A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Author: Mark Fletcher

The refurbishment gets better

K-Mart closed a month ago for a nine month make over into a Target store. So far so good. Some categories down and others up. We’re dealing with it. The big surprise today was the news from the landlord that we’re going to have to give up most one of our stationery aisle for works related to the Target build – they have to replace the steel columns with concrete ones. Besides losing the space there is the visual impact on the business with a temporary construction feel as well as other challenges we will discover when this starts.

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Newsagency challenges

Fairfax / RSVP caught manipulating Google results

Fairfax Digital, the owner of RSVP, the biggest online dating site in Australia, seems to be using dubious SEO tactics to manipulate Google search results to attract more traffic to its site.

Using Hitwise data we can see that RSVP attracted, on average, 3.3 million visits a month over December 2006 and January 2007. Our 3loves site attracted on average 49,778 visits a month over the same two months while all online dating sites attracted on average 20.79 million visits a month. RSVP has 15.8% share of traffic in the online dating category. We have 1.5% of RSVPs traffic.

These stats make the RSVP behaviour all the more curious. Here’s what we know so far.

Fairfax Digital uses an organisation called Commission Monster to promote RSVP and, we suspect, other Fairfax Digital sites. We discovered this by tracking redirection from a Google search results link through to where we actually ended up. We were taken through Commission Monster on the way to the page we were seeking through Google.

Someone, we suspect Commission Monster, has created a page which redirects traffic to RSVP when they have been searching for 3LOVES. This is a violation of Google rules. Click here to see what Google thinks is at the page. This is what the Google spider cached on January 30 this year. Curiously, the page has been modified in the last 24 hours, since we first raised this issue, and is now displaying an error.

Until yesterday, the page seemed to check where the click came from and if it was not Google, the browser redirected to RSVP. We know from Google results and what’s in their cache that the Google spider was not redirected.

Here is the Google cache for the page as captured by us today. This is evidence of misbehavior. Fairfax / RSVP actions over the last 24 hours show they know they have been caught out. Expect the Google cached page to change as they try and remove traces of their Google search results manipulation.

That Fairfax and or their representatives have changed the redirect page in the last 24 hours is proof to us that they know they have done something wrong.

Even though it does not actually exist. Browsers clicking on the Google search results are taken through what is called a 302 redirect to RSVP. Whoever set this up did so to take people searching for 3LOVES to RSVP.

Whoever has done this has gone to considerable lengths to try and trick the Google spider. BMW did something similar and were removed from Google for a time as a result. Details of what BMW did and the consequences can be read here. Google gave BMW a pagerank 0 penalty, meaning that they lose all relevancy in Google searches. It’s kind of like being sent to Siberia in Winter for a while. Google takes attempts to manipulate search results very seriously as the purity of results is crucial to their credibility and business model.

We know from our research that Fairfax Digital is not only targeting our 3LOVES site in this way. We have plenty of other dating site names being used to drive traffic to RSVP in this way. Here is the cached page setup for Adultmatchmaker.

We have reported the matter to Google. They came back to us quickly and have sought additional information which we are providing.

Google’s webmaster guidelines cover this issue. Specifically, Google advises webmasters: Don’t employ cloaking or sneaky redirects. They go on to say: If a site doesn’t meet our quality guidelines, it may be blocked from the index. This is why we are putting it to Google that RSVP is removed from the Google index.

3LOVES is a tiny free online dating site. We’re new, we’re under-resourced and we are filling a need in the community. People are spending too much chasing love online. Tens of millions of dollars are spent each year by Australians chasing love and romance online. If we can save even a fraction o that for people to use elsewhere in their lives than our mission will be accomplished.

The folks at Fairfax Digital and RSVP ought to get a grip and focus on their offering rather than try and con people searching for us into visiting their RSVP site.

3loves is part of an online classifieds offering we are launching with newsagents as our retail partners.

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Online classifieds

Growing single copy newspaper sales

“Consumer behavior has changed,” Schaub explains. “They will not go out of their way to find your product. … If they go to Starbucks, you have to be inside Starbucks and be in their pattern. They won’t turn the corner to find you.”

That’s Dan Schaub, senior vice president of circulation for the Sacramento Bee quoted in an excellent article by Jennifer Saba about single copy newspaper sales published two days ago by Editor & Publisher. Newsagents, staff in industry associations and publishers need to read this. They (we) need to read it and discuss it. This article goes to the heart of the challenges we face in newsagencies in Australia at the moment.

I especially enjoyed reading about the research by the Newspaper Association of America including this:

Buyer behavior has become more erratic when it comes to purchasing papers at the newsstand (or local convenience store or supermarket). This means front-page design and hard-driving marketing tactics are even more necessary to ramp up sales, the study suggests.

We’re seeing erratic buyer behaviour here. This is why publishers want to get their newspapers into more outlets like Gloria Jeans, Big W and Starbucks as we have seen over the last year or so.

The article details this mystery shopper promotion run by the Sacramento Bee circulation people:

In addition to upping racks and distribution in retail outlets, the Bee made sure to hit the streets in an effort to get to know managers and store clerks — the people who decide the placement and sale of the product, much like Jimmy Newsboy of old.

To get the copies flowing, the circulation team approached sales clerks with a “mystery shopper” incentive program. Sales clerks who suggested to any customer that they buy the Bee, would receive money on the spot — $10 to $20 — if a team member “caught” them doing it, during a surprise visit. Using the power of peer pressure, the Bee distributed a newsletter every week to the participating stores listing who won the cash. Those clerks who failed to mention the Bee during the covert visits were also listed. “We saw a big difference with that,” Swift says.

The mystery-shopper contest was combined with price pulsing (a reduction in the price of the paper). Initially, sales grew 17% during the promotion. Even after the price went back up and the incentive program ended, single-copy sales grew 8%.

Be sure to read the whole article. In my view the issues are the same here except we’re a little behind. The article provides advance notice – an opportunity for newsagents to get on the front foot.

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Newspaper marketing

Powerball $33 million jackpot drives retail excitement

We’re promoting the $33 million Powerball lottery jackpot in key non lottery traffic areas of the shop this week. The size of the prize and that Powerball usually produces fewer to share division 1 has heightened customer interest. So, we’ve created in-store materials of our own to punch the excitement for us and our customers. Here’s what we have done at the front of the shop:

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Above our top selling magazines:

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At our front-of-shop magazine display:

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At our newspaper stand:

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And, at our main non lottery sales counter:

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We spent $50 on the balloons and $10.00 on colour copies of the posters Tattersalls provided us. This investment will generate an exceptional return, especially from infrequent gamblers – those who only jump in when the prize jackpots like this. The theatre created by the materials will also drive non-lottery sales.

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Lotteries

Fairfax SEO strategy manipulates Google results

Do a Google search for our startup free online dating site, 3loves, and this comes up in the results.

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If you click on the link it takes you to RSVP. This is very clever Search Engine Optimisation by Fairfax Digital, the owners of RSVP and reflects a manipulation of Google search results. In the bricks and mortar world this could be considered passing off your product as something else to get a prospect interested.

I don’t know why Fairfax would go to so much trouble, we are barely an ant to their gigantic online dating site. Maybe it has something to do with RSVP costing around $30 a month for members to do what they can do at 3loves for free. Whatever the reason, Fairfax ought to stop manipulating Google search results as it’s scams like this which will lead to distrust.

People using Google and other search engines need to be able to trust search results and games like those played by Fairfax dilute that trust. Someone searching for 3loves wants to find entries which refer to 3loves, not entries created solely to siphon this traffic off to a website which has no relationship at all with 3loves.

There are enough scammers in the online dating world already. I wold have thought Fairfax too successful to engage in these games.

3loves is a social media site launched to support our Find It online classifieds business – a online model we are launching with newsagents.

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Online classifieds

Fairfax drives newspaper readers online

age-oscar.JPGThe Age has changed its approach to online over the last few weeks. Whereas in the past some stories would list additional information available at The Age website, now they more actively promote the website. The photo is from the story yesterday about the Academy Awards – readers are encouraged online for more information. In the same story in the Sydney Morning Herald there is no such link promoted. However, their website pitch is included in their masthead on page one.

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Fairfax is leading the promotion of online extensions of stories. There are some who would say this move is evidence of their desire to shift people online in the knowledge that newspapers are dead. I don’t share that view at present. It’s smart that they use the online medium to extend the reach of the print product.

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Newsagency challenges

Newslink newsagency at Sydney Airport

The Newslink store at Sydney airport is three months old. This new layout is a progression from the more traditional Newslink stores which we have seen in Australian airports for many years. Here’s how the store looked from the front yesterday:

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The store has an open entrance but with plenty of product to entice as you enter and leave. I also like the way they promote their range above the entrance.

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All their magazines are full cover displayed an they are in popular categories. The layout is a bit of a maze but that’s in part due to limited floor space and plenty of stock as well as the designer’s goal to have you browse the maze more.

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For newsagents in a high traffic location considering store design, looking at this shop would be a worthwhile visit.

Newslink is owned by HDS Retail, the company which owns the relay stores I blogged about here a week ago.

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magazines

Newsagent dies as a result of armed robbery

Chinh Nguyen, the owner of Glenfield newsagency in NSW died this morning as a result of injuries sustained during and armed robbery at his newsagency last week. I never personally met Chinh but people in my company did: Chinh was a breath of fresh air. An example of an enthusiastic and excited breed of Newsagent making a positive impact in his shop and the industry. He will be missed.

Newsagents don’t get killed on the job. Chin’s passing will come as a shock to the channel. It’s a reminder to take care.

Chinh’s brother is taking over the running of the business for the family. In addition to the grief of the loss of Chinh is the challenge of learning the business and protecting the family investment.

The news report can be found at NSW Police.

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Newsagency challenges

Ink and toner retail success

We’re having great success with the retail ink and toner strategy from newsXpress. The flyers we get (see below) every two months drive traffic to the shop. They’re more successful than the flyers we had before we joined newsXpress. This ink and toner offer is separate to our Inkfast online business – different range, different price points and different customers.

The newsXpress strategy is driving new customers to our retail outlet based, in part, around this flyer:

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The keys for success with ink and toner for us have been getting the right range of product in store for a competitive price, professional marketing and access to good product knowledge. By packaging the buying around top brand name sellers and reflecting them in the marketing material we have been able to significantly lift the return on investment.

While we’re pushing our 20,000 personalised flyers out with the local paper, I know of others doing just as well with direct letterbox drops. I’m looking forward to the next flyer and driving this category within my business. Ink and toner customers are efficient in that more than half the time they buy other items.

Disclosure: I am a shareholder in newsXpress Pty Ltd.

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Stationery

Current newspaper model not working well

So says Steven Rattner, managing principal of Quadrangle Group in this interview with the Financial Times. Rattner’s insight is worth reading. The interview contains this quote from Rattner:

I personally believe that fundamentally the problem is a changing appetite for news on the part of consumers, for the worse. And its something that I feel very sad about, because the fact that people are more interested in whether Britney Spears shaves her head and goes into alcohol rehab, or what is happening at Guantanamo Bay, really is troubling to me.

Of course, Rattner is speaking from a US perspective. My view is we are better served by newspapers here than in the US. While we do have a strong tabloid press, we also have a robust more serious press – just look at the on going campaign by The Age about the plight of David Hicks.

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Newspapers

Another blow to newspaper classifieds

For decades they were called the river of gold. Not any more thanks to more advertisers migrating classified ad spend online. The Myhome property site launched late last week by PBL will put newspapers under further pressure, Saturday newspapers especially. Myhome is a good looking site with some nice features. But it’s not that different to the Fairfax Domain and News realestate.com.au sites. What Myhome achieves is a seat at the online property classified ad table. It also dilutes interest in the print classifieds and this is the challenge for newsagents.

Newsagents have no national strategy for accessing online revenue. The best opportunity so far is the Find It website I launched last year and which is still in beta (free) release. Unfortunately, newsagents seem uninterested in making Find It a success and thereby tapping into online revenue. Newsagents can still sign up here. It’s free.

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Newsagency challenges

Finding good staff

It never rains but it pours. University is back and that means the roster becomes a juggling act. Add to this three key team members taking up full time study and another deciding that nursing is the career for her. What looked a month ago like a manageable roster is now very empty. So, we’ve been interviewing to fill two full time and two casual positions.

The hiring process is tough because it’s often not the first choice for candidates and they take a job to get money waiting for what they really want comes along. I wouldn’t mind if they were up front about it, as one of our team has been. Instead we probe and dig in interviews to try and sort out if they want to make a career in a newsagency.

I’ve waded through 72 resumes, followed up fifteen with our position description and selected seven candidates I’d like to interview. In the week we have been looking four are no longer available.

This is going to be harder than I’d like.

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Newsagency challenges

Co-location of magazines works

We’re leveraging increased lottery traffic into solid magazine sales using the unit shown in the photo below in front of one of our lottery counters. This photo from Saturday shows the titles we are pushing. Today it changed again to focus on weekly titles out today.

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This co-location approach, seeing weeklies in two locations on the first two on sale days – drives magazine sales – especially when we have bonus traffic thanks to the $33 million Powerball prize up for grabs.

My pitch to magazine publishers and distributors is that you don’t see other retailers – supermarkets, petrol, convenience – take initiative like this. We understand the opportunity of the bonus traffic and are working hard to maximise this.

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magazines

Wrapping paper sales down, gift bag sales up

Customers are buying less folded wrapping paper and more bags for packaging gifts. When I first heard of this trend from a supplier a year ago I was surprised because I was not seeing it in sales data. Then, I realised that all the sales data I see comes from newsagencies where until very recently, bags were rarely ranged.

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Sales data from a small sample of stores for a year and a half to December 2006 shows, at best, no growth in folded wrapping paper sales and, most commonly, declining sales. With retail real estate expensive and increasing by between 5% and 7% a year, this decline is most unhelpful to newsagent. Suppliers, too, are not served well by the decline.

We have three metres of wrapping paper in my newsagency. Without reducing that and in response to feedback from our supplier and our sales data, late last year we added three metres of bags.

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While I would have preferred to locate the bags next to the wrap to demonstrate a wide packaging choice, locating them at the front of our card-shop-within-a-shop is working well. This is in part due to it being close to our seasonal displays.

The next step will be to consider a reduction in the folded wrapping paper space allocation.

Newsagents need to look very carefully at their sales data and discuss this with their wrap suppliers. There is no point in ranging product which is not delivering an economically viable return.

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Newsagency challenges

Supermarkets and lottery products

Based on what I see happening at Tesco in the UK, it is easy to see why our Coles and Woolworths would like lottery products at their checkouts. Check out this pitch from Tesco, they make it sound like you’re doing the community a favor buying lottery product with them. Their Fast Pay pitch certainly addresses the long line issue. Unless lottery agents get engaged in thins issue, supermarkets will get lottery products and we will be the losers.

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Lotteries

Inkfast ink and toner cartridge business going strong

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It’s been a while since I have blogged about Inkfast, our online ink and toner business. Inkfast is two years old. We run it out the back of our newsagency. We advertised heavily online through Google, Yahoo and Yellow Pages online. All those campaigns are now off and have been since third quarter last year. Sales are strong with around 70% coming from existing customers and the rest from new business won through word of mouth. Most customers are corporate and most items purchased and not items we would usually carry in our newsagency. Thanks to our turning off of the expensive advertising spend, profitability is good, even with tight margins due to a very competitive marketplace.

I’d go out on a limb and claim that Inkfast is the most successful website created out of a newsagency. Traffic numbers are high and sales strong. It is bringing new customers to us, even though we never see them, every day. We transact more business in a week than we do in the stationery department of our shop in a month. This is in part due to our demographic. Being online, Inkfast is not bound by the demographic feeding our retail location.

The Inkfast experience is unlocking for us supplier rebates as well as an understanding about ink and toner which is helping us create a more successful offering in store for our retail customers.

What we are most proud of is that we created this ourselves from scratch and we rely on no one major supplier. The feeling of freedom is wonderful.

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marketing

Beyond Intralot, the Vic. Government is set to hit newsagents again

I’ve been told that the Victorian Government transport ticket tender (see my post of 11/9/06) will see retailer commission cut to .25%. That is, a quarter of one percent. While I don’t know if what I have been told is true, I do know that anything less than 4% offers an uneconomic return on labour. This is another question Victorian newsagents would do well to put to their local member of state parliament.

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Newsagency challenges

Liquorice regularity

liquorice.JPGThis pack of Darrell Lea liquorice is one of the most efficient products we sell. Rarely is it sold alone. So, it is either a great add on or a great destination product for customers who buy other items while in store. Either way, it’s one of the most efficient products we sell.

I like liquorice because it’s a habit based product. It is. And in my experience liquorice customers are brand loyal, meaning they are prepared to visit our store specifically for liquorice rather than purchase another brand while shopping elsewhere.

It’s habit based products like this which are crucial through this transition time as fewer newspapers are sold in newsagencies. We need every destination product we can get. While I’d prefer killer destination products like newspapers as they were in the 1960s and 1970s, I am happy with the small steps type growth liquorice is providing.

I like Darrell Lea because they understand the importance of not being in too many locations. This loyalty to retailers is returned with good space allocation and strong promotions.

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Newsagency challenges

Newspaper masthead trash

The Age today has another post-it type ad stuck above the masthead. It’s covering the promotion of a free DVD they are giving with the paper today which is odd.

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The publisher needs to understand that these post-it notes frustrate customers. Just look at how many are removed at the counter or outside the shop and thrown on the ground.

Also, as a retail only newsagent I don’t want to help the publisher convert retail sales from my shop to home delivery sales.

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Newspaper marketing

Magazine relay grows health title sales

Our decision to break with magazine layout guidelines and consolidate health magazines from a couple of locations into this new space next to food is working well. Browsing of the category is up as are sales. This is one of an anticipated eight to ten category location changes we will undertake this year.

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Home and furnishing magazines have lost 15% of their space allocation as a result – their sales support such a reduction.

We know that half the battle with magazines is the browsing experience. Our approach is to focus on faster moving categories, provide an easy to navigate layout and support the category with logical adjacencies.

I know I complain here about the magazine supply model, particularly the extraordinary oversupply of fringe titles. For all that doom and gloom, magazines do provide fulfilling experiences such as with health.

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magazines