Lessons from 2012 for Business & Politics

Posted on December 20, 2012 by Lyn Bunch

The 2012 election drives home some basic new realities about how we communicate and conduct our business and our daily lives. The advent of the digital and social world has changed us forever. In politics as in business we see those who are on the leading edge, and the stragglers. Many of my clients, and certainly my future clients, have come to this understanding late.

Here are a few thoughts on how this worked out for the latest election cycle. Everything we saw as business and communications work nearly exactly the same in business as politics. One side triumphed over the other, and the reasons were more for business practices in the conduct of the marketing for the election, than in purely political leanings. Just a few thoughts…

Nate Silver and the Pundits The biggest winner of the 2012 election cycle was 538 - by Nate Silver. The success of Nate with his ‘system’ that followed individual polls, weighted the results, and then posits results by election area, became a new standard for tracking forecasts. The single poll as a key talking point will recede as conglomerated results become the new norm. This will also impact the role of the pundit who is basing their forecasts on feelings and not empirical data. Pundits were especially routed in this election cycle when their results did not match the data on the ground, and the final results. They are now relegated to mere ‘talking heads’ and all of their wishing on hoping are just that. Show me the data is what we now expect.

The Role of Social Media The biggest change in this campaign from 2008 to 2012 was the role of social media. 2008 was the digital campaign yea . 2012 became the social campaign, all of the benefits of the digital conduit for communications, along with tailored messaging, and listening, with their targeted audiences. Obama’s team built a large social-digital staff that literally drove the campaign. Nothing did more for the Obama campaign, and this will set the standard for all future campaigns. Little time here for the details, and I will go into more detail in future posts, but for now, we must see that a return to more traditional messaging will not work in future campaigns. The die is cast.

The Power of Print Media Print media still lives, and will still have a key role in future campaigns, just as they do for day to day business, but it will play a lesser role in the future. The power of the press, and especially of the official endorsements no longer drives the electorate. Day by day, their hold on the public is loosened. The results of who endorsed each of the candidates had a low correlation to the final outcome. We now want newspapers to tell us what is going on, but not who to vote for…we’ll get that from our friends on social media or general social contacts, if we need those at all to make up our minds.

The major dollars spent at the end of the campaign by the Romney campaign in print and television did very little to move the needle. By the time they ran, minds had already been made up. Words and print images are simply not as powerful and recent and visual images on the web or on television.

The Party Vs. The Campaign In this election cycle we were treated again to the real power of incumbency. Though many thought Obama carried a lot of negative baggage, and that incumbency in a poor economic climate would act as a drag, it did not turn out that way. As the incumbent, he was able to rebuild his election team from 2008, and take advantage of all of their previous experiences to come up with an even stronger campaign organization.

Romney was perceived to have been a great organizer, but it didn’t work out that way in this campaign. With a long primary, his team was late coming up to speed, and messaging and marketing continually ran behind. They also gave up the advantage when the Obama campaign was able to define them before they could build their own image.

Campaign Timing In past campaigns both sides usually started at roughly the same time, the incumbent having an advantage. In the current election cycle, the challengers were exceptionally late due to a long and contentious primary campaign. The party used to play a larger role in the overall campaign, but in recent campaigns it is the candidate who basically runs the entire show. Funding still comes from the party, but direct campaign funds and the direction of the campaign really are driven by the candidate.

I first saw this with Richard Nixon, who had the California campaign staff taking the lead and driving the campaign. This worked for most campaigns from Carter, the Bushes and Bill Clinton, but in this last cycle we saw the Chicago group take out the Boston group who struggled to mount the right campaign. They went to battle ill prepared for what was ahead, and the experienced crew out managed them. Future campaigns should take heed from this. Next time there will be no incumbent, but the team with the best plan, crew, message, and funding sources will likely win – all other politics aside. The same goes in business. Thinking you have the best ‘product’ will not trump the best marketing campaign, especially in a short ‘campaign’ with a finite deadline on election day.

Digital Donations The Romney strategy was based on large donations and the use of PACs to drive their message, and they did exceptionally well in this area, both in the primary and election campaigns. The money was flowing, but the results did not match the massive amounts spent, much of it too late to change minds already set by the other side.

The very large PAC infusion of money, much of it from just a small group of very wealthy donors did not accomplish the goal of total domination. In the end, the other guys had some strong PACs as well, but even more they discovered the power of small digital donations via text or emails. The power of small donations by the many, repeated several times by strong messaging did the trick. The key fact is that the masses that donated also took the time to vote in large numbers. The ‘engaged’ donor became the very engaged voter. For me that was the big win that I did not see coming, especially the size of total donations via this methodology.

Audiences and Precise Targeting In the world of direct mail the Republicans set the standard, and their lists were gold to the party. Election cycle after election cycle they yielded fantastic results. I’m sure they performed well this cycle as well, however, the Obama team who switched the ball game to heavy digital marketing outperformed them. Appeals went out on a nearly daily cycle; immediacy trumped the heavy mail package.

What we found out later is, that in this new 2012 cycle, the digital team advanced the art and science well beyond their initial efforts in the past cycle. Offers were tested, run, revamped – all within the span of a few hours, something impossible in direct mail. The single most interesting fact that I found out later were that nearly all of the appeals tested worked…they all worked. Message may be the key, but in this case it was more likely that methodology triumphed. For business, resisting digital and social marketing is at your peril. They must be a part of your mix in the future if you want to win the business in your daily marketing cycles.

Generations & Ethnicity…and Single Women Perhaps nothing explains the results of the 2012 election than the results shown by generations and ethnicity. They certainly skewed in both directions. But the bigger question is what this means to our electoral and business future. Targeted messaging is critical to identifying and supplying messaging to each audience. The days of mass marketing producing and mass result in the general marketplace are fast fading.

In future any marketer must target and message for their audiences, each with their own concerns and issues. Not only is the messaging variable, so is the media. Fewer of us subscribe to a daily paper. Confession here, as an old direct marketer and newspaper advertising executive, I used to subscribe to all the local papers on a daily basis. Now I have just one paper on Sunday, and the other for 4 days a week. All the rest of my news comes from the Internet via computer, iPad and iPhone. I also consume at least 3 times more total information as a result. For me, less is truly better.

For many, the iPhone, and other fully featured phones are now their prime communication vehicle and news source. Any business, or candidate, who does not take this into account, will not survive the next election cycle if they need that audience to win. As we saw the older audience does not use these tools as much now, but that audience is literally dying out. Not good ways to run a campaign in the future, if you want to have a future.

Single women also went heavily for Obama, married women more Romney. Messaging alone wouldn’t change the results here. It becomes a platform issue of what each party stands for. Is a party platform a key component of the message and do they need to be in synch. Much was made of the distinction in this case and through the Republicans courted single women, their overall message that was ‘heard’ was negative. Now we need to heed and message to gender, age, marital status, ethnicity and generational location as key factor in future campaigns. This is a very tough challenge for any marketer in business or politics and will determine the results of most future elections here.

Unforeseen Events Unforeseen events, like ‘Sandy’ will not be unforeseen in the future. What? I expect that future elections will forecast for every possible event and preparations will be at hand. Kind of like packing for a trip to Hawaii, but bring your snow skis anyway. With the outcome resting on any unforeseen event, they simply have to be built into our future radar. There is not time to regroup and react – bring the kitchen sink with you, we may need it will be the new motto.

Closing thoughts… Future elections, and future business will never be the same. Our digital and social tools have changed everything. I also expect this trend to continue as newer processes replace the old. Keepup, use the tools, or lose it all. No looking back now.

Big Data vs. Big Money…and the Winner Is?

Posted on December 13, 2012 by Lyn Bunch

Sometimes things don’t turn out the way everybody thought!

The election is over, and the team clothed in Blue won, and the margin was large. After such a contentious election cycle I’m sure all would agree -no more. The question that I raised in my last post on the eve of the election was “Will Nate Silver be a god or a goat?” Well we now know that he was spot on in his predictions for the outcome of the election with Obama winning nearly all of the contested states.

How did Nate Silver call the outcome? He did it by an algorithmic review of all polls (he does not conduct any polls of his own) weights the averages, and then forecasts the likelihood of winning the electoral votes in a given state. No punditry, shear match, some science, and enough sense to lower the values of what were the outlier polls like Gallup and Rasmussen that did not fit the general results of the other polls. Viola, we have a whole new way to pick the winner.

So, what happened to the Republicans, who were still forecasting victory right up to the last minute which gave us some memorable moments when Karl Rove had a meltdown on Fox, and Mitt Romney had to write a last minute speech that no one thought he would need since it was obvious to them that he was going to win…ouchers.

So this election came down to a couple of very big things – Big Money and Big Data. On the Big Data side the Democrats used all of the data tricks learned in the ‘08 election, and then brought in a number of new wrinkles. They built a large team in Chicago to manage the data, armies of staff and volunteers to use the data to blanket the targets with multiples of messages. No stone was unturned in reaching and motivating their target audiences. They had a mission and it was about turnout, and they did it, surpassing their efforts of 2008. I expect now that major elections in the future would be based on these efforts.

On the losing side, the focus had been on Big Money, mainly big donors who gave directly to the party, and to the Super Pacs. The Koch brothers and Sheldon Adelson were the big whales contributing an estimated 250 million between the two. These efforts were supposed to be all that was needed to blanket the airwaves with TV buys that would sway the election in their direction. In the past this has done it, and more money was spent – over a billion dollars in this heroic effort to carry the day.

The funny thing is that the Obama team also raised huge dollars – they also hit the billion-dollar mark, much by large donations, but a huge portion came from donations, mostly over the Internet. Their strategy was to go after small sums from a large pool, and then to hit them again and again. They test all kinds of messaging, and guess what, nearly all of the messaging worked – and the donations flowed. The public was really in the dark on the effectiveness of this effort until well after the election – certainly the Republicans were in the dark based on their surprised look at the end of the contest.

I’m not here today to talk politics – my interest lies in the technology and the application of the technology. I have friends, who are political consultants, and “I forgive them for that, they know not what they do.” My interest is in understanding how we best influence decisions, mainly commercial or business decisions through communications. Would the brute force application of traditional print and broadcast media work in todays world – certainly one side thought that it would. They were experts in direct mail fundraising with golden lists that delivered the manna in each election cycle. On the other side, with a new digital toolbox that worked last time, could it keep up with the promise of a sea of paid media that would not end? Could they do it again since the other side knew how they were going to proceed?

They did it again…and in my next post I will go into more detail on just how they did it and what this all means to us in our business practices. Big Data and the Digital World are real and anyone who does not utilize these tools in whole or in part will probably not make it until the next election cycle. More on Monday!

Driving a New Leadership Paradigm

Posted on October 5, 2012 by Lyn Bunch

Ursula Burns, CEO of Xerox

I was intrigued to see a number of articles recently in various media that all touched on some themes that I find are continually playing out in our new digital world. The trends mirror what I’ve been seeing with my clients as well, but these seem so stunning. What are they? In our change from a physical world to a digital and social one, we are seeing some of our premier companies making that transition under the leadership of women. Apparently there is no glass ceiling in the digital world, and as Martha would say…”that’s a good thing.”

Who are some of these leaders – the heads of IBM, Xerox, and HP. Some of the bluest of the ‘blue chip’ companies and all facing great challenges, and most are doing well…extremely well! I was taken by this trend because I started my career as a sales rep at Xerox in the early 70’s. Xerox then had just recently started then to hire women in the sales force. They were a novelty to most of the managers, all men, who wondered if they should treat them differently than men. Xerox had a culture very similar environment to my old fraternity house. Men got yelled at when they didn’t perform. Could they do the same with women. Could they take them into their offices and counsel then=m, with the door closed? What if they started to cry? The good news is that everyone learned and adapted quickly and within a short period of time, a couple of years, half of all hires were female, and many of the new managers were also women.

At IBM who we competed with in the copier marketplace we noticed a similar trend taking place and I knew a few of the early female sales managers, and they were great, and they prospered and grew quickly up the ranks as IBM was very interested an taking advantage of the new resource.

At HP, the course was a little different and men were still the dominant group and they intended to stay that way. I knew a number of HP managers later on in the 80’s and they still acknowledged that it was still mainly a man’s world. How the world has changed.

In these three organizations, leaders in their fields, are now headed by women, a fact a rarity in the corporate world of giant organizations. All of these women, and many others, too numerous to list here, have changed the paradigm forever. Now, a quick look at these three outstanding women.

At Xerox , Ursula Burns, is now the CEO. She started at Xerox as an intern, then an executive assistant and then succeeded Anne Mulchay in 2009. Now that is amazing, for a woman to succeed another woman in a technology company.

“I took over a company that was solid, but every day was becoming significantly less important in the minds of people,” Ms. Burns said.

This transition happened all while Xerox was moving from selling copiers to selling services and providing backoff support. A big change from 40 years of growth, but they are pulling it off. This is not something easy to pull off – “That transformation is earth-shattering for our company,” she said recently To cement it, Ms. Burns led Xerox’s $6.4 billion acquisition of Affiliated Computer Services in 2010.

“What we do well, unlike these really sexy companies like Googles or Apples that have these great things you can see and touch and feel, we actually work in the back office of large companies,” she said. “So most clients don’t really know we’re there.”

IBM built the computer industry, and dominated the word processing field when it was all about typewriters, and later copiers. Now computers are everywhere, but few are in the ‘clean rooms’ of old where IBM was the dominant player. They now exist on desks, the cloud, your pocket – they really are everywhere, and IBM is leading that charge to conquer the world of ‘big data’. This is now the third wave of computing they will discover and and learn on their own – just like “Watson” the supercomputer that conquered Jeopardy. We are now in the age of cognitive computing!

Virgiani Rometty, CEO, Chairwoman of IBM

Leading the charge as CEO and Chairman of the Board is Virginia Rometty who has spent her entire career at IBM. Under her watch IBM’s stock is now at its highest point in its history. IBM is now a consulting company and sifting through all of the ‘big data’ that is spewing forth all over the world. The key for IBM is constant reinvention. A good metaphor for all of us to keep in mind. Change is the new constant.

“Part of it is I get the honor of taking over a company that is a strong company,” she said.

But, she said, she knew she could not coast on their success, and instead charted a clear way forward, including work in cloud computing, analytics and growth markets.

“One of the great things I learned from Sam and Lou is no matter what, you always have to focus on reinvention,” Ms. Rometty said. “Never love something so much that you can’t let go of it.”

Meg Whitman, CEO of HP

Meg Whitman now CEO at Hewlett-Packard, is facing different challenges – survival. After a great career in consulting and early leadership at EBay where she cemented her reputation. Meg Whitman is now heading HP in trying to turn around a company that has suffered over the last several years of a revolving management team and rapidly changing focuses.

HP is struggling to find its focus in software and hardware and to become relevant in a word this is now incresingly mobile focuses and led by Apple and other tablet makers. After launching their own tablet in 2010 they quickly killed it…too soon many said. The current forecast is grim for 2013, and Meg is looking for enough time to turn this around.

Though Meg attempted a run in politics in California, losing to Jerry Brown, she maintains close ties to Mitt Romney. If HP doesn’t work out there could be something in Washington for Meg, if Mitt were to win. She is a continual winner, and given enough time, she will find a way to win.

Why are these women import to this narrative? We have entered a new era, and everything is different. Business is different. Old legacy businesses including all media is rapidly going digital. Mobile communications has changed how we communicate, and when we communicate. Barriers are being broken down that perpetuated the status quo. Through all of this we have discovered whole new ways of living and working, whether we want to or not there is no going back. Women are now fundamentally a part of business, and rightfully a part of management. We are all the better for all of these changes.

The Care and Feeding for The Orange County Register

Posted on August 1, 2012 by Lyn Bunch

OC Register Masthead from Peak Year 2005

Recently I wrote on the future of newspapers, something many of us with roots in the industry do as a daily pastime. In all of my research, I still think the models of the future that Alan Mutter of Newsosaur postulated for newspapers recently best portray a reasonable future as indicated by the paths many current papers are taking. Briefly they are:

Farm it – The Buffett Model. Buy and hold…and hope!

Feed It – Rupert Murdoch Model. Give the fire some fuel and oxygen and hope that it creates a sustainable blaze. After having split his media empire into digital and non-digital, this may be a real key for many to follow. Especially to those public companies that have to report their financials. Print is no longer a growing methodology, and as such, is dead to public companies as a forward-looking model. Even Harte-Hanks, who pioneered the advertising-only Pennysaver model to millions and millions of circulation, has seen the light and is reported to looking for buyers for their huge franchise. It can still generate some good cash flow, but looks horrible on quarterly 10K reports. “Time to set those doggies free” my buddy Bill would say.

Milk It – Newhouse Model. Why bother to feed the cow, just keep milking it for all you’ve got until it runs dry. Hope you don’t grab a bull…that could be bad. This is how those in the industry see most of the changes for newspapers, and what they see in New Orleans is not pleasing to the palate of the N.O. residents and readers.

My Experience there – I during the 90s I was in advertising director at The Orange County register. Those were truly the best of times, when newspapers were at their zenith, and competition kept us strong. It was fun to compete with The Los Angels Times, and to add a number of specialty products to our overall marketing mix. At one time, there were as many as 7 OC Register sales representatives who could be calling on any potential advertiser in Orange County. The favorite expression of senior management was quoted” time to impose our will”. Sadly, that was what we did with rates, and that was the beginning of a long downward slide for the Orange County Register, and a number of other newspapers that followed the strategy. Newspapers were still mini-monopolies, and the profits flowed.

Revenues peaked during the early part of the next decade encouraging the family ownership to seek an opportunity to cash out. They did and several of those in the family who took the buyout are still smiling today. Those family members who did not and stayed with freedom communications ultimately lost everything in the recent bankruptcy. In talking with some of the recent employees I hear and almost Universal joy and optimism based on their initial meetings with the new ownership group.

However, most also said it’s too soon to tell how things will actually shake out. They’re also saying that they think there will be a change in the editorial focus of the newspaper, and hoping to see a return to a more centrist albeit still Libertarian viewpoint of the paper. Over the last several years, under the new ownership and management, the paper had gone strongly to the right and far beyond the historical Libertarian viewpoints of the founding families. This was also not reflected in the larger viewpoint of a changing and dynamic Orange County, which is not the singular conservative bastion from the days of John Wayne. A strict editorial slant, either left or right is not a positive factor in the newspaper world that is searching for the largest audience possible, even the Hoiles family, had understood that factor and kept their politics in check.

Based on everything I have seen and heard I think it is still too soon to tell exactly which model the OC Register is likely to follow, though I think we can rule out the Newhouse – Milk It model. New ownership would not have invested to simply let it go without some kind of fight. New money in, especially from someone outside of the established print community as the new owners as probably signals they want to accomplish something, and also want a return on their investment dollars – something unique in print today.

That leaves Feed It or Farm It! Based on a strong foothold in Orange County we are still a highly desirable market that will rise again when housing takes off in the future. For now I’ll go with my heart in hand and say they will “Feed It” and try to do everything they can to build a strong multi-media franchise with the paper as the core product. This fits the community, and what I think is a great opportunity. They will not be able to impose their will, or dictate a political bent, but I think they can make small gobs of money, year after year if they play their cards right. I’m keeping my fingers crossed.

Not Dead Yet! Just a Little Diminished Around the Edges!

Posted on July 22, 2012 by Lyn Bunch

I love the scene in Monty Python and the Holy Grail, circa back in my callow youth, where they were collecting bodies from the ‘Black Death’. If they weren’t dead, a quick bonk to the head speeded up the process. I think in today’s media world we are seeing this played out over and over again. I confess I had bought into this talk, but I think there is still some life ‘in the old girl yet.’

What gives me hope is that baby whom cover the industry are starting to see the patterns that are evolving that show some various tracks key newspapers are taking to ensure their survivability. My favorite is from Alan Mutter of Newsosaur who in his recent article “What’s Next for Newspapers” highlighted three paths that could offer some hope for newspapers and newspaper staffs who are looking for some relief.

Alan’s three possible paths to the future he labels as: Farm It, Milk It and Feed It. He has plausible representations for each, and it makes for a great read. This has been made all the more urgent in trying to move towards a recognizable future for newspapers with the decision of Rupert Murdoch to split his media empire into two segments – print and everything else. That news was met with a round of – “it’s abut time” and the blessings of the market with an upturn. If anyone really understands the future of media it is Rupert Murdoch. Whatever sentiment he had for his holdings was dashed with cold water after the media circus in England that has stained his reputation. His head is now ruling his heart…and his pocketbook.

In the next post I’ll start reviewing these options, and perhaps have some additional ones to through on the discussion pile. Back soon…now for a viewing of Monty Python on my iPad ap. A great bargain for a few bucks, and a few moments with some lively songs and the Knights Who Say Nea always leaving me smiling.

The End of Newspapers…or a New Beginning?

Posted on June 16, 2012 by Lyn Bunch

The Orange County Register

With all of the discussions regarding the future of newspapers, and I am a big participant in those discussions, I found perhaps one of the best pieces by Matthew Ingram, yesterday in GigaOm – “The Hard Truth: Newspaper monopolies are gone forever.” This is one of the better pieces on what is getting to be a big discussion. This is almost as big a discussion as the state of the U.S. and world economy. There are lots of opinions, but not a lot of energy on what to do about it. Both seem to be heading on their own course, like a mighty river in a flood. Get out of the way and wait until it subsides. Truth is the newspaper business is subsiding, and now we are seeing the results.

…And the results aren’t pretty! Revenues, advertising revenues really, are in decline. Subscriptions are in decline. Page counts are down, and the news hole – real news, is down. Content is up, but we really don’t buy newspapers for content do we? The truth is, and Matt Ingram catches it well – newspapers succeeded because they were ‘the only game in town – monopolies who could charge whatever the market would stand.

Over the course of the next several days I will try to make sense of what I think all this means to the larger constituencies – readers, advertisers, and the general community. Can newspapers survive? Do we care? Are we worried about the loss, and how can it be replaced. Is it the loss of the daily paper, the habit we all grew up with, or is it the loss of real journalism – news we care about, and news that enlightened us that we fear losing?

I’ve been wrestling with this for a long time…and I need to get it out – for myself, and for my clients, many of whom come from the same generation and don’t like the changes they see coming.

Next post- from the home turf – The end of Freedom Communications and the OC Register, the Libertarian paper in a Libertarian/Republican county.

What Does Warren Know That We Don’t Know?

Posted on May 18, 2012 by Lyn Bunch

Warren Buffett - Now Loose with Open Check Book

Warren Buffett – The New ‘King of All Media

Warren is on the loose…again, and he brought his check book. What does the Oracle of Omaha know that the result of us don’t. For one thing he knows a great investment, and that means something he can own for a long time. That habit is not in vogue in todays fast trading world. Warren is looking to own assets that will appreciate over time, while bringing in some great cash flow, year in and year out. I remember those days, but then my idea of long range planning is “what are we going to do after lunch?” Warren is worried about the next decade, not what’s for lunch!

Warren, really Berkshire Hathaway, bought most of the print units of Media General, sans the Tampa Tribune, which will stand on its own for Media General, or until they find a way to sell it off as well. Media General got some great cash and a chance to stay alive for awhile, something many major media companies are trying to do. Warren got all of these holdings at a good price along with the real estate. The price is significantly lower than the multiples paid in the past decade when all of these media companies sold or recapitalized, and then the bust hit. Media companies can still make money, if they are not mired in debt – that is what Warren knows.

With our transition to a digital media world, in progress as we speak, there is still room for print media in local markets. I should qualify that and say ‘print’ is not really the operative word going forward, but news media leader in a local market with a print product is more to the point. As the ‘voice’ of the community – their earned mantle – they can be important and profitable businesses. Kind of like having gone through a takeover by a venture capital company. Make it leaner, and meaner and you can still make a buck. Lots of jobs will be shed, but then that is better than oblivion.

With this deal Mr. Buffett and Berkshire have seats at the table with Media General, as well as with The Washington Post Company, as well as a stake in The Buffalo News. He is quickly gaining influence throughout the industry by his unabashed belief in the continuing role of the newspaper in the community. He provides both financial and moral support to an industry in need of both, and at a very critical time. The biggest players like the New York Times, Washington Post and Wall St. Journal exist on a different plane. They are national papers of record that large audiences look to, their issues are different. Local and regional papers have different needs and Warren understands. With his purchases, not only does he have a seat at the table, but now he sits at the head of the table, and all eyes are on him.

Facebook is launching today what could be one of the truly huge IPOs with a value over $100B. FB is one of the contributing factors to the demise of newspaper readership. No they are not the main culprit, but more of a symptom of the decline of newspaper subscriptions. The newspaper was the watercolor content provider for social currency up through the last 10 years. If you wanted to be able to join the conversation at work, you read the newspaper. TV was also a source of conversation with your friends and co-workers. Now you keep in touch by digital means, texting and emailing…and the Facebook. Newspapers, in this new age, have lost a lot of their relevance of social currency. By the way it opened at $38 and has moved across $40 where it is as of this post. Oh for the days when newspaper sales attracted half of the attention of the FB IPO.

Warren understands that the local market is the last great place to have a real chance to still have an open forum in the community. There is still a chance in our ever growing social world that the local paper can have a real chance to drive that social discussion. As in the past, this is not about altruism, it is about having a good earning business. Newspapers will never command the high multiples when they are sold, because they will never be the monopolies of the past. With low debt and reduced operating costs newspapers can deliver a return that a ‘buy and hold’ kind of guy like Warren can appreciate. This strategy can be the one that can save local papers, and I don’t see much else that will.

Good luck Warren! We are all pulling for you and your strategy for the sake of our industry, and our communities. We’ll be waiting for more good news in the future. By the way how about some love for Orange County – The Register is available, and I hear the price is too good to pass up.

Warren Buffet – A Savior for Newspapers

Posted on May 7, 2012 by Lyn Bunch

“Warren Buffett Says He May Buy More”

by Peter Kafka in All Things Digital

Berkshire Hathaway’s Warren Buffett, who owns the Buffalo News, the Omaha World-Herald and a big chunk of the Washington Post, told shareholders today that he may buy more newspapers. “I think there is a future for newspapers that exist in an area where there is a sense of community,” he said. “I think the economics will be ok, but it will be nothing like the old days.”

If there is one man who can set the direction for newspapers it could be the Warren. He still sees the value because he see the total proposition, not just the bottom line. In many of the recent sales of newspapers this kind of logic has prevailed – as in San Diego, Philadelphia, and the potential of Eli Broad buying the Los Angeles Times. Money seeking influence. I think we have found our new business model. As the saying goes “Everything old is new again!

A Few Stamps Short of a Full Roll

Posted on November 28, 2011 by Lyn Bunch

Honoring our First Postmaster General, Ben Franklin

The battle goes on, for the life and soul of the United States Postal Service. Life and soul? Yeah, that’s what I think. We are at a cross roads to decide whether we will keep the USPS as we know it, or will cut it down to a botique service used for direct mailers and holiday cards.

I hate to sound so harsh, but I really think that we are at a point of no return. In all of our budget discussions, and the search for expenses that could be reduced, the long knives have come out against the USPS. I would not describe the USPS as the most efficient agency of the government, if there are any of those kinds of animals anyway, but they are important to us as a people and we shouldn’t be in such a hurry to solve the issue…right now.

Last Friday George Will waded into the fray will his piece on privatizing the USPS. A few of his thoughts from the right side of the argument:

“Today, the U.S. Postal Service, whose financial condition resembles that of the federal government, of which the USPS is another ailing appendage, is urging cancellation of Saturday deliveries, perhaps en route to three-days-a-week delivery. The USPS lost $5.1 billion in the latest fiscal year — after serious cost-cutting. Total 2012 losses may exceed $14 billion, a figure larger than the budgets of 35 states.

“The fact that delivering the mail is one of the very few things the federal government does that the Constitution specifically authorizes (Article I, Section 8: “The Congress shall have power to . . . establish post offices and post roads”) does not mean it must do it. Surely the government could cede this function to the private sector, which probably could have a satisfactory substitute system functioning quicker than you can say “FedEx,” “UPS” and “Wal-Mart.”

“The first two are good at delivering things; the third, supplemented by other ubiquitous retailers, could house post offices. All three are for-profit enterprises, so they have an incentive to practice bourgeois civility — to be helpful, even polite. These attributes are not always found at post offices.”

On the philosophical lefter side of the argument on the USPS, David Lazarus, my favorite gadfly columnist from the Los Angeles Times has also weighed in on the USPS situation. I’m going to quote him liberally here so we have a little fairness in the argument:

“Richard Maher can’t remember the last time he wrote a personal letter to anyone — and he works for the U.S. Postal Service. That’s how bad things have gotten for the government agency that, in the age of email, Facebook and Twitter, not to mention FedEx and United Parcel Service, announced last week that it lost $5.1 billion in the last year. And the losses would have been more than double that amount — a record $10.6 billion — if Congress hadn’t allowed the postal service to engage in a little creative bookkeeping and shift an outstanding $5.5-billion payment for retiree healthcare into the current fiscal year.”

Lazarus goes on to say…“As a newspaperman, I know a little something about antiquated business models. Simply put, the postal service can no longer raise the money it needs to do the job it’s required to do. Period. It just isn’t economically feasible.”

“A couple of years ago, after the postal service reported losing a mere $3.8 billion, I asked whether it was time to think about privatizing mail delivery. The problem with that idea quickly became apparent when both FedEx and UPS told me they weren’t interested in the job.

“While both companies might be interested in cherry-picking profitable urban routes, neither wanted the obligation of schlepping mail up and down backwater rural roads. We believe that the government plays a role in terms of ensuring that every mailbox is reached every day,” a UPS spokesman said. “That is not a responsibility that UPS would want.”

“Higher rates are obviously in the cards. A first-class stamp will cost 45 cents as of Jan. 22. Don’t be surprised if that charge quickly grows to 50 cents, or more. But higher fees alone won’t do the trick. That’s why the postal service has also proposed dropping Saturday delivery, closing processing centers nationwide and having the leeway to lay off tens of thousands of workers.”

“But I’d go a step further. Perhaps it’s time to do away with the postal service’s constitutional requirement for universal service. Perhaps it’s time to stop delivering to the sticks. I know, I know: heresy. But think about it. The real problem here is costly rural delivery. So instead of having the mail man (or woman) visit every home everywhere, how about we set a geographic boundary for home delivery at some point on the outskirts of every urban area?”

“Beyond that point, people’s mail would be delivered to the nearest post office, where you could pick it up at your convenience. Or you could authorize someone else to pick up your mail — the neighbor’s kid, say, riding his bike home from school. For more urgent deliveries, such as medicine or medical supplies, an opportunity would exist for local companies to establish services that would bring mail to people’s homes in a timely fashion. Such services could also address the needs of seniors who may not be able to get to the post office.”

For the last word on the issue let’s turn to the man at the top of the USPS. U.S. Postmaster General Patrick Donahoe said the two separate bills that have advanced in House and Senate committees “delay tough decisions” and “don’t come close” to giving the Postal Service the flexibility it needs to stem steep financial losses.

The Postal Service has offered a number of solutions, however not everyone agrees with them – mainly Congress, the Postal Unions, and major mailers. At a National Press Club luncheon, Mr. Donahoe said that neither of the two bills passed recently by House and Senate committees went far enough to help the post office achieve its goal of cutting $20 billion from its annual costs, which are now about $75 billion, by 2015.

Here’s the part that I love to hear, if I had it on tape I would play it over and over – Mr. Donahoe said “We’re in a deep financial crisis today because we have a business model that’s tied to the past,” he said. “We are expected to operate like a business, but don’t have the flexibility to do so. Our business model is fundamentally inflexible. It prevents the Postal Service from solving its problems.”

I think that opening up the discussion to admit that what we are doing today is not sacrosanct, carved in stone, patriotic, or whatever…it is really that the old business model doesn’t work today. Wow, so many buckets of ink have been spilled to get down to that point. If we accept that as fact, and I posit that we should then we need to come up with some answers for our future – for the USPS, its’ employees, its’ customers, both senders and receivers – and move forward.

I will be back soon to talk about all of the possible solutions from as many sources as I can find, top them off with me own – and then let this rest. Like David Lazarus, I’ve spent too many years in the industry not to care, but it is also obvious that the current model doesn’t work and must be changed.

Support Your Local Mail Carriers…Please!

Posted on November 10, 2011 by Lyn Bunch

Let me make one more point...!

In my search for updates on the current postal service issues I came across a new source of information – PostalReporter.com. This is a site maintained by the APWU, and I suppose other affiliated postal service unions and workers. A concise site for all things related to postal issues,especially postal worker issues it was informative and very direct in covering USPS issues today.

In the site I noticed that the USPS has been given until November 18^th to come up with a decision on how they will handle the payment to the Postal Pension account that they had earlier defaulted on. This was the default that set into play the whole mess of what to do with the USPS earlier this year.

After a lot of discussion, angry words on all sides we are now back to looking at the clock. Tic Toc, but the cupboard is still bare and no real decisions have been made. The USPS has requested making changes, but the approval to make them rest with the politicians. Now what?

One of the key leaders in the Congress actively working to help reshape the USPS is Senator Bernie Sanders of Vermont. He is quoted as saying…“It is time for the Postal Service to move into the future, to offer Internet service, printing service, and all the other services appropriate for the modern age which are financially viable.” He has offered his own version of a bill to help save the postal service. Others have done the same thing, but the big question is can they all come together in this politically charged environment to do something that is forward thinking? I hope so, but I have real doubts on anything substantive happening in the short term.

One of the things that had been recommended was to sell some of the surplus USPS real estate. Some is currently vacant, some was purchased in anticipation of future growth. Some facilities will be available if the USPS is allowed to close a large number of postal facilities – both processing centers and post offices. Again, this is all subject to political approval in Congress.

To help set this all in motion the USPS awarded CB Richard Ellis a contract in July 2011 to serve as its exclusive provider of strategic corporate real estate solutions nationally. “CB Richard Ellis will provide transaction management services for USPS, including leasing and disposition.” The website listing USPS properties for sale is operated by CB Richard Ellis Group.

After having watched the series of commercials sponsored by the postal workers unions I thought I had seen them all until yesterday when they came out with a new wrinkle. Cutting postal workers will cut veterans! I wasn’t aware that the USPS is one of the largest employers of veterans, and that there was a preference for hiring and retaining veterans since an act of Congress in 1944.

With all of our worries about getting people back to work and our desire to do well for veterans returning from duty in Iraq and Afghanistan it gave me pause, but then reality set it. We need to come up with the right focus for our postal system, staff it appropriately to meet our needs and move forward. This includes looking at the mandate that it should be self-supporting. I would be the first to say that the USPS should be cost-effective, but to be fully self-supporting I think is short sighted – and we need to apply long term vision for our future now.

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