Tag Archives: Newsapers

Print Media is Running Out of Time

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No More Time!

No More Time!

The transition from our legacy analog world of ink and paper is accelerating.  Major changes in newspapers over the last several years with revenues significantly down to levels not seen in 10 years.  Growth ceased, and status quo is hard to digest to those in the industry that used to grow by showing up.  Population growth meant circulation growth.  Those trends no longer exist, and print media outlets are starting to drop like flies. First it was newspapers, now the trend has extended to magazines and direct marketing publications.

In a recent Daily Beast article by Daniel Gross “Why Time Warner Felt It Had to Spin Off Magazine Unit Time Inc we see why this is happening.  Its all about stock prices.  This trend is now making its way felt through the entire communications field from newspapers, magazines and direct marketing publications.

 Newspapers were the first to feel the pinch of declining revenue.   The grind of producing, printing and delivering daily papers IS not easy, and its expensive to do it every day, especially on those days when the paper is not full of ads.  Recent changes in newspaper ownership around the county brought some promise of hope when heavy hitters like Warren Buffett bought in and gave some hope to other owners that were still viable.  But Warren likes to buy and hold, and he likes to buy things he knows a lot about – and HE still reads his paper daily.  Not everyone agrees with Warren, nor do they all have his deeps pockets.

Even with his very deep pockets Rupert Murdoch owns bunches of papers in the US and in Australia and England, but Rupert also owns lots of digital media in those markets as well.  He also sees the enduring value in the print, but he was one of the first to see that revenues were lagging in print, and those lagging revenues reflected poorly on the ability for the overall stock value of these publicly traded companies to grow.  He has lead the move to split his holdings into discrete segments – digital on one side and print media on the other.  Future dollars for investment and growth are attached to the digital side, and print you’re now on your own now.

Recently Time Warner felt the urge to ‘unmerge’ its holding and to spin off its magazine unit, including Time, Fortune, Money and Sports Illustrated and make them a new stand alone organization and take them public as their own group.   The magazines are still profitable, but they cannot keep with the market and are thus a drag on corporate earnings.

Harte-Hanks, Inc. originally started off as group of small Texas newspapers, but chose a different way to grow outside of newspapers and moved into direct marketing, and over 20 years sold off all other holdings, including all of their newspapers and became a powerhouse in shoppers publications covering millions of households in California and Florida.  A still thriving industry for small communities covering a market just below that of the newspaper they provided cost effective targeted advertising and in the process stole market share from larger local newspapers.  Those golden days are now over.  Having written down all of their goodwill equity in the declining value of The Pennysaver, they were able to unload them quickly.

In December the Florida operations were sold back to their founder Dick Mandt, a former boss of mine, and his team of highly effective industry managers.  Were they losing money -no, but they had to go.  Sources tell me that the same thing is likely in California where the original Pennysaver circulates.  Staff cuts are being made, offices are closing, and they appear to be on the same trajectory as Florida.  Can they still make money – yes.  But they can’t grow in the manner that a public company needs them to.

Like Time, Inc., Harte-Hanks, is a publicly traded company and must show growth.  The huge revenue base of the Pennysaver could not keep up the growth curve for Harte-Hanks and stock prices lagged. Decision time came, and decisions were made.  Heads rolled, and the new management staff has a mandate for growth, and a tight timeline.  This is the new story for print and direct marketing, especially for those mailed publications.  If you are on the big march and you fail to keep up – we’ll leave you a canteen of water, and a couple of biscuits, but your on your own.  Tough love, I think we call it!  Time is not always on our side.

Integrated Marketing – an Imperative for Success Today

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The Wheel of Marketing Choices

The integrated imperative!  That’s where marketing is today.  Heed the headline, or perish. There really aren’t any options.  Over the last several years my clients and I have noticed that marketing has gotten harder to do well, we had fewer choices and those produced good results.  There are more marketing choices, channels and media options than we thought possible just a few years ago.  Choosing wisely and making it work across channels and markets – integration, is what it really driving our marketing world today…and to do it well is hard!

On May 10, Steve McKee, in Business Week, authored the article “Integrated Marketing: If You Knew It, You’d Do It”  He starts with the opening paragraph – If it ain’t broke, don’t fix it, is such a cliché that it has spawned its own cliché: If it ain’t broke, break it. Unfortunately, that’s just what many companies do unwittingly to their branding programs, playing into the hands of public enemy No. 1 in today’s marketing environment: Fragmentation.

The rest of the article made the case for integrating the marketing, mainly keeping a consistency of messaging across multiple platforms we all endure today.  It is a delightful read, and one that many of his readers commented on in a favorable manner.  For the most part I agree, but the key message he iterates is ‘integrated marketing is hard!’  Yes it is, and this is why so few are able to do it well, if at all.

The boomer generation grew up with tightly bracketed marketing channels.  You bought the best and then hoped for good results.  The good news is that your audience had fewer choices and they were generally on the receiving end – be it newspapers, television, radio or out of home.

That world doesn’t exist today, and everything is hard.  So many choices, and so many places for your audience to be hiding.  The digital world is wonderful with all of its options on both sides, but for the marketer it is tough to juggle all those balls.  Three key channel options for most, have now turned into 8 to 12.  On top of that it is now ‘social’ so your audience can talk back to you…and you better be listening, because they’ll carve you up if you aren’t.  Trust me, I have, and they have left scars for not listening and not responding fast enough.

The McKee article is a good read, and I implore you to look at it.  You should also read the reader comments which come mainly from industry participants, who mostly agree, but they also have their particular bents.  They are in agreement that ‘integrated marketing is hard.’  Yes it is, but there is no choice.  The world we knew was broken, and there is no going back.  Multiple channels, both analog and digital need to be attended to and used appropriately to reach your target ‘audiences’ (emphasis on the plural) if you are to survive.

Many of my clients have long histories, they love their new options, but still talk about how it ‘used to be.’  We commiserate, have a cup of coffee, and then get on with reality and plan how to cover their broad patch of media options.  All of this with careful attention to keeping the message consistent and true to each channel of their multi-faceted customer and target base.  It takes more time, and more money, but it produces better results.  Isn’t that what we are all looking for?  It’s a new world, and I love it!

A Death by Inches for Newspapers

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Sometimes you see a chart that stops you dead in your tracks.  I saw one today in The Atlantic that graphically displayed growing and shrinking industries.  My sons both inhabit the top-growing field of the Internet…and I, still have my past linked to the bottom industry – Newspapers.  Ouch!

This is a great chart because it shows growth and size of the industry losses or gains in terms lost at a single glance.  I hope we can see more of these from the suppliers – LinkedIn Analytics.

As I deal with clients and prospects this will be part of my kit bag to help explain key opportunities, and the pockets of pain at the same time.  This is why the recession has been both so deep, and so persistent.  As employment shifts from the old sources to the high growth areas it is easy to see that needed skill sets must be transformed or much of the pain for those who have lost jobs will find it to be permanent.

No More “Kodak Moments”

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There are those things that are touch points to our past.  This was a big week for key events that highlight how far and fast we have gone over the last several years.  Growing up with a Brownie camera and Kodak film I was the model of American youth.  The advertising phrase – ‘ A Kodak Moment’ was the catch phrase for time to store a happy memory that only film could do.  Movies had many scenes of hapless dads and moms trying to capture their ‘Kodak moment’ while their kids were going crazy to get out of the scene.  While working at Disneyland in college there were signs at various locations that encouraged people to take advantage of a Kodak Vantage Point with a sign in Kodak yellow.  Kodak film was sold on Main Street and shops all over the park.

A logo soon to die - KodakThis week we got the news that Kodak, now in bankruptcy for reorganization, was going to drop most of their last links to photography.  This is a sad story, and one we have seen repeated many time over in our ‘ industrial digital transition.’  Old services, products and companies are in decline as our economy, and lives, are changing in this new ‘digital’ world.  Yesterday’s business leaders are tomorrows canon fodder…do they still ‘make’ canon fodder?’

The shame for Kodak is that it saw it coming and did not take the steps needed to survive.  They saw the digital revolution in photography early on, and made some minor adjustments, but in the end the effort was staged to protect their lucrative film business, even when the ‘digital barbarians’ were at the gates.

What will Kodak do now?  Their next phase, if they can survive the bankruptcy courts, will be to continue as a provider to online and retail photo printing services – like Costco, where I get my prints done.  They will also continue in the desktop printer arena, but with heavy competition from HP, Canon and others.  Selling printer paper is also a key factor, but that is a commodity business, and margins are shrinking there as well.

What does the Kodak transition mean for us?  I guess we have great role model for change – or at least what happens when you fail to adapt or change.  Strong brands with years of earned equity in their brand can flame out just as easily as the next brand.  Twinkies and Ding Dongs are still trying to find a new home since their founding baker has faltered.

Kodak shows us that the allure of circling the wagons and protecting the flanks because of high margins for existing core businesses will not work in this new world.  Being both ‘digital and flat’ will be the keys to new high margins.  Kodak saw the light coming down the tunnel and didn’t think it was a train.  Everyone should be alert for their own ‘trains’ being aimed at them now.

My own experience in marketing and advertising has been in the publishing field – newspapers and shoppers, and in the direct marketing – mail.  Think I don’t know the numbers and schedules of all the trains coming down the track – I do now.

My clients, mostly those with strong roots in the pre-digital world, are learning and alert to the transition.  However, the force is strong with those who want to protect what they have built up, and that causes many to falter and lose sight of the pending changes.  Now is the time for reinvention, for all of us.  No more ‘Kodak moments’ will be coming, at least for Kodak in coming months.

Groupon CEO Survives Digital Suicide on 60 Minutes

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Last week Andrew Mason, the 31-year-old CEO of newly public Groupon conducted an interview with Leslie Stahl of 60 Minutes.  I was excited to get to see for myself just how crazy this newly minted multimillionaire could show himself.  Groupon is know for its wild culture, and Andy did not disappoint.  The words, the look and the attitude were just what I was expecting.  Lesley, to her credit, seemed taken back, not that she hasn’t interviewed a number of crazies over the years, but this was a masterpiece of craziness.

Crazy how?  Crazy in that Groupon continues to struggle to achieve real relevance since going public.  As the biggest tech IPO in some time it was to be a real bellwether of things to come for others seeking to go public.  The price was set relatively high at $20 per share, and it hit the mid-thirties in the first day, but then retreated.  The bloom quickly faded from the rose and it continued to slog along in the low 20’s, sometimes dipping below.

One thing for sure Mason was still high on the ‘juice’ of their success, though smarting from the comedown of having to restate their earnings.  They had forgotten to include things like ‘sales expenses’ that included the returns back to the advertisers after sales had been booked.  Ouch!

Started in 2008, Groupon was one of the few businesses that actually took advantage of the economic downturn.  Blessed with a large pool of available talent, many recently displaced from their current jobs, they were able to build a solid team to blanket the market with a novel concept.  Pay nothing up front, get a lot of customers in your doors, and get around 50% back when the customers pay Groupon.  Groupon gets all of the money upfront, and the clients have to collect from Groupon.

In the existing advertising world a number of clients have tried to negotiate these deals with newspapers and others, but this was generally for remnants that the newspaper knew would go unsold anyway.  This did not happen often, though more today, and Groupon created a new model for the financial transaction.  Would it work?  Yes, but there are catches.  This is built on the model of getting new customers, and the goal of building loyal customers.  This has been the real sore point from my research with a number of Groupon advertisers.

Most of the Groupon advertisers have found that redeemers of Groupon offers are not returners later.  Having found one deal they get hooked, and then search for the next deal.  Others have found the process somewhat confusing and hard to understand and are not flocking back for more of the same medicine.  The last factor is the holdouts that have not jumped on the bandwagon for ‘daily deals’.  This is the sector that, in the tight economy, has shut down their discretionary spending.  They are not enticed to buy something they didn’t really need just because it was 50% off.  Tight times mean tight wallets for many, and enticing offers just won’t work well with this group.

What does this mean for Groupon?  Groupon will continue, and will continue to produce some great results for some types of businesses.  For many though they will burn and churn through a number of clients who will never do a Groupon deal again.  Competition will continue to grow, why because the barrier to entry is low.  Existing forms of advertising will also offer daily deals, most already have just on that bandwagon.  The churn and the increased competition will make it hard for Groupon to be the 800 lb gorilla many had thought.

What does this all mean?  Groupon will continue, but it will not become the growth stock many had hoped.  Those who bought the initial offering will come out ok, but those who bought in the 30’s will never recoup their full investment.  This could change if Groupon evolves beyond its existing concept, demonstrates solid growth, and solid customer retention through great sales results at the advertiser level.

I wouldn’t bet on it.  I also don’t believe that monkeys can fly, even if Andrew Mason thinks they can.  Time for Andrew to grow up, put on a tie and be responsible.  I’ll be reading the results weekly to see how it goes.  And regarding the interview?  It was classified as a PR nightmare the next day.  The stock price went up for a couple of days and then declined back to around 20 again.  I guess that proves the old adage – ‘buy on the bad news, and sell on the good news.’  It’s Monday, and the price remains about the same.  Put on the tie Mr. Mason!

Stadiums Yes!, Beaches No!

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Proposed Farmer Field Stadium for Los Angeles

Is this in our future?

I was amused to read the article in the recent Los Angeles Times–” Coastal cities will sponsors: make our beach your sandwich board”.  Boy did that bring back memories for me.  For several years, beginning in 1999, I led a start-up in Southern California that offered advertising on local government vehicles. This was a fun venture for several years, but then the fun for me left of the business. It appears from the comments in the articles that little have changed since that time. Local governments are still looking for new revenue sources, but are not willing to give enough value to attract advertisers who have more attractive ways to reach their audiences.

Beginning in the late 90s, and continuing through the early years, municipal corporate advertising was in its heyday. By the mid-“ought” years the bloom had come off the rose. The hard fought battle to gain acceptance have led to some significant revenue streams. However, it was then that the impact began to be felt from the growing Internet advertising. We could see that the trend would gobble up much of the hard fought growth that had been expensive to win.

The real trend in municipal advertising has come from larger sponsorships mostly to stadium advertising. This is where the big bucks are.  A few dollars have been left over from corporate budgets that have leaked into municipal advertising programs. My experience in the early years of municipal advertising showed me that the concept was viable, and rewarding, but in the long term most programs would not be sustainable. Why? The reality that I found, and others in the same field found, was that the returns for advertisers was not at the level of their expectations. High client churn, meant high sales costs. Within a short period of time, usually within 2 years, the programs started to decline.

Advertising and government places can work, however the price generally doesn’t match the value received and the grief rendered. My experience, and those of other compatriots working in the field at that time, showed that working with the government agencies was costly, time-consuming, and unfulfilling. The dollars earned simply did not match the effort and as such made the venture non-sustainable.  This can work for both sides, if and when, the value ratio can meet expectations of both sides

Digital Media on the Move…Newspapers in Retrograde

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This is a very tough environment for newspapers, and one that does not look to be brightening any time soon.  A lingering recession level of spending and generational and lifestyle changing trends point to a dismal future for any newspapers looking for a resurgence to past days of glory.

Not only is the economy one of the toughest environments that any of us has lived through, it has also drained advertising dollars from established print media and shifted it into digital media.  Talk about taking a barrage of blows to the head and body, this is today’s environment

With that as a backdrop for today’s comments we also have self inflicted news that tells us that ‘they can’t really be serious can they?’ It was reported that Gannett’s CEO of the last six years, Craig A. Dubow, received a parting gift of  – $37M in bonus and retirement benefits.  During his period of leadership the company’s stock declined from a high of $75 a share to just$10. Unfortunately, there are a number of other CEOs who have gotten similar treatment after miserable leadership terms.  Theirs has been the one bright story of the last decade for newspapers.

Aside from the economy the trend to digital news has also accelerated the down trend for newspapers.Now they are banking on some new trends to help rescue them, before the companies run out of money to help cover their severance as they head off to happier pastures.

The iPad has helped drive this new shift, and now the Newstand app recently added to iOS5 on Apple mobile applications appears to be working as well.  The new native app works especially well for magazines, and The Daily, the first iPad only news product from Murdoch Inc.  Conde Nast is reporting a 268% increase in digital subscriptions since Newstand was announced. Still a bit of a stretch a newspapers work through their own versions of apps for both phones as well as tablets.  In some cases they are developing their own tablets in conjunction with manufacturers.

A recent Pew study as noted in a recent Newsosaur article on tablet owners shows that only 14% had subscribed to a paid news app.  Also that only 21% say they would be willing to subscribe if the price was below $5 per month.  83% also said that being free or low cost was a major factor in their decision about what to download.  One good factor for digital users and providers of digital content, including our major ’newspapers’  shows that 43% of respondents said they now spend more time consuming news than before they bought their tablets.

I’ll take that as good news, and it certainly mirrors my own habits.  I’ve been excited to see just how much content I can get for free, but have also found that there is some content I am now willing to pay for, I’ve moved across the aisle and am a willing participant of paid digital content.

The other good piece of news about the ’43 percenters’ is that they too will make the change since their really won’t be as much available on the free channels in the future…unless you go ‘full social’ and get all of your news from your ‘friends.’  I’m not ready to do that yet…and doubt I ever will.  You would know what I mean if you could see some of them.

Pew study as noted in a recent Newsosaur article on a recent Pew study that only 14% had subscribed to a paid news app,  Only 21% say they would be willing to subscribe if the price was below $5 per month.  83% said that being free or low cost was a major factor in their decision about what to download.  43% of respondents said they now spend more time consuming news than before they bought their tablets.

Helping to drive the trend to digital deliver of news is  the development and testing going on for a wide array of tablets being developed directly for major newspapers, including the Tribune group and the Philadelphia newspapers.  No final details have emerged, but it appears that they will be available for subscribers.

It was reported, perhaps by union insiders, that in the recent negotiations for a new contract for the paper’s print unions that they were offered a shorter 3 year contract, and that they were lead to believe that the paper had plans to stop printing by that time.

Now we can see what the future really looks like.  As a former newspaper ‘insider’ I know what it costs to print and deliver the papers daily, and a digital only world would be a less costly one for sure.  Too bad digital ad rates are lower that print ones, but that too could change when print fades away.

Another accelerator in our switch to digital comes from Amazon.  With it’s very small price tag the Amazon Fire which is to be shipped on November 15th could have a great impact on the digital distribution of print and magazines along with a host of other digital media including video and audio.  I know that my son has one ordered for his wife and/or his one-year old daughter, and I will order one for my wife as well if they check out as OK.  If not, then they both will have to settle for an iPad.  Life is tough that way.

Like the Los Angeles Newsgroup here in So Cal, Cox Media has adopted a similar shared editorial program.  This means that the editorial and news staffs are shared, reducing costs for the newspapers. In Los Angeles this appeared to be a big deal with a broad range of papers with distinct markets sharing news staffs.  In the case of Cox it will mean the sharing of staffs from Florida, Atlanta and Texas.  We’ve come to accept the downgrading of the news content on a local basis, since most of the papers involved were 2nd tier any way, but I don’t know that Atlanta and Austin will accept it without a lot of belly aching.  I don’t know about Atlanta, but I bet some larger than life Texas oilman would consider starting his own newspaper in Austin if they felt slighted.  Texas takes this stuff seriously…just like their BBQ.

Back to Southern California!  The So Cal newspaper marketplace continues to stumble forward with few positive signs of positive growth.  The biggest question mark concerns the Orange County Register which is still up for sale.  Some past bidding pitted the Los Angles Times vs the Los Angeles Newsgroup in a potential bidding war…but no winners emerged with both large newspaper groups mired in their own financial problems.

I don’t see any big hitters with deep pockets willing to step forward and take over The Register here.  Texas still has oil, but our key drivers in OC have been homebuilders…and they can’t even afford to take over each other for now.  Who knows what the future will bring, but nothing big on the horizon now for our local media.  We shall slog on with the media who ‘brung us here for now!’

A ‘Little’ Good News for Newspapers?

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There’s good news, and there’s bad news.  Which do you want first.  Take your medicine up front?  Ok here is the bad news.  The circulation of the top 25 newspapers is down again according to the Audit Bureau of Circulation.  The good news, please – it’s not down as much as last year.  Our long nightmare is over…not quite yet.

Two papers, The Wall Street Journal and The Dallas Morning News were both up slightly.  The totals for the top 25 papers are here. My paper of choice in Southern California, The Los Angeles Times was down 8% and it’s Tribune sister The Chicago Tribune  was down 4%.

What does this mean for the newspaper industry – continued tough times.  There does not appear to be any upward tides that will carry them back to their glory days.  Aging demographics of their subscribers, the loss of classified revenues, and the growth of digital advertising are working their charms against them.

The key factor running against newspapers is the fact that they are no longer the monopoly for news and advertising in their markets.  They are still incredibly useful to their audiences, but the high margins of the past will never return.  They are adding services including some very robust digital advertising programs, but not at the same margins.

In my conversations with my old associates at newspapers I find they are soldiering on as best they can, and introducing a number of innovative ways to increase their revenues.  There are many great successes, but just not enough to make the hole smaller in their revenue buckets.  Like many businesses in this new digital age newspapers are finding the going tough, but there are still many tough people working there.  I’m betting that they will find some answers.  If they were racehorses I might take out a bet on a race for sport, but I would not buy the horse.  Time to find a new track to run on.  Let’s see what that Dallas Morning News nag did to run ahead of the rest of pack.  We know the WSJ was juiced by Rupert, so no looking there.

Mickey Mouse to Lead LA Times ?

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Our long ordeal is nearly over!  It appears that a change is coming to the leadership of the Tribune Company, and it could not come soon enough.  Having endured the Zell years I can say that they were truly awful.  A once great company and key newspapers in Chicago and Los Angeles were turned into rubble.  The purchase of  Tribune, mainly for the real estate – both buildings and Wrigley Field, bought at the height of the valuations for papers, went terribly wrong.

The final resolution has been going on for an extended period and mainly pits groupings of creditors against one another for the best settlement.  The major creditors lead by Angelo, Gordon & Co. and Oaktree Capital Management as well as the ever present JP Morgan Chase are in the driving seat with $8.6 billion in claims.  Many of the smaller creditors are not in agreement with the proposed settlement and have been successful in holding things up.

The key news that came out today is that Michael Eisner, formerly head of Disney is among the group being interviewed as the Chairman of Tribune.  Zell is to be gone, long live the Zell.  Hard to think of Mickey Mouse now leading my dear Los Angeles Times.  Not since Ron Burkle and Jon Peters tried to buy it before Zell.  Wow, I’ll have a comb out and blow dry with my box of Cheerios please!

Eisner could be the leader of a very well traveled group of former senior leaders I won’t bore you with – cause they bore the heck out of me.  One interesting choice also mentioned is Michael Wolff, founder of Newser, the online quick news site and writer for Vanity Fair magazine.  Michael also is close to Rupert Murdoch, having written a biography on him – wouldn’t that make a nice pairing for the future?

I’ll wait here in my bubble for further breaking news on who will be the winner, and who will get tagged to lead Tribune.  This should be really interesting, especially to see what ideas they come up with to payoff the debt to all of the creditors who are still licking their lips in anticipation of a change at the top.