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Newspaper marketing

mX Sydney expands distribution

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I’m in Sydney tonight and picked up a copy of mX, the free daily newspaper from News Limited, at Wynyard station. It fascinates me how many people approach the mX distribution team for their free newspaper. mX is part of the evening ritual, the habit in ingrained. Only rarely do the distribution team I saw approach a commuter – this is a shift from when the newspaper was first launched in Sydney.

mX must have an impact on paid newspaper sales in that it is educating people that mX is all they need in a newspaper. Every copy given away is a message that newspapers should be free. Newsagents ought to head from their shops to Melbourne, Sydney or Brisbane at rush hour to see mX distribution first hand. To many newsagents it will be alarming.

Today’s mX announces a swag of new distribution points in St Leonards, Bondi Junction, Kings Cross and Edgecliff. The story on page two says the new locations have come “after we received thousands of requests from workers and commuters in those areas who had seen mX, but had not been able to get their hands on a copy”. The article also announces that they are installing new stands for self service – made available through an agreement with CityRail.

mX is a successful newspaper franchise across our three largest cities. It will be interesting to see where it goes next or whether the current offering evolves in the existing cities.

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Newsagency challenges

Beware of marketing group fine print.

Be sure to read the fine print of any marketing group agreement. Check out how ling you are locked in and the penalties for leaving the group. I saw one newsagency marketing group member agreement the other day with this clause:

For a period of one (1) year after expiry or termination of this Agreement the Franchisee undertakes not by itself or by its Directors or its Shareholders either directly or indirectly to join with or take membership of any group marketing/buying venture competitive with or similar to … provided that the Franchisee may conduct a newsagency business without restriction.

Okay, so the landlord requires the newsagent to be in a group. The newsagent joins XXX group. The newsagent decides, after a year or so, to move to another group and resigns. XXX requires the newsagent to sit out from any marketing group for a year. The newsagent cannot breach the lease requirement that they are in a marketing group and must stay with XXX. Catch-22.

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Newspaper marketing

New daily routines and the newsagency business

I am grateful to a colleague for pointing out an interesting story in USA Today about how commute times, workplace changes and other factors impact on our daily routines. While written from a US perspective, this store equally applies to Australia. Newsagencies are well placed to connect with changes in commute traffic given the hours we are open. The key is that we engage with the opportunity nationally. Read what the article says about Starbucks and Wendys for example. Could newsagents respond nationally in a similar way? We should.

The other aspect of this story is that these peak hour traffic trends will drive our suppliers – publishers mainly – to place product elsewhere, outside our channel. This, too, is something newsagents need to develop a response to.

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Newsagency challenges

Driving newspaper sales

sun_herald.jpgFairfax published a coupon in The Border Mail, The Illawarra Mercury and The Newcastle Herald last Saturday which, if redeemed at a newsagency the next day, gave the customer the Sun Herald for $1.00. This 44% discount is significant. It is interesting to see a promotion aimed at driving retail sales.

Most cover price discounting is around subscription offers. Maybe the Sun Herald on Sunday had a big home delivery push – I haven’t seen the newspaper. Given that newsagent commission on the discounted copies was maintained at a pre discount rate, Fairfax grossed 55 cents per copy. This is a 59.25% discount off their usual gross.

Given the inefficiency of newspaper sales in newsagencies – around 70% of all newspaper sold are sold alone – I’d prefer to see a newspaper publisher drive sales of their product by partnering on a deal which also drive sales of another product in my business. Ideally, the partner product would be a stationery item – at least something away from the convenience line. That said, if the only option I have is a deal like the one tried last week then I’d embrace it and try and build something myself around the pitch.

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Newspaper marketing

News Ltd kicks an own goal

News Ltd appears to gave kicked an own goal in NSW with their Travel Australia DVD giveaway at the weekend. Newsagents are hunting down space copies so they can satisfy customer requests. The TV advertising appears to have been less than clear as Jarryd Moore comments at his blog. Newspaper promotions are meant to support not damage a brand.

In Melbourne it was a different story – News Ltd gave away the Make Poverty History DVD with the Saturday Herald Sun. Customers loved it. In our newsagency we had plenty of stock and enough spares for customers coming in today even to collect their free copy – nothing unusual in that since most News Ltd Victorian promotions are well managed.

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Newspaper marketing

Selling newspapers at Melbourne railway stations

Is one of Melbourne’s two newspapers about to engage major railway station based marketing initiative? A check of this ad posted yesterday afternoon at at seek.com.au suggests so.

We are currently on the hunt for new team members to assist one of our largest clients with their new customer program.

Work will be located at outer metropolitan train stations from 5.30am to 8.30am Monday to Friday. Acting as an ambassador for this iconic Melbourne media product, you will act as a contact point for commuters to purchase their daily news hit!

If you are looking for a role that has it all- working in the great outdoors, being a COMPLETE hero as you ensure the public get their favourite media product and finishing work just in time to watch everyone else start then apply now!

Work locations include: Bayswater, Berwick, Cranbourne, Hallam, Broadmeadows, Oak Park, Preston, Regent, Carnegie, Hughesdale, Albion, St Albans, Mooroolbark & Mt Waverley.

$20.00 per hour + available incentives to reward hard work and loyalty.

If this is for a newspaper why are they hiring and not the local newsagent?

When I first read the ad I wondered if it was to distribute MX (the free daily newspaper) in a morning edition. But the ad text makes it clear this is about selling something.

If my suspicions are right and this is for a newspaper publisher sales initiative then I’d be interested to understand where newsagents fit in the model and whether there has been consultation.

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Newspaper marketing

Ads on the front page

Mark Friesen, a news designer at The Oregonian in Portland, Oregon reports at his blog about the consideration being given at The Los Angeles Times to start permitting advertisements on the front page.

I should send Friesen a copy of The Age with ads and a post it type ad stuck on the masthead.

I wonder what designers within Fairfax would say about the debate in the US.

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Newspaper marketing

Prince flips the model, goes free with a newspaper

With print media and the music industry both chasing rainbows online it is interesting to see Prince giving away 3 million copies of his new CD, Planet Earth, with The Mail in London this weekend. Here is what his website has to say, in part:

Always a musical innovator and icon, Prince is once again leading the charge into a new music distribution landscape, redefining tradition and setting new precedents. As well as having taken the innovative step of giving copies of his new album “Planet Earth” away with concert tickets to his London O2 dates, Prince has new plans of putting music directly into the hands of fans. In association with the Mail on Sunday publication, Prince will deliver his new album “Planet Earth” to nearly 3 million readers in the UK on July 15th.

This plan has shocked the music industry and set local retailers into chaos causing major controversy about the new future of music retailing as presented by Prince.

Kenyon Farrow makes some good points about the move by Prince at his blog.

While a free CD from Prince will not, of itself, alter the commercial fortunes of newspapers or music, it will be disruptive enough to get music and newspaper bosses looking outside the square as they navigate their future in challenged marketplaces.

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Media disruption

The Age gets better at stuck on ads

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I missed this stuck on ad in The Age on Saturday as it was not on my home delivered copy. At least this time they are not covering the masthead or a headline.

As a retail newsagent I wish I could offer my regular customers a deal like this. All this promotion seeks to do is shift people from being my customers to home delivery – higher cost and less of a return from anywhere else.

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Newspaper marketing

Newsagent whacked by publisher over home delivery

Following a thorough analysis of all costs associated with the home delivery side of his business, another newsagent has handed back the territory to the publisher. While only small, around 100 newspapers a week, the run was operating at a loss of $9,000 annually.

The newsagent proposed to the publisher that he develop his sub agents by investing in display and other materials for their businesses and that he invest in his on business to increase newspaper sales. The plan was well thought out down to a budget.

The newsagent presented his business plan to the publisher and expected their agreement given that the small number of customers could be serviced elsewhere.

The publisher responded by taking not only the home deliveries but the sub agents as well as making the retail side of the newsagency a sub agent.

While the publisher may have contractual rights, such action does not make sense. They have turned their back on someone wanting to grow newspaper sales in favour of maintaining tradition.

Publishers say they want newsagents to become business people and when one does they cancel their contract and send them to sub agent jail.

Where is the business sense in that?

In this specific situation, the publishers have demonstrated that business skills are not important. For an industry in crisis as Rupert Murdoch calls it, such action is disappointing.

Publishers need to embrace the whole pie of deregulation and not just the pieces they like.

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Newsagency challenges

Great local marketing in Armidale

Here is a good example of good local marketing by a newsagent. Ewan and Rod Carr at newsXpress Armidale discovered local tomatoes featured in Australian Country Style. Customers buying the magazine go in the draw for a free tray of Guyra tomatoes.

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It is always good to see newsagents engaging with their local community in this way.

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Newspaper marketing

The newspaper home delivery subscription rip off

Newspaper home delivery in Australia is an addiction newspaper publishers cannot shake. They appear prepared to give away anything to get a customer on board. Then, once a customer has fallen off at the end of an offer, they go back with the same heavily discounted offer to win them back. With deals of 50% and more off cover price it is no wonder the home delivery deals are popular.

The problem is that small business newsagents are funding a disproportionate part of the subscription deals. Following my post a couple of weeks ago about newsagent concerns about the Home Delivery of the West Australian, I received several emails from newsagents in South Australia documenting the falling return achieved from home delivery of the Adelaide Advertiser.

Some Advertiser home delivery deals result in South Australian newsagents receiving 11 cents for the delivery. Out of this they have to fund delivery drivers, plastic wrap and other business overheads such as fuel, management time and collection expenses.

Years ago, the same newsagents would have received 25 cents plus a delivery fee of around 7 cents a day – 32 cents in total.

It is only since deregulation of the newspaper distribution arrangements, as instigated by the current Federal Government, that News Ltd has driven newsagent newspaper home delivery revenue down by, as the South Australian example shows, up to 65.6%. Newsagents cannot afford this. While News Ltd has been cutting newsagent revenue, wages, fuel and overheads paid by newsagents have risen.

Below is a table prepared by a newsagent showing the annual cost to South Australian newsagents of the News Ltd cuts in home delivery revenue. If the data feeding into this table is accurate, South Australian newsagents are $500,000 down annually. This is off the bottom line. Some have suggested to me that this analysis is conservative and that the numbers are worse.

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What is happening in the newspaper home delivery space and to newsagents in particular demands a Government inquiry. In 2004 I called for a Productivity Commission inquiry to follow up the impact of deregulation on the newsagency channel. This latest data out of South Australia and the evidence that newsagents are 65.6% worse off today than prior to the Government driven changes suggests an inquiry is warranted.

While some will say that the reduction in revenue is a result of competition I would observe that there is no competition for home delivery of newspapers. I’d also note that while News Ltd has been charging less and less for home delivery of newspapers, advertising rates charged by News Ltd have increased annually. News Ltd is covered – newsagents, who have no control over their revenue are not.

Small business newsagents have been disempowered by government deregulation and one has to ask whether that is good competition policy at work.

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Newsagency challenges

Trading Post for sale?

The Sunday Age reports that the Sensis (Telstra) owned Trading Post is for sale – their newspapers and online business. As I have posted here recently, over the counter sales in newsagencies of the Trading Post have been falling in recent years – as much as 25% of the last year. The Age report says that Sensis reports a 7% decline in revenue in the six months to December.

The days of classified ads in print are over. Counting eBay and all other online sites, we know that 100,000 ads are placed online every day by Australians for anything from a CD to a house and while some of these ads are placed on multiple sites, the majority are not getting into print. Online is the game in town.

I know that many working for newspaper publishers will disagree with me. They have to – they want newsagents to believe that the print classified model has legs because they need newsagent support. Time will show that I am right just as it is already showing this to be the case in the US.

Advertisers of CDs, books, cars, homes and jobs what a faster outcome than a newspaper can provide. They also want to represent their items better – with photos and video. Today, the print edition of the Trading Post exists only to promote the brand of the online website, it’s relevance is coming to an end.

If I were the folks at the Trading Post I would move to a free model. A nationally distributed free newspaper would at least maintain the brand and provide an opportunity for a more active migration to the online edition.

The fall in stakes of the Trading Post is a reminder to newsagents about their need to have an online connection. This is one reason I created Find It online classifieds. We are writing to newsagents this coming week with an update including news about the revenue share with newsagents once we come out of beat in a few weeks. Smart newsagents will quickly make more from Find It for no financial outlay than the make from the Trading Post.

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Media disruption

News Ltd IT data project briefing

At Tower Systems’ head office this morning we participated in a briefing with News Ltd management about IT changes they are driving as part of their Data Collection Project. We are supportive of the project because, if executed properly, it should result in better business outcomes for newsagents. I’ll respect agreed confidentiality and not publish the detail of the discussions.

While it commercially suits me for newsagents to rely more on technology, the reality is that any advancement which eliminates manual processes has to be good for newsagents. For the first time it will provide newsagents and News Ltd a common database and thereby improve service of home delivery customers.

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Newspaper marketing

Newsagents fight The West Australian newspaper

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Small Business newsagents in Western Australia are being forced to carry the cost of marketing campaigns run by The West Australian newspaper. They have established a fighting fund and have engaged lawyers to fight on their behalf following refusal of management at The West Australian to give back what they have taken away.

The current 26 week home delivery deal for requires newsagents to deliver The West for no delivery fee, leaving the newsagent to rely on cover price commission to cover distribution costs and provide a profit margin to the business. The problem in WA is that commission for newsagents is lower than elsewhere in Australia. I have heard of newsagents receiving as little as 16% commission – rarely is it above 20%. Back home on the eastern seaboard newspaper commission for newsagents is 25%.

By not paying delivery fees to newsagents for this subscription offer, the publisher of The West is taking around 60 cents away from the newsagency for each new customer. While that may not sound much, to a small business relying on this fee to cover labour, fuel and management costs it is significant. Newsagents can’t afford to lose this fee.

Newsagents were not told of their loss of a delivery fee until after the promotion commenced.

The West, on its pages, champions small business issues yet behind the pages they are ripping small business newsagents off. They are making newsagents carry the cost of their marketing strategy. The West ought to carry the cost of their marketing and not small business newsagents.

In Perth today I have talked with several newsagents about this issue. The financial and emotional cost to newsagents is significant. Some are at breaking point. It is a catalyst for at least one newsagent having their territory back to The West after decades of service.

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Newsagency challenges

The Chaser sticks it on Fairfax

Thanks to a colleague newsagent I can give you the link to The Chaser TV team confronting Fairfax CEO David Kirk about the awful stuck on ads they persist in selling to cover the mastheads of The Age and the Sydney Morning Herald.

Apparently there is another stuck on ad today – I’m in Hong Kong at present and so cannot record a photo here.

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Newspaper marketing

International newspaper sales

newspaper_direct.JPGCatching up on my brief time in Thailand this week and came across this photo I took at Bangkok airport. It’s a stand right next to the counter. They print and bag current editions of international newspapers under the Newspaper Direct banner. It’s in an ideal location and in my brief time in the shop I saw three papers sold.

I’ve seen these Newspaper Direct stands plenty of times but the newspapers were not in sealed plastic bags like in Bangkok. It’s a good idea.

I know of a couple of Australian newsagents playing in this space – not sure how it’s going. For my money I prefer to connect with Australian news online when I travel – it’s more up to date and cheaper.

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Newspaper marketing

Life as a sub agent

BRW_rich_list.JPGI know that publishers are concerned about the increasing number of newsagents selling their home delivery business and retaining the retail operation. The concern arises from the changed relationship when the retail outlet moves to sub agent status. The key to retail only newsagents providing support on a par with when they were not sub agents lies in the management of the relationship by the supplying newsagent, the retailer and the publisher.

While I don’t like the promotions which seek to reduce my retail sales in favour of home delivery, I still participate. For example, yesterday we gave away a Herald Sun promotional bag with every Herald Sun sold. The goal of the promotion was to drive home delivery uptake.

Another example is the bold BRW display we have done to support the BRW Rich List special edition. The aisle end is a prime location and most sub agents would not give over such real-estate freely. We do because we see it as a way of demonstrating our relevance to titles which are in the news. So it’s a win win.

This issue of how to handle newsagents who become sub agents needs to be addressed at a high level between newsagents and publishers. It is increasing and some guidelines could avoid disputes and facilitate more the win win I am talking about.

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magazines

Ads before the newspaper masthead

The Age and Tattersalls are supporting their cross-promotion with an ad stuck on today’s newspaper masthead. So much for promoting the content of the newspaper.

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The continued use of these front page newspaper mast head ads demonstrates that editorial is not in control of the product.

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Newspaper marketing

The Form – no strings

I picked up a copy of The Form – the new free racing newspaper from Fairfax – this morning at Sydney airport. No requirement to pick a Sydney Morning Herald as well. While the airport is an unusual case with Qantas offering free newspapers at departure gates, some newsagents tell me they cop flack when they tell customers that to get the freebie they have to buy the ‘parent’ product. It was the same when News Ltd launched Alpha. Eventually newsagents allowed people to purchase Alpha without requiring a News Ltd tabloid purchase.

If Fairfax really wants The Form to reach its potential it needs to set it free to find its own audience.

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Newspaper marketing

Are the DVD giveaways helping newspapers?

In 2005 Rupert Murdoch said of DVD giveaways

:”People grab (the newspaper), tear the DVD off and throw away the paper. They’ve got to learn. That’s got to stop.”

According to Phillip Stone, writing at follow the media, last year News International cut back on the DVDs and newspaper sales fell by 500,000. Newspapers which did not cut back on DVDs did not report similar falls.

So, even though newsagents are frustrated with the DVDs – especially when scale out is insufficient – they are clearly a necessary evil.

The same article also has good coverage of the impact of free daily newspapers on paid for sales.

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Newspaper marketing

New size for Fairfax broadsheets

The announcement by Fairfax CEO yesterday that they are resizing The Age and the Sydney Morning Herald is great news. The change will suggest the paper is moving with the times – that it’s on the move. While it doesn’t address the migration of advertising from print, it could slow the migration by making the product more convenient.

The folks at The Guardian in the UK moved from Broadsheet to the more compact berliner format with great success. In researching recent newspaper format changes I came across this blog post from Jeff Jarvis. It’s worth reading, as always from Jeff – his passion for newspapers and journalism is an inspiration. His work with publishers like the folks at The Guardian affords us an insight into navigating change like that now being discussed by our own Fairfax.

While there will be challenges for newsagents in the new size – distribution and retail – it’s change for the good. One of the reasons newsagencies are less important to consumers today (ACP and Hallmark data) is static core product. When Fairfx does launch the new size we can make a big noise and hopefully attract some new customers.

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Newsagency challenges