Fourth quarter, credit crises and more bad news

The circulation figures of the USA newspapers show a decline of almost 5% in 2008 compared to the first six months in 2007. Only USA Today and The Wall Street Journal remained almost unchanged. The decline coincides with news about lay offs of newsroom staff, closing down of newspapers, increased use of e-books announced at the Frankfurter Buchmesse and the deal Google made over the digitisation of libraries worldwide.

The news gathering and news dissemination is at stake. Customers still read the news, but more do so online, and (almost all) for free. Advertising revenues for the printed newspaper decline as fast as the Dow Jones, so how to pay the news makers. A new business model is required, soon.

Traditional and new media winners in Brussels

Today I went to the award ceremony of the Enterprise of the Year of Ernst & Young. The winner of this award and of the Flemish award for the most talented company proved to be two antipoles: CartaMundi was the winner of the serious Enterprise of the Year award and Netlog was chosen the most talented company. CartaMundi is a world leader in the production of all kinds of playing cards, cards used in Las Vegas or Pokemon cards collected by kids. Netlog is the Belgian-based European leader in social networking. Both represent social networking: the traditional and the new way. Social networking for the digital immigrants and for digital natives.

Use less paper - by Xerox

Yesterday Xerox Belgium organised an event titled Paperless Attitude. Almost 400 people representing end users, printers, creative people and service providers attended the session. Xerox presented various ways how their machines can help to manage paper use and paper flows. Pierre Collette, head of communications, told his audience that 80% of all printed documents have a life time of less than 24 hours! Being more conscious about the use of paper should therefore certainly be on everybody's agenda. But a lot more needs to be done to achieve this paperless attitude.

Future of print media perspective

Last week I presented a Future Perspective on Print Media to a group of Dutch advertising and graphic professionals, all of them clients of Spijker and Scaldia. As always happens with this presentation there was a lot of interaction and discussion. On one point we all agreed: innovation is key for print media to maintain its current position. The Esquire cover was seen as an innovation and a way for magazines to attract readers. When magazines do so these impressive machines can continue producing fine paper.

Newspaper sales in perspective

Erwin Busselot from Kodak forwarded me a slide that puts the news (see post of September 7) about declining sales of newspapers in more perspective. This slide - although from 2007 - shows the difference in evolution between the continents.


Ww Np Sales

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Magazines offense

This week marks the Magazine Week in the UK featuring a "buy one, get one half price" promotion, a poll on Britain's favourite cover and various promotional activities in retail stores. The theme of the PPA is "Indulge your passion.. try another magazine today". For the advertisers and media agency there are plenty of facts that support the strong position of magazines: consumers spend ₤ 2 billion on magazines each year, more of the internet generation read consumer magazines than any other age group, average reading time of a magazine is 50 min. and a magazine is picked up 5.4 times before it is finished with. I'm wondering whether the consumer and b2b sides of this campaign are compelling and unique enough to be convincing.
In the US the Magazine Publishers of America (MPA) also launched a B2B campaign titled "Under the influence of magazines". This campaign consists of magazine ads, online ads and a website and is directed at the marketers and advertising agency industry. Key message is the sales impact magazines have. A separate website covers the research that supports this claim. The US magazine market also shows a decline in the number of ads placed. Over the first half of 2008 the decline was 7.4%. The initiative comes just a couple of days prior the the annual magazine conference titled Unleash the Power.
Claiming results to sell media space is also the message of online advertising and was the message of TV advertising. Despite the convincing facts it remains uncertain whether magazines will become HOT again among planners and advertisers thanks to this $ 1 million campaign.

Mythbusters

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Audi again winner of Euro Effie and Sappi Award

This week I went to the Euro Effie awards in Brussels. At a ceremony that was not as well organised as other years, Audi was again awarded with the Sappi Print Media Efficiency Award. The company introduced the highly successful R8 model with an integrated campaign consisting of approximately 45% print media. Audi used magazines, newspapers, outdoor posters, direct mail and POS material in conjunction with a dedicated website and television. The campaign made the R8 the most desirable sportscar in Europe and almost closed the gap in new car registrations with the longstanding No.1 sportscar Porsche. With these results the campaign also won a Bronze Euro Effie. Grey EMEA was for the fourth time in a row awarded Agency of the Year. This year thanks to Effies for P&G, GlaxoSmithKline and Coca Cola. Carolyne Carter and her men were exhilarated.

Esquire uses e-ink for spectacular anniversary issue

To commemorate Esquire's 75 anniversary the magazine has published a limited edition October issue using so-called electronic ink on the cover. This allows moving words and flashing images on the cover. The technology behind this remarkable cover is a thin sheet with electronics, fueled by a battery, that bends with the cover. Esquire mentions in an article in the magazine that it took them more than a year of serious development and innovations in the production of the magazine. In the meantime it invites hackers to work with the electronics. Ford's advertisement at the inside cover also uses the e-ink to make the car reflecting the street lights. As the magazine is produced at limited quantities the collectors value is big, eBay prices range from $14,99 to $99,99 for a single copy. (I've ordered mine with a good friend in New York).

Sustainable print

A dedicated report on the most important issues related to sustainability of the paper industry was published this week by the Print City Alliance. The report, "Sustainability, Energy & Environment", covers subjects such as the printed ecosystem, greenhouse gases, energy efficiency and the Kyoto norms. Print City is a strategic Alliance that shares worldwide expertise in the graphics arts industry. The report can be obtained for free via Print City shop.

"TV advertising cheaper than at any point in 20 years"

This is a quote from Screen Digest, a media analysts company covering global media developments. Their perspective of television advertising expenditures is negative: although TV audiences are still growing, revenues are falling because demand is flat. ITV in the UK and TF1 in France are projecting a 3% drop in revenues for this year, and also Spanish broadcasters Telecinco and Antena3 show a sharp decline. Screen Digest is expecting this month to show the strong effects of the recession.
With all the research available on the lack of attention to television advertising, it is still striking to notice that marketers continue to invest in a medium that has lost its original impact.

Confirming the bad news about newspapers

I saw a graph in Wired confirming what so many analysts have already been suggesting: the collapse of newspaper advertising revenues in the USA. The Newspaper Association of America presented figures that indicate a loss of $3 billion (- 14%) of ad expenditures during the first six months of 2008. Total revenues for 2008 are expected to be below $ 40 billion, which is the lowest level in 12 years. Also online expenditures were down: - 2,3% in the second quarter, but showed an increase of 2.3% over the first six months.
(Chart: Alan Mutter)

CMO's promote IOD's (?)

New words and acronyms are regularly added to our marketing jargon: individualised offer delivery (IOD) is one of the latest. This term is used to refer to Transpromo; the integration of promotional offers on statements and bills. In the USA, Transpromo is getting a lot of attention from various parties. However it requires a serious investigation of organisational structures, IT structures, costs of accounting and marketing workflows. Because of the impact of Transpromo the US-based Chief Marketing Officer (CMO) Council has launched an initiative to identify best practices called Precision Promotion: Timely, Targeted and Trackable.
I'm currently involved in a project on Transpromo and experience that this initiative is exactly what is required. This is the first time I read about a marketing organisation investigating and promoting the use a specific marketing communication tool. A truly great initiative.
Introducing Transpromo will not happen on a managers level, it will need full support from the top of that organisation. CMO Council represents global operating companies like AT&T, Google, CSC, Boston Consulting Group and others with a total membership of 3.500 in 52 countries. The Precision Promotion initiative from CMO Council is sponsored by a major supplier - Infoprint Solutions Ricoh | IBM - and plans to present at the CMO Summit in December a report on the results of a 25-point marketing audit.

Selling Magazines

I invited Thomas Stickelmaier from Time Magazine to present the recent Magazine Experience survey to Sappi Europe. Although the presentation provides many convincing arguments to continue using magazines in the media mix, the presentation felt short of assuring the audience of the future of magazines. The presentation did not provide an unbiased view of magazines nor did it provide further details on -for example- the role of magazines for younger readers. I believe that promoting the use of print media will only be successful when an objective view is provided, including shortcomings of print media. Below you can view the European and the US survey.

Time Magazine Experiences

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Time Magazine Experiences Usa 2007

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Red Dot Award

I went through the results of these design awards, and found some beautifully designed ads. Like this one for Oryza rice, using an intriguing landscape to communicate rice recipes. The Suddeutsche Zeitung, uses the analogy of tree rings to refer to the year-in-review issue.

The humble role of advertising?

I sat in a presentation some weeks ago about the effectiveness of newspapers. InBev, BrandScience and Nielsen presented their findings on the ROI of newspaper advertising. All of them used econometric models to demonstrate the value of newspapers (otherwise they would not have been invited to do their presentation). The presentation pointed out some stimulating data. BrandScience used a database of 200 cases including newspaper campaigns, the average Revenue Return on Investment ranked as follows: inserts topped the list followed by newspapers, magazines, radio, online, direct mail, outdoor, television sponsorship and television.
A case study on the support for the Jupiler Blue brand showed also the superior ROI of the combination of newspaper and outdoor advertising. The result mentioned a poor 8,8 % - 9,8% contribution of advertising to total sales of the brand.
In driving back to the office I thought about two things: one, where does the creativity of the ads gets into the equation? What is the role of the Cannes Advertising Festival and all other creativity awards, when everything can be modelled without taking into account creativity. In a world of product parity, creativity and design can call for premium prices and consumer interest. And two, when advertising contributes less than 10% to total sales, is that because we do not spent enough time, money and energy on creativity and design? The jury of the Effie Awards will be able to judge whether we have used the right mix of econometric modelling and creativity. If not we probably should be more humble about our role as communication specialists.

Print media show slight decline in readership affluent.

EMS, the European-wide media study revealed last week the results of its latest survey. EMS researches the affluent and influential people in Europe and is a valuable balance to many single-media, single-country studies. The study confirms what so many individual surveys have indicated: print media are steady or slightly in decline. On average pan-regional titles were read by 25,3% of the EMS sample, which is a decline of 1.1% compared to last years figures. Individual titles had very little movements, with the free newspapers increasing their average issue readership (AIR).
The EMS survey makes a distinction between the Top 13% and Top 3% (EMS Select) in its sample. The more affluent the higher the readership for print and reach of television. AIR for pan-European (News and Business) print was at respectively 7.2% and 15,3%. Reach of pan-European TV (News and Business channels) was 42,7% for EMS and 53,8% for EMS Select. Next year digital usage will be added to the survey. This will offer an even more complete view of media consumption of this exclusive and influential group of people. Especially in B-to-B and corporate marketing this survey is relevant as C-suits (which are often the target audience in B-to-B) are among the target group of EMS.

Give away your e-book and sell more hard copy books?

Earlier this year I wrote about the correlation between the sales of e-books and hard copy books. The well-know New York Times technology columnist and "Missing Manuel Book" - writer David Pogue wrote in June an article on the this subject. His perspective has to do with copyright and pirated use of e-books and fits the discussion that creative work will sooner or later become freely available via the Internet. Paul Krugman wrote an interesting but much discussed article on this model already used by the Grateful Dead.
In considering free e-books Pogue refers to three possible relations that might exist: giving away e-books for free will boost sales of the print edition, selling e-books is the only legitimate way to buy electronic versions and e-books will kill income of printed books. Pogue refers to two interesting variables: the awareness of the author (less-known authors supposedly benefit more from the free exposure and attract new readers of the printed version), and the genre of the book (do you read science-fiction on a screen?). One of the people who reacted to the story was Kevin Kelly who suggested to have a test with one of Pogue's books. His prediction is that his e-books will not be duplicated as much as imaged and elevate, or at least not depress sales of the print version. Pogue's publishing company started the test this month and I'm curious to see whether the results will confirm what the National Academies Press concluded earlier this year.

Internet = hope and fear for newspapers

Newspapers are probably the biggest losers of the growth of the Internet. Advertisers shift to the cheaper and more accountable Internet advertising possibilities and readers value the speed and the interactivity of Internet news. Zenith Optimedia expects that by 2010 newspapers will take 23,7% of all ad spend (in 2006 this was 28,4%). By contrast, the Internet will represent 13,6% in 2010 (6,8% in 2006). Research among 250 newspapers in the USA shows the paradox newspapers are facing. The Internet offers them a platform to compete with television and radio in bringing video news and generate the related (lower) advertising revenues. On the other hand providing news for the Internet places heavy burdens on the quality of the journalistic work. Andrew Keen has written an excellent book on what he calls the Cult of the amateur. The web does not allow for in-depth, high quality news analysis. Integrating editorial teams for the paper and the web version of the newspaper has been the first step newspapers have taken. But the future of these already downsized teams depends on the capacity to attract advertising money for the web-based newspaper.
The contradiction in this situation is that Google, the exponent of the Internet, demonstrated the value of newspaper advertising in conjunction with Internet advertising. Media are connected: newspaper ads drive consumers to the web. The Google research showed the effectiveness of newspaper advertising but also the effectiveness of the combination: of those who researched a product they saw in the newspaper, 67% did so online.
Advertising budgets will continue to be in transition between the different media untill there is a new equilibrium. However I'm not expecting to happen to newspapers, what MTV believed to happen to radio when they aired at their launch the clip "Video killed the radio star".

Printing increases involvement in Euro 2008

I've been visiting two major events this month as you can see. Of course the opening match of The Netherlands against Italy was a glorious match. And the city of Bern was orange all over, business men dressed in orange suits, cyclists on orange bikes, young women dressed as orange farm girls and in between Italians. Canon, one of the sponsors of Euro 2008 and also a prominent exhibitor at DRUPA, did research that perfectly bridges Euro 2008 and DRUPA. Canon surveyed 4.500 European football fans to find that printing lists, TV scheduled and tournament statistics helped to follow the tournament closer. Over half (52%) of the supporters spend between 30 minutes and 5 hours searching and printing relevant information.
However nothing will beat the real-life experience as you will agree. Thank you Erik N. and Gianni I.

Consumers take time for magazines

Reading magazines is, for 22% of the respondents surveyed by Time Inc, regarded as "a gift to myself". A third of them take special time to read a magazine (45% of the C-suits do so). This research titled "Magazine Experiences" also shows that 96% of the respondents expect to read at least as many magazines in the next 12 months. The research presents evidence about media multi-tasking consumers: watching TV is hardly a unique activity, 38% of viewers are at the same time online. The effectiveness of TV is already questionable but these figures put also sole attention to television in a different perspective.
I have not yet read the full research, as soon as it is available I'll include the link.