Patent activity around search and advertising
In the past, advertising was about noise to get noticed because the advertiser and the owner of the medium never knew what those within range were interested in. The search engines changed all that and they continue to change that. Follow this link to a list compiled by ResourceShelf of advertising and search related patent activity for Tuesday March 7. Beyond this one day the list is huge. Knowing what people want or are interested in is the big thing in online advertising. Those who do it right should achieve higher sales for a lower spend. This is why we’re seeing some companies shift considerable chunks of their advertising spend online and away from mainstream media.
Star gets serious
Weekly women’s magazine Star has had a make-over and is looking like a contender. This week’s edition is a dramatic improvement on the mediocre product we’ve seen until now. The next step has to the a considerable marketing campaign to win new readers and try and woo back people who have the title a go and didn’t like what they saw. Publishers of Star cold use their on-sale day (Wednesday) to their advantage in newsagencies given that by then sales of other women’s weeklies are soft having peaked Monday, Tuesday.
How should newsagents react to the online challenge?
While every major newspaper and magazine supplier to Australian newsagents has, over the last year, invested significant sums in online businesses, newsagents have not made any similar investment. While some have developed websites to enhance customer service, none has sought new revenue streams online. In my own case we have started Inkfast to sell ink and toner online. But we’re not a typical newsagency since we have the resources on my IT company behind us. (Inkfast is now 7 months old and selling more ink and toner in a week than my retail store sells in all stationery in a month.)
Publishers are buying online business to extend the reach of their brands. I’m convinced newsagents must do the same. More interest in traditional newspaper and magazine content and lottery product will be satisfied online and this poses a considerable threat to the traffic which has been central to the performance of newsagencies over the years.
While some newsagents are successfully diversifying at the store level, the channel itself is not and I see this as a significant branding problem for all who trade under the shingle of newsagent.
I’m involved in an online start-up (more on that another time) which will actively partner with newsagents but even that will not go far enough in gaining for them a sufficiently viable connect with consumers who live online such that it replaces revenue they will lose elsewhere.
Companies like Fairfax, News Corp, PBL and Pacific are doing what they must do and I have no qualms with their online push. It is that too many newsagents remain oblivious to this which concerns me. Their associations need to educate and advise yet they remain silent.
Second digital magazine conference in four months
Just four months after their first sell-out digital magazine conference, the Magazine Publishers of America are hosting a second event: Magazines 24/7: Profiting in the Digital Age. The scheduling of this event so soon after the first demonstrates the importance of a digital strategy for magazine publishers. If I were a publisher I would have been riding the digital wave for some time now since it’s where the growth is – especially in the special interest area.
Here in Australia only a handful of titles are playing actively in the digital space. I expect many more to enter this year. Digital magazines pose a threat to newsagents beyond the loss of sales. In the period of transition, while consumers migrate from over the counter to online, newsagent display of the title helps the publisher. Newsagents cannot cut the titles because of contractual obligations so they have to carry them even if loss making while publishers build new revenue models online.
The fair approach would be to recognise that at the non mainstream end of the marketplace especially titles will migrate online. This should lead to newsagents being paid for providing access to low cost real-estate to maintain presence. The only other option for a newsagent for these bottom end titles is to return them immediately and short pay the distributor account. But that only ends in tears.
Can I touch you for luck?
It’s when the elderly female customer asked this question that I realised we need to touch more in our retail businesses. Not in an offensive way. The odd touch here or there at the right time provides a connect no internet business can get close to. Two people, connecting on a common interest, touching skin provides a warmth critical to our success. I understand that the social networking facilities online will change the way we interact with each other, until that is ubiquitous retailers like me ought to exploit the opportunity to touch our customers. Yes, you can touch me for luck.
Vogue magazine website success
MediaWeek this week reports the exceptional success being achieved by the Vogue magazine website. Half the traffic is generated by their forums – the social interaction side of the site. Social networking is a key driver of traffic for MySpace and others. That the publishers of Vogue have achieved extraordinary traffic is a relatively short time will be of interest to other publishers – especially those with readers who are likely to enjoy the social interaction. There will be a tipping point between revenue from the website versus the physical magazine.
Newspaper publisher Fairfax acquires Trade Me, New Zealand’s most popular website
Newspaper publisher Fairfax has made a bold move in purchasing New Zealand most visited website, Trade Me. This is a coup for Fairfax and helps put to rest the jokes about their missing out of a piece of Seek back when it was available years ago.
Trade Me is a very successful business and kudos to Fairfax for negotiating the deal. While the announcement says it will operate as a stand along business, I would expect to see integration with the broader Fairfax offering.
The Fairfax announcement provides no indication as to whether Trade Me will open in Australia nor whether the investment has any relevance to Australian newsagents. The latter is important to me because Fairfax demands a lot from its newsagent channel in support of challenged product (newspapers). Newsagents could reasonably ask if they fit with such an acquisition. The reality is probably not and that’s okay – newsagents need pursue their own future in response to the disruption to their core products of newspapers and magazines.
Shame on Qantas, Australia Post and the Australian Government
Government owned Australia Post and Qantas owned Jetstar are proving the value of being mates now that they are closer to selling Jetstar tickets at Post Office outlets. More here at my small business blog. More here too at news.com.au. Small business travel agents are being done over by Australia Post the same as newsagents. That’s the value of government ownership for you.
Famous window display
We’re using flash lights to draw attention to Famous in the window of one of our shops. This 5MB movie file shows the impact. The challenge with Famous is its covers. Anecdotal consumer feedback suggests the covers are soft.
The Eva Longoria extreme make-over
The latest covers of Ralph and FHM feature Eva Longoria, or so they claim. Which one is the real Eva? Or, has Eva undergone an extreme make over? The Ralph cover looks somewhat ‘touched up’. I wonder what Eva and her people think of this – but then maybe it’s what comes with being a celebrity because of your body.
Dinosaur poster units being promoted to newsagents
Newsagents are being encouraged by one of their associations (the Australian Newsagents’ Federation) to install scrolling poster units from a company called Moving Tactics. These units hold 20 magazine posters and scroll through, promoting the products in store. I see several problems with these units:
Customers spend little time in line in a newsagency so point of purchase displays need to move through their messages quickly.
Newsagents are contracted to provide a certain number of poster facings to at least one supplier. Using this scrolling unit would not, in my view, release them from that obligation yet the promotional material suggests otherwise.
Mechanical poster display units are dinosaur units – LCD is the way to go if you want your store to look relevant today. As I have discussed here I use an LCD unit in my store with excellent success.
Reaction time is slow given the archaic technology. Take the Powerball jackpot. If the $22 million does not go off this Thursday I would want the $33 Million promoted in a consistent marketing message in store from Friday morning.
These units make newsagents lazy. We’re better off creating stories in our shoops based on what is appropriate for us and for our customers. Abrogating that responsibility to a company located far away from the action of our shop is lazy.
Hopefully there will not be much take-up of this offering. Newsagents will gain more from active involvement in their businesses than giving the opportunity over to someone else.
I’d rather see newsagents use LCD screens like I and others are using. The association would have been smarter in visiting these innovative newsagencies and seeing LCD technology working well.
Australia Post further distances itself from stamps
The latest Australia Post (27/2) catalogue distances the government owned corporation further from the Act under which it operates. Less than 2% of the promotional space in the catalogue is used to promote postage stamp product. The Government continues to turn a blind eye while the government owned shops take more sales from small business. newsagents, photographic shops, stationers and telco shops. This underscores the cynicism of the Government’s recent decision to protect Qantas from competition and force consumers to continue paying too much to travel between Australia and the US.
The best blogging newspaper in the world
Jay Rosen and fifteen of his students at New York University set out to determine the best blogging newspapers among the US major dailies. Their report names the Houston Chronicle as the best. The post is an excellent benchmark for any newspaper actively engaged in blogging. It also legitimises blogging for the newspapers yet to discover the medium and prods those who support what I’d call ghost blogs – blogs which are not the real deal.
Newspapers and disruption
Newspapers Next: a project aimed at helping newspaper publishers find disruptive innovation. A project of the American Press Institute this looks like a valuable practical project. Disruption has happened and will continue to happen in publishing. Joining the game in this way helps publishers find a wave to ride. It sure beats publishing stories in your pages that all is well in newspaper land.
This magazine should go out of business
I’ve had a small publisher contact me complaining that if newsagents stop stocking product because it does not perform then companies like his will close as they will lose a very cost effective retail channel. In his case, I receive 2 copies of his $6.95 monthly magazine and usually sell one. I earn $1.74 commission. The retail space costs me $3.00 per month. The title and pocket cost me $1.50 per month to service. So, I have to generate $4.50 per month from a title to break even before I start to recoup non real-estate and labour operational costs. The $1.74 from this title represents a loss for me so I should stop stocking the title. (Achieving that with some magazine distributors is challenging because they believe that I do not have the right to stop supply of a title not performing in my shop.)
Back to my dialogue with the publisher. he says if newsagents stop carrying his title his magazine will fold. Maybe it should fold because right now he is only surviving because newsagents like me are prepared to carry his title for a loss. In effect we’re investing our capital in his business every month. That doesn’t make sense to me.
This small magazine needs to find a publishing model which works for it rather than leech off the ignorance and good will of small business newsagents.
50 magazines which should be taken off newsagent shelves
I’ve been involved in a research project into the cash-flow impact of magazines on Australian newsagencies for the last few months and have just completed a paper on the subject. While I’m not ready to share the full results here I’ll share this from the final paper:
The bottom 50 titles, as measured by cash-flow (taking into account cost of goods, credits for returns, income from sales, cost of real-estate and cost of labour) accounted for between 18% and 20% of all negative cash flow in the magazine department. Put another way, eliminating the bottom 50 titles in the research project would cut negative cash-flow by between 18% and 20%.
Given that an average newsagency has 1,000 titles, we are talking about 5% of titles costing between 18% and 20% of the loss made from magazines.
Imagine the value to the business of cutting the cash loss and using the reclaimed space to better promote the more successful titles.
Given the way newsagencies are valued, a cash-flow savings of $4,000 conservatively equates to a $12,000 increase in the sale price sought for a newsagency. This means that eliminating the bottom 50 titles is worth, in terms of the sale price of a newsagency, between $12,000 and $60,000.
These numbers are an indictment against the magazine supply model and the companies in control of that supply model. Newsagents cannot sustain such losses from a small number of titles.
I have now run two briefing sessions for newsagents where I take them through the data from the magazine cash-flow study. It’s a sobering event. The key will be how magazine distributors and publishers react – especially the small publishers responsible for the titlee causing most of the cash-flow problems.
Online greetings start-up raises $5M
Seattlepi.com reports that, Smilebox, an online greetings start-up, has secured US$5 million in funding. The story is three weeks old, sorry. Like any start-up story there is plenty of froth and promise. What makes this interesting is that it’s in the greetings space which hae been largely ignored in online plays in recent years. I’m interested because greeting card sales are important to newsagents. I’ve seen data suggesting that our retail channel has round 40% of greeting card sales in Australia.
Is another News Ltd Newspaper promotion about to shun newsagents?
I’ve heard a strong rumor that News Ltd is to launch a promotion on one city in a few weeks which will only be available at a certain petrol outlet. If true, this would be the second time this has happened. The newsagency channel was created to distribute and sell newspapers and magazines more than 120 years ago. Petrol outlets have had newspapers only recently. News Ltd relies on newsagents to keep the costs of distribution down and invest in over the counter sales at a rate unmatched by any other newspaper outlet. If News Ltd refuses to include newsagents in what looks likely to be a high profile campaign then newsagents would be right to respond. Some folk in News Ltd have to decide how important newsagents are and if the answer is ‘not important’ then they ought to stop the death of a thousand cuts. If I’m wrong let me know: mark@towersystems.com.au.
Newspaper stand boost sales
Thanks to co-operation from News Ltd we have a new newspaper stand on trial at our lotteries counter and it’s working a treat. Getting a newspaper sales with a lottery sale is much better than just the lottery sale. It’s only been on the shop floor two weeks but indications are that the stand is worth between 5% and 10% in additional sales.
Magazine tidbits
NW has a bright green masthead this week – making it stand out in the crowding women’s weeklies section on newsagent shelves.
The WHO Weekly once off price drop to $2.95 is working with consumers – sales have been very strong. In my own store I’ve seen people who usually ignore the title purchase it because of the low price. It’s a great way to get people to take a second look.
ZOO Weekly is soft in its third week. Compared to Picture and People it’s slipping. Blokes are not weekly magazine customers. But maybe they are in enough places to warrant the title being published.
The Commonwealth Games Program is selling very well.
Magazines were up 7% in February this year compared to last in my store. What’s interesting is the Buying & Selling, Food & Wine and Computers & Gaming categories were all down 20%. It’s been this way for a year now. These categories are in serious trouble yet newsagents continue to get loaded with stock.
What’s up? A new way to navigate news.
Check out What’s Up? by Jeroen Wijering. As he says, it’s an indespensable tool for the global news junkie. It’s thin on Australian news but isn’t everyone? Source: MicroPersuasion.
How newsagents can lose a sale thanks to ‘smart’ technology
Over 3,000 newsagents use equipment from Bill Express to process credit card payments, telco recharge business and bill payment.
Up until about 2 months ago if you processed a Credit Card transaction on the Bill Express EFT Terminal and failed to press yes or no to verify the signature, the transaction would process through as an approved transaction. If you were tied up with that or another customer and didn’t answer yes or no then your transaction would still go through and the funds would hit your account.
Somebody in their wisdom decided it be best that if yes or no was not pressed in time the transaction should decline regardless of the document signed by the customer showing ACCEPTED.
We experienced this first hand several times in my shop. We approached Bill Express and they advised that the change was an ANZ policy. We approached the ANZ and they denied this. They went on to advise that it used to be the case years ago on old MultiPOS terminals.
ANZ Merchant Services advised us ten days ago that this was one of the most common reasons people (especially newsagents) called their support centre. ANZ changed their software on the new stand alone MultiPOS unit so that the transaction would go through. Given the conflicting information put to us by Bill Express and the ANZ we cannot be sure as who needs to do what, one or the other needs to change their software for processing on Bill Express terminals.
The idiot who made this decision has cost newsagents (including us) money. That there is spin from Bill Express and (possibly) the ANZ is disappointing.
To Bill Express we ask: Why make a fundamental change such as this and not clearly inform your customers? Bill Express should have advised clearly what steps we need to take to recover the funds in an approved transaction being converted to a declined transaction.
ANZ Merchant Services, to their credit, have provided us with a process for recovering money from transactions cancelled. This at least helps us claw back funds Bill Express told us were lost.
My frustration is that either Bill Express or ANZ or both have let newsagents down. That no one has owned up to this is most frustrating and demonstrates a lack of regard for the newsagent channel. Had I not alerted newsagents to this problem ten days ago they would not have known nor would they have had knowledge as to how to recover the money lost.
Fox and other media outlets beat up Craigslist
FOX News yesterday, on the Fox & Friends TV show landed some punches on Craigslist, even calling the free classified site Craigslust. It didn’t matter that the comments were ill-informed. Balance was almost non-existent in their discussion except for a brief glossed-over comment acknowledging a response from Craigslist founder, Craig Newmark. The ‘story’ was that prostitutes used Craigslist’s free advertisements to promote their services. Hmm, and News Corp. has never allowed such advertising; News Corp. has not used breasts to promote newspapers?
It’s one thing for a media company to comment on another, however, such comment ought to be fair, factual and balanced. The Fox & Friends spray was none of these things.
Craigslist has come in for other sprays in mainstream media recently: Boston Herald, New York Times – to list just two.
Craigslist is a tiny company causing significant impact on the classified advertising business. Media companies ought to respond to this competition through their offerings to consumers and not through biased stories.