Author: Mark Fletcher

Australians love magazines and they are taking to new and revitalised offerings if these experiences in my newsagency and newsagents I talk with are anything to go off.

The latest to achieve good results is Notebook from FPC Magazines. We have sold 70% of allocated Notebook stock in the first seven days – without any major in store display other than a counter unit and co-location across two segments. In most cases Notebook was purchased with another title.

Looking at sales of other magazines in the segment, Notebook has not impacted them.

I would be interested in the sales data from the non newsagent outlets carrying the tile and whether they have achieved similar sell through in the same timeframe.

The challenge for a newsagency like mine where we carry almost 2,000 magazine titles is to do new launches justice while also providing appropriate support for titles being refreshed (and re-launched) and regular titles.

NASA has reported (Aug. 7) that Mission Specialist Steve Robinson sent this podcast from space. The podcast was recorded as the Shuttle flew over the southeast tip of Indonesia.

NASA specifically calls the recording a podcast. This further legitimises podcasting as a medium for publishing material. It makes podcasting more interesting and puts it on the radar of more punters. It will also increase coverage of the new medium by mainstream media. It makes podcasting more mainstream.

That podcasting is barely a year old and already it has a NASA seal of approval is phenomenal. I was talking with someone just a few months ago who said pod what? Today they’re playing, downloading music and news shows to their taste from around the globe.

The Age carried the story with this opening paragraph:

Technology experts who predicted that podcasting would “take off” have been proven right, literally, with a Discovery shuttle astronaut transmitting a message from space.

This is the story to me. The coverage in mainstream media of the NASA podcast. Especially when it is mainstream media (like Australian newspapers) which has been (for the most part) slow to play with the medium.

Podcasting is changing the way people consume news and information in addition to music. Indeed, music was a no brainer. It’s the use of the medium for news and information which interests me the most. The NASA podcast, while done for publicity I am sure, underscores the importance of the medium and can only strengthen its future.

Read this article by Michael Grebb at Wired News about IPTV and you can see we’re closer to a future of on-demand, personalised TV and movies. It seems that all previous attempts to harness the Internet for television type offerings have been trials for what we are about to see.

No wonder there is much interest among the Foxtel partners and side players in the plans of Telstra and others in this space.

It will be interesting to see the government play its hand, if it does at all.

While I watch the Herald Sun Monopoly promotion draw to a close and The Age/Starbucks 50 cent deal override the values of this respected broadsheet, I am enjoying reading the research undertaken by the Readership Institute at Northwestern University.

The Readership Institute at the Media Management Center, part of Northwestern University, partnered with the Minneapolis Star Tribune to create front and inside pages that drew an enthusiastic response from younger adults. News and advertising content were tested with a total of 340 young adults in March 2005. The tests showed that hard news and advertising – handled in this a new (reader-intensive) way gets much stronger (2:1) results than the current approach to telling and selling news and advertising.

You can find a good overview of the study and findings here. Check out the rest of their website and you will find copies of their presentations to two recent major newspaper industry conferences as well as copies of the front and news pages tested as part of the study.

This is smart research by the Readership Institute and smart engagement by the folks at the Star Tribune. They have found a way to engage with the under 30 consumer – a kind of a holy grail for newspapers. They have found this by talking with prospective customers.

As a retail newsagent I would rather be working with a publisher using research to understand audience and build their readership than competitions which provide a short term boost at best.

It is tragic seeing customers buy two or more copies of a newspaper when a competition is running and discard the copies in the bin once they have retrieved the entry coupon.

These are newspapers. If people are not buying them to read them then what’s the point? Sure there are technology challenges. Maybe engagement customers and prospective customers will help publishers, editors and the retail channel find ways to snare sales we’re currently failing to achive.

It is interesting to watch the growing involvement of governments in Australia and overseas in the broadband play by non mainstream media companies. How they react to what I expect is signifcant lobbying by media companies will speak volumes for their competition policy. My view is that when it comes to competition policy our current Federal Government has double standards.

News Ltd has announced that The Saturday Daily Telegraph will carry Weekend Shopper – a free classified liftout offering free ads for general buy-and-sell items.

While there are some rules (items up to $300 and location of advertiser) this is a major change to the newspaper classified advertising paradigm in Sydney.

With craigslist.org and other pure online plays becoming established in Australia the classified space is very much in play.

In researching further along the lines of my comments here and here about the newspaper brand, I have discovered The Readership Institute, a division of the Media Management Center at Northwestern University. In several places on their website they comment on newspaper brands and the importance of building the brand in securing a future for a newspaper. They provide a clear definition about brand, separating it from a slogan and keeping the branding activity away from the marketing department.

Here are some comments from Institute Director John Lavine and Director of Consumer Research Bobby Calder which I found interesting:

Lavine: Let me start by saying what brand isn’t in the context of newspapers. It’s not the newspaper’s name, or its flag, or its tag line, such as “all the news that’s fit to print.” It’s not necessarily what the newspaper thinks or wants its brand to be. It is how the consumer or reader perceives the newspaper, the images and feelings and meanings that are conjured up in people’s minds when they think about or look at the paper.

Calder: Branding is the activity that goes on inside the newspaper first, to come up with an idea that has great meaning for readers. You have to find out what, in their minds, is a great idea — something that is so linked to their lives and needs that it would make them use the newspaper more. These ideas must be informed by consumers and they have to make sense to consumers.

Lavine: You know what your brand is by discussing it with readers. Your brand is whatever your customers think you are. The composite of their experiences with you, their perception of you, their feelings toward you, and what they think about you — that is your brand. The more passionate your customers are about your newspaper, the stronger your brand is (and a strong brand is not necessarily a positive one.)

Calder: Understanding what your brand is and what it should be requires some specific marketing research. You begin by discussing it with consumers qualitatively and then doing research to measure the brand on a number of key perceptions you identified as being important to consumers. In general you want to look at results to see if your strongest perceptions are the ones you have intended to base your brand upon.

So branding is not about Monopoly or winning a dream home or a luxury car. Branding is about content more so than flash.

As a retailer of newspapers and someone acutely aware of the challenges of flat circulation, the work by Lavine, Calder and their team is most interesting. I see customers reacting to competitions more than engaging with the newspaper as a newspaper. I see (some) newspapers pitching themselves more as entertainment than news. I care about this because newspapers are the most important product I sell in my newsagency and indeed through all of Australia’s 4,600 newsagencies. Anything they do with their brand reflects back on my business and all newsagents.

I’d like to see Australian publishers engage with their unique distribution and retail newsagent channel and undertake research along the lines of that you read about at the readership Institute. The publisher/newsagent relationship is a valuable asset which could be better leveraged in pursuit of incremental sales. Brand building is a key activity in such pursuit.

My sense is that research would uncover frustration among consumers about the use of competitions to build sales and confusion about newspaper brands.

First report through from the Wikimania conference in Germany (Aug. 4 through 8) courtesy of John Burke at editorsweblog.org. The Wiki movement, while young, is fascinating and has the potential to shape how we access news and information, especially in the light of how some publishers are using the free paradigm to maintain a link between their brands and consumers.

In reporting on the conference and a keynote speech by founder, Jimmy Wales – in which he listed ten challenges for the free culture movement – Burke, considers how newspapers might respond and says that free access to Wikinews archives should make newspapers reconsider their current approach of charging for access.

It is easy to dismiss the Wiki movement as irrelevant in Australia by pointing to newspaper sales. This can only be considered in the context of Wikinews etc access from Australia. It is a channel which has only existed for a short time and already there is considerable worldwide support. Its influence will grow, beyond the organic growth, as media ownership becomes more concentrated.

Levi Brooks and Jason Farrell have launched must read blog which discusses business and in particular the changing art of reaching younger people. I like the writing style and the clear focus of their work.

The post, Thin Slicing the Good, the Bad, and the Ugly, is a good example of their comments. It discusses their proposition that their (young) “generation will not listen to traditional advertising with as much faith as other generations”.

This is a critical generation for business to connect with and blogs such as this one help facilitate better understanding.

In Podcast: David vs. Goliath at Business Week, Heather Green reports on the impact on independent podcasts of the Apple move four weeks ago opened iTunes to podcasts. Green relies on the iTunes rankings and while those figures speak for themselves, they do not include podcast traffic through many other outlets. To be fair Green notes this.

It is a David versus Goliath battle though, with larger companies having access to better production and promotion resources than the independents. This will challenge independent podcasters to create more cutting edge, relevant and valuable material.

Podcasting is a (relatively) new medium and needs to be treated as such by all involved. While independent producers have the challenge of resources, media giants face the challenge of being relevant to the podcast audience. Success will come to those who embrace the medium and take podcasts beyond a feint variation of what we can get today on radio or in the press. Take me to a new place and give me an experience I’ve not had before, beyond portability, and then you have something interesting.

The Herald Sun is running a Monopoly competition at present. It’s designed to drive sales with the offer of plenty of prizes.

I heard some anecdotal evidence from people in my retail newsagency that since the Herald Sun Monopoly competition started some customers were purchasing two or more copies of the paper. In one instance, a regular customer (who also purchases plenty of lottery tickets) purchased four newspapers, removed the Monopoly coupon and discarded three copies of the paper.

I’ve gone through the sales data and can confirm that the competition has resulted in a change in buying patterns in my retail outlet. We have more sales during the competition involving multiple copies of the Herald Sun than prior to the competition. Not a huge number more but it is certainly noticeable.

While I am happy to get an increase multiple Herald Sun sales, I cannot see the long term benefit for my business nor for the advertisers who would be hoping the newspaper is attracting additional readers. I can understand the reasoning for the campaign and accept that it is traditional in newspaper marketing terms. I wonder, though, if it is time for a change.

I’d like to see a newspaper marketing campaign built around the masthead and the value it stands for. A campaign which supports the habit nature of newspaper purchase beyond winning a new car or a trip – something which values the content and by association the supply chain which helps get that content to the consumer on time and in good condition.

This piece by Steve Outing at Poynter online from earlier this week about two early adopters using Google Maps and Google Earth to change up online real estate advertising is a must read for anyone deriving revenue from that space.

One of the challenges facing advertisers of how to get listed on the right sites given that there will be more and more outlets. Whereas in the past each city had a classified advertising newspaper of record, in this new world one can see that the same city might have at least several websites offering an equal or similar reach. I’ve got half an idea there about how Australia’s newsagents might connect with the online advertising opportunity but more on that another time.

Given the low cost / no cost associated with new technology, early adopters are only early for a short time compared to a few years ago. At least that seems to be the case in the US. Here in Australia we seem to be slow at adopting some of these newer technologies – in the advertising space especially.

Within a couple of clicks of entering www.oodle.com I was able to create this map of housing available in San Francisco. (Oodle brings together listings from hundreds of local and national sources and uses Google Maps techn ology to display their location.)

Once I have this capability on my mobile phone and based on my location at the time I have a very sexy new classified model. Sure, some people will enjoy reading classifieds as if reading a book. They are not as interesting as those who access the advertising in pursuit of a purchase.

The marriage of classified advertisements with Google maps is brilliant.

I’d like to see newspapers in Australia reporting on this online advertising phenomenon and in particular the rapidly changing classified space where mapping, mobility and lower cost are key drivers for online business growth.

What is really interesting in this space is the battle by newspaper publishers, particularly in the United States, to retail control of classified advertising.

The blue line is the average daily sales for a popular weekly magazine in my newsagency for the last year. The red line is the average sales for the four weeks we have received between 50% and 100% additional stock which has enabled us to have stock for the entire on sale period.

The graph speaks for itself but in case the message is not clear: if I have stock on the shelf for the full seven days I’ll achieve sales for the magazine. There is demand beyond day three or day four.

The problem is that automated economically focused scale out models set supply figures for my business which are more likely to see a sell out prior to the end of the week.

This approach starves my newsagency of oxygen – sales.

While I understand that publishers cannot print sufficient quantities to enable all retail outlets to have enough stock for the entire on sale period I suggest that they do have an obligation to enable my business to achieve its full potential.

In the case of this title, for the weeks I have had stock, sales are between 30% and 50% higher than other weeks. While I might not sell out on these other weeks of regular supply, this may be because of consumer reluctance to purchase when there are only one or two copies of a title left on the shelf.

While I am all for competition, it is frustrating to have another outlet in my shopping mall about to sell The Age newspaper. There are already five outlets in the mall with The Age, spread evenly throughout. The new outlet, Starbucks, will probably not increase newspapers sold in the centre. Indeed, given the browse opportunity while drinking coffee one could reasonably expect sales in our outlet and other outlets to fall.

Fueling my frustration is that Starbucks sells the newspapers for 50% off the cover price. I cannot see how this enhances consumer perception of The Age brand.

While my newsagency outlet actively supports all newspaper brands including The Age and energetically embraces each promotional opportunity, Starbucks will support their brand above other products and be quite passive in promoting the newspaper brand.

In my newsagency and others like mine, the key brand we identify with is the newspapers we sell. At Starbucks it’s a reversed relationship. This is a small add on to them and disappointing to businesses like mine which have been long term supporters of newspapers.

I would like to think that there will be an analysis of newspaper sales in our shopping mall three months after Starbucks opens tomorrow with disclosure back to us as the main newspaper retailer as to the impact of the Starbucks relationship.

Mobilecast has announced the availability of a Podcast-to-AMR converter for Mobile Phones. AMR files can be played on many mobile phones.

This development opens podcasts to more mobile people and will serve to extend the reach of the programs being produced.

I saw a customer in my newsagency a couple of days ago pull out what looking like ten different loyalty cards, looking for their magazine club card for my shop. Their comment was along the lines of “I should get rid of them cause you never get anything.”

I succumbed to temptation and asked how they viewed our campaign against the others. “It’s great,” was the answer. The customer explained saying that our campaign told them how close they were to free product. It also offered more valuable rewards. Plus it was in a product category no one else catered for – magazines.

I talked to the customer for five minutes, listening to their complaints about the other loyalty cards and how she used them religiously without getting any benefits. She was highly critical of FlyBys for offering nothing.

Her reason for keeping the cards was habit. And that surprised me. Here you have a smart customer, using something to which she attaches little value, only because of habit. Great job Coles Myer on FlyBys.

But great job us too because this customer has altered their magazine buying as a result of our loyalty program.

I am thinking about loyalty programs today because more newsagents are embracing them – but in a me too type way. They are providing cash and other rewards based on purchases without sufficient strategy built into the campaign to get customers shopping more frequently and spending more. To my mind a loyalty campaign has to offer as close to instant gratification possible. It also has to differentiate from the likes of FlyBys and other traditional points campaigns. If you don’t differentiate then you get judged as if you are part of their game.

In the case of the simple (low tech) campaign I run in my shop, year on year we’re achieving excellent sales growth in our magazine category and several other categories. While we do reward some customer who shop with us regardless, we’re seeing significant incremental growth and that’s the name of the game.

I am yet to see numbers of a more traditional (points based) loyalty program in a newsagency which show similar incremental growth.

The conversation with this customer has encouraged me to work on a more structured gathering of customer feedback. I reckon there’s gold there if we can mine it appropriately.

Jeff Jarvis at BuzzMachine has blogged several times over the last two months about his experiences with a new Dell computer. Tracking of blogosphere discussion of Dell following the initial Jarvis posting shows the viral (and powerful) nature of this space. This analysis post by Matt Galloway is particularly interesting.

With many US and European newspapers releasing daily podcasts of news, entertainment, reviews and background pieces to stories, it strikes me as odd that publishers here are not playing in this space.

I see podcasting as extending the reach of the masthead (brand) and that has to be good for the publisher, good for supportive advertisers and good for retail businesses like mine which rely on newspaper brand loyalty to lure customers in.

Given the investment in MX in Sydney last month it’s clear that News is interested in reaching the commuter marketplace. Stand at a station and count the number of commuters getting off the train with earphones in. I did this last week in Melbourne and was surprised. I don’t know what they are listening to – certainly not shows from Australian newspapers.

I only see upside for publishers playing with podcasting.

I’d certainly play in the space in my retail business if there was a economically viable model for providing download facilities and if I had sufficient commuter traffic across the front of my shop.

Ignoring podcasting will not make it go away – especially with the new range of mobile devices about to be launched.

A range of BBC television programs are now available for online viewing – as announced by the BBC.

While speed is an issue, it’s great to have access to this content in such flexible way.

This entry is further unscientific and anecdotal evidence that economically rational supply stops a retailer from reaching its potential.

This week we received 50% more of a weekly women’s magazine unexpectedly.

We decided to do a two day push and display the magazine prominently in our feature area as well as in the usual location.

The result is that by the end of yesterday, two days in, we had sold 20% more copies than we usually sold in a week.

The display took less than 10 minutes to put together and relied on the cover to sell itself. The additional stock allowed us to do the display.

While one could argue that the cover story is the reason for the success, I’d suggest that it may be a factor but not the factor. My theory is that there are many purchases of these magazines which are impulse and having the stock to display in the right place to attract the impulse decision is crucial.

This is why economically rational scale out decisions will push our sales down rather than grow them. We need spare stock so that we can invest the time and floor space in promoting product.

The extra sales from this promotion are doubly beneficial for us as we get to promote our magazine club card loyalty program and develop more long term relationships.

News Corp. is bidding for the portion of realestate.com.au which it does not already own according to this report (any many others).

“Within our lifetimes, the distribution of news and information is going to shift to broadband,” Arthur Sulzberger, Publisher, New York Times. BusinessWeek January 17, 2005.

I’ve gone back over sales data for my own newsagency to try and cost the financial impact on my business of lack of stock.

I’ve looked at sales achieved over the last three months when we have been over supplied a major weekly title. I have looked at the sales achieved in the last two or three days of shelf life of this product. I then looked at when we usually sell out when we receive our regular quantity.

Based on this I estimate that I am losing between ten and fifteen sales a week.

While this is less than $5,000 in business a year, it is actually considerably more than that. There is the cost of the add on sale which could have been achieved had the anchor product in their purchase plan been available. There is also the cost of losing a customer permanently.

If I had absolute control over my supply figures for weekly magazines, I would order at ten percent above the sales achieved in the previous six weeks. The scale out model used by publishers and distributors does not work for my business and I suspect many other newsagents. While it reduces wastage caused by over supply, it helps pushing customers to non newsagent outlets where stock is managed such that they have stock for the full seven days.

In an ideal world I would like to see a commitment to the newsagent channel that it is the channel of choice – meaning that the majority of newsagents will not be left without stock for major weekly publications for the entire on sale period.

By controlling stock in the newsagent channel as tightly as is done today, publishers are directing consumers to alternative outlets later in the week. This puts the newsagent channel at risk and it makes the alternative channels (including supermarkets) stronger.

Part of the publisher argument is that sales in newsagencies for weeklies peak in day one and day two. I have seen data from enough newsagencies to suggest that this is not the case in a significant number of newsagent outlets. I am seeing a spike day one and ay two and then good consistent sales through the week while they have stock.

In the newspaper side of my business it’s easier to get top up stock during the day. Since we started tracking lost trading hours (hours without a newspaper title on the shelf) we have increased sales. We cost the time without stock and with this are able to value the impact on the business.

The solution to this challenge of magazine supply lies in the data held in newsagencies. We have to unlock this in a timely way which allows publishers to limit their exposure to inefficient print runs and which helps newsagents maximise sales.

Interesting announcement from Fox Broadcasting Network that they are embracing podcasting (except they are calling ot Foxcasting) and extending their program brands to the mobile world. Their strategy is clever and a good use of the medium.

We received additional stock of a national weekly magazine last week and the result is an 80% increase in sales. With this title we usually sell out by day 5 or day 6 and last week, thanks to having stock, we were selling product on day 7.

While basing print runs on maximum is what the accountants in a publishing company will want, as a retailer there is nothing worse than turning customers away because you have sold your allocation.

You only have to turn someone away a couple of times for them to stop visiting your shop.