britain's newspaper industry is much more vibrant than America's, in terms of the number of major dailies in circulation, but the papers face the same problem of declining, aging readership. One recently hot remedy is to change to a tabloid format; McKinsey investigated this phenomenon and published a thoughtful article examining the risks and rewards.
The article contains a problematic chart shown on the right. (The junkchart version is below.)
The title of this chart is "Mixed results". This message is much clearer in our junkchart version, where everything below the line is bad; everything above, good (or indifferent).
Also note that I plotted raw numbers, rather than percentages. With only 14 cases, "10%" represent one newspaper so why obfuscate?
Connecting lines between columns are supposed to aid our comparison of segments across different columns. For the moment, where you see increase/no change/decrease, think national/regional/local (newspapers). Note the difference: national/ regional/local are pre-existing segments so that each newspaper stays in the same segment across the four columns; increase/neutral/decrease are post-hoc segments based on measured responses so that the same newspaper can show up as "decrease" in Ad Revenue but "increase" in circulation.
Finally, lets discuss comparability. Did changing to tabloid format help or hurt the newspapers in each of four response metrics?
To answer this question properly requires using our imagination because we should be comparing the actual scenario of what happened after the Independent newspaper switched to tabloid with the imaginary scenario where the Independent did not switch. The latter is not observable so statisticians would find a proxy for the Independent, say a similar newspaper, which did not make the switch and compare that with the Independent. Further, we would look at many similar newspapers, not just two, in order to generalize our result.
The proxy, also called the "control", is necessary to establish causality. The consultants' analysis omitted a proxy: all they did was to compare the same newspaper before and after it switched formats, and then only for those papers that made the switch.
Reference: "Dwindling readership: Are tabloids the answer?", McKinsey Quarterly, Jan 2005.
The comparability issue is complicated in this example by the fact that newspapers, especially those in the same country, are not (statistically) independent. Increased circulation in some is likely to be matched by a decrease in circulation in others.
Posted by: Tom Fanshawe | Oct 28, 2005 at 04:17 AM