You have to wonder who made the decision to move the newspaper stand in the Safeway supermarket which resulted in a four fold increase in returns. I bet it’s back in its old spot within the week. It’s another reminder to publishers of the disciplines of newsagents compared to the arrogance of supermarkets.
A newspaper publisher asked the software company I own, Tower Systems, to develop an enhancement to our newsagency software to help them and help newsagents. As usual with such publisher requests, there was no offer to cover our costs – development, testing, roll out and support will cost us more than $15,000. The cost would be less if we delivered the enhancement as part of our next scheduled software update – due in September. Rather than wait for our scheduled update, a representative of the publisher clumsily emailed us two days ago, talking about a competitor…
… have told us that they have completed building this new functionality into their system and are working with us to test it now. I imagine they will be trying to market it with their new software shortly as it poses quite a benefit for newsagents.
It is disappointing that a publisher posting a multi billion dollar profit result expects small business software companies like mine to develop and deploy functionality exclusively for them and to a time schedule to suit them. It is offensive that one of their representatives tries to make out that a competitor is better than us because they may deliver this one change ahead of us. We have responded the only way we can – by taking our software developers off newsagent requested enhancements and putting them on the enhancements required by the publisher.
I and my company have been good and faithful servants of newsagents, publishers and their other suppliers for more than twenty five years. Sometimes, newsagent supplier behavior makes me question why I remain involved. This forum at least allows the opportunity to vent.
NSW newsagents were finally granted a small increase in home delivery fees they can charge for the delivery of Fairfax newspapers last month. I’m told that recent research shows that this increase still falls short of the actual cost of providing the service by up to 50% in some areas and as little as 10% in other areas.
Newspaper executives in Australia and elsewhere have commented on the efficiency of the newspaper home delivery model in Australia. Our penetration is deeper than most other countries.
This success with newspaper home delivery is, in the main, due to newsagents subsidising the home delivery service.
The inadequacy of the latest delivery fee increase in NSW is another reason more newsagents will sell or abandon their round.
Since we started trialing this Herald Sun stand, the number of newspapers sold alone has dropped significantly. The number of newspapers sold continues to rise. We still have our main newspaper display, the unit in the photo is at our lottery counter. Lottery customers can easily impulse purchase the Herald Sun and Herald Sun customers can impulse purchase lottery product.
As the habit of newspaper purchase is further challenged, we (newspaper retailers) need to be smarter in getting customers to purchase. This stand places product front on and in a way which facilitates pick up. While it might be small point, the experts say that a consumer picking up a product is for more likely to purchase than just looking at it.
Newsagents can take the “oh, woe is me” approach and worry about the future of newspapers or then can be entrepreneurial and be smart in every decision about newspapers and grab every sale they can in this challenged marketplace. I just wish that the publishers would handsomely reward newsagents who achieve above industry average sales growth as this would encourage business like behavior by newsagents.
The display stand we are using has been provided by the Herald and Weekly Times following my approach to them with photos of similar stands I saw in the UK last year.
I made a rare use of Melbourne’s train system yesterday evening to get to the MCG for the Collingwood Hawthorn AFL game. In one carriage I counted more than 50 copies of the day’s MX newspaper left on seats and on the floor. That suggests the train probably had close to 300 discarded copies of MX. Multiply 300 by the number of trains used during peak hour and the operators cold be dealing with anything from 25,000 to 50,000 copies of MX discarded every day. Is this a problem with free commuter newspapers globally or is what I saw local to my train line or local to Melbourne? I’d be interested to find out whether trash is a problem with free commuter newspapers and if so why are we not hearing about it? I should note that there were only two other items of trash on seats of the floor in my carriage.
News Ltd has replaced websites for three of its newspapers: Herald Sun; Daily Telegraph; Courier Mail. The new common design is modeled on the Perth Now site which launched three weeks ago – curiously in Perth where News does not have a daily newspaper. News Ltd websites for The Adelaide Advertiser and Hobart Mercury remain unchanged. Even though the roll out has not been national, this eastern seaboard launch demonstrates the national control of News over its online strategy compared to the more traditional News state managed approach. The new design is clean and easy to naviagte. I particularly like the opportunity to comment on the new design at their blog.
The Age today starts its second bid2buy online auction promotion. The first was in November last year. These auctions use technology developed by CityXpress, a provider of event auctions, marketplaces and online classified solutions for newspaper publishers. It’s a good promotion in that it offers consumers, through the newspaper, an opportunity to access product at a discount, or perceived discount at least. I don’t see much long-term value in this type of promotion for the newspaper. Smart consumers will realise that using a newspaper to promote an online auction adds to the cost. Further, it potentially turns offline consumers online and runs the risk of diluting the value of future newspaper advertising by the companies supporting bid2buy. While bid2buy creates a buzz for the newspaper I cannot see it doing much more. Id like to see is Fairfax would run bid2buy if (when) they bring TradeMe to Australia.
The Scotsman is using satellite tracking to get newspapers delivered on time. Very smart and good to read of innovation around newspaper distrinution for a change. Source: vnunet.
The Age today has another Post-It ad placed on the front page, this time for the ANZ. While how The Age presents ads is their business, I’d note that their increasing use of Post-It ads is frustrating consumers. Some list the ad and leave it at the counter, usually grumbling something as they do.
I question the damage to the brand both from those frustrated with the perceived intrusion of the Post-It notes and from the focus it pulls from the masthead itself.
One the same day a 20 cent cover price for The Age hit, they includes this Post-It note offering 50% off for weekend home delivery. This shifts margin from newsagents since newsagents make less from home delivery than they do on retail sales.
While The Age has can engage in any marketing they deem appropriate for their title, it is disappointing that newsagents wear the cost through. The promotion yesterday is like that of an indian giver. They proudly tell us about the cover price rise and then sneak this margin reducing promotion in through the back door.
We received a phone call last week at Inkfast, our online ink and toner business, from a daily newspaper offering a display advertising deal for an upcoming end of financial year business feature. The cost was $5,000. We have built Inkfast to a $1 million a year business in eight months based primarily on a pay per click advertising campaign. We ran a test campaign based on faxes to accountants and another using radio 3AW. Neither came close to delivering the traffic of the pay per click campaign.
The offer from the newspaper was compelling. A decent size display ad for $5,000. We could expect a readership of several hundred thousand, well the newspaper could. Who knows what our page could attract. The salesperson from the newspaper called five times over three days despite us saying that we would get back to them if we were interested. In each call the pitch was more urgent. The last call was rude.
We established our pay per click campaign without the use of sales people. We did it all online and are able to tweak the campaign at any time as we choose. This flexibility and the outcome focused pricing is ideal for our business model.
We know that $5,000 spent on pay per click advertising for our business lands more than 5,000 people on our website and most are searching for what we sell. We only pay for them to step through the door whereas with newspaper advertising we pay for the right to be near traffic.
For the newspaper approach to work we need a good ad whereas with pay per click the website does the work, there is no middle creative point which could be a further barrier. Also, pay per click puts us in front of people when they can best respond – they are online. A newspaper ad for an online business means they either have to write the URL down or tear out the ad or remember the details.
We decided not to take up the newspaper offer. While we do want to experiment away from our pay per click model, this newspaper offer was not right for us.
That was late last week. Over the weekend I have been considering this experience with Inkfast in the context of my ownership of a newsagency. At my Forest Hill (Vic) shop, newspapers are one of the top two traffic generators. I feel as if I have betrayed myself and my newsagent colleagues in the decision but I know it was the right decision for Inkfast. More and more businesses will decide that newspapers are no longer an appropriate advertising medium.
I can feel the ground shifting from deep underneath.
Age customers were annoyed yesterday by the post-it ad on the front page. Many pulled the ad off and left it at the counter. Several had questions about the subscription offer (which we could not answer). I’m not that thrilled by a campaign which stands to cut my retail sales and profitability of the title. A better return could be achieved with a loyalty offering for regular retail customers.
Further to my post a couple of days ago about the San Jose Mercury publishing print ads online, I am reminded that the Melbourne Observer publishes the whole newspaper online as a PDF file. They have been doing this since September 2002. They tell me: “anecdotal evidence suggests that many Melbourne people who are introduced to the paper via the Internet, convert to becoming newsagency customers to buy the Melbourne Observer ‘hard copy’ each week”. The Observer is a popular title especially among the demographic frequenting my newsagency. What I appreciate is their support in the pages on the newspaper. This builds loyalty from retailers and consumers. Another Observer feature gaining more attention is their free classifieds. With the demise of Trade and Exchange I’d expect this to grow in popularity.
The San Jose Mercury now publishes print ads online. Check out this ad from Freemont Toyota. You can click on parts of the ad for greater detail. While the move may seem like a backward step, it enhances opportunities for advertisers and extends the reach of the newspaper brand. In the US where consumers are coupon crazy I see this move as being smart. Here, I am not so sure. I have looked around and cannot find an Australian newspaper doing the same thing.
Today is further proof of the growing impact lottery jackpots are having on newsagent traffic. The various lottery businesses changed the Tuesday game last year so it leads to more jackpots. On a day like today, when a $6 million prize is on offer, we see a 33% increase in sales and good flow on business for impulse purchases such as newspapers and weekly magazines. The lottery ticket is the destination and products which used to be core are the add on. Smart newsagents leverage the opportunity. Smart suppliers like ACP Magazines and News Ltd have provided newsagents with some excellent display tools to help leverage the impulse purchase of their magazines and newspapers (respectively) at the lottery counter. The downside is the drop back in traffic and sales when there is no jackpot of the Tuesday.
Some confusion among those purchasing The Age Wednesday when they saw this Post-It Note advertisement on the front page. At least a third asked what it was about and while the interaction was welcome, it’s not our job to push AXA. Plenty ripped the ad off and handed it to us. With some forethought and appropriate reward newsagents could have played a part in the AXA advertising campaign.
According to the Microsoft issued press release the New York Times developed Times Reader (shown above. Image source: Microsoft) will greatly enhance online readability of NYT content. The release claims the reader has a newspaper look and feel with continual updates and other online benefits.
“The Times Reader is a great next step in melding the readability and portability of the newspaper with the interactivity and immediacy of the Web,†said Arthur Sulzberger Jr., chairman of The New York Times Company and publisher of The New York Times. “We continually look for new ways and the latest technology to deliver our distinctive brand journalism to satisfy our audience’s changing expectations for consuming media.â€
This announcement by Microsoft and the New York Times connects two very strong businesses for mutual benefit. Kudos to them. While it will encourage some to remind us that newspapers have a bright future, the reality is that Times Reader is offered as candy, to move offline consumers online. By enhancing the consumer experience of the New York Times branded content online people will make the transition from printed page to online. Given Sulzberger’s previous comments, this has to be his holy grail. Makes sense.
From a selfish Australian newsagency perspective, where more than half my current foot traffic is for newspaper purchases, I’d like to sell prepaid access to newspaper websites and thereby help the transition. It’s better to ride the wave for a bit than be dumped early in the roll. In the meantime I and others continue to evolve our retail newsagencies in response to the changing world. Unfortunately we’re in the minority.
The International Herald Tribune reported a couple of days ago about the latest e-ink developments including details on commercial tests later this year. Great news for publishers. Less borders = easier entry anywhere for international brands. Another challenge for newsagents to address.
Considering the newspaper circulation data published last week and knowing the data newsagents gather, it would be easy to report on sales by title by day of week for any period and to break this down by newsagent, home delivery and sub retailer. For newsagent sales one could even report on down to quarter hour intervals. This type of paid copy sales data would have to be better than ‘circulation’. This data has been available for years. Around 50% of newsagents have a current industry approved computer system. In Victoria this is closer to 100%. The data is recorded according to industry agreed standards.
I use this data in my own newsagency to measure and grow newspaper sales. From a business perspective I can bank on paid sales whereas I cannot bank on promotional copies.
The Manchester Evening News is to close it’s ‘lite’ edition and give away 50,000 copies of its regular product in Manchester according to this report at HoldtheFrontPage. It’s an interesting move which I am sure will be watched around the world.
When newspaper distribution was deregulated in 1999, newspaper publishers negotiated contracts with newsagents to distribute newspapers. Contracts covered home delivery, retail and distribution through sub retailers (sub agents) and they continue today at the behest of publishers. This means that newsagents are the only conduit through which paid circulation passes. Newsagents provide sales data to publishers at least weekly, giving publishers accurate data for sales reporting across their three key paid copy distribution channels of: home, retail and sub retail. I would have thought that advertisers would be more interested in paid for circulation data rather than the current ‘circulation’ data available.
I make these comments in the light of recent circulation figures claimed by publishers. I am curious as to where the sales increases have been achieved.
It’s been suggested to me that News Limited and Gloria Jeans have reached agreement to sell the Daily Telegraph (and probably other News papers in other cities) in Gloria Jeans coffee outlets at 50 cents. If it happens it would follow the Fairfax Starbucks deal. It would be nuts as it confuses consumers and discounts the value of the masthead. In my own situation, my second shop and two other outlets sell The Age at full price while Starbucks a few feet away sells it for 50 cents. Sales in the centre have not risen since the move.
It’s interesting to compare this story in The Australian last Thursday with this story at the website for The Sacramento Bee published on Sunday. While the story by John Lehmann in The Australian is upbeat and glosses over then impact of the Internet and disruption generally on newspapers, Dale Kasler’s piece at The Sacramento Bee is sobering and provides examples of how the economic model of newspapers has changed.
Newspapers reporting about the future of newspapers is a challenge. Overseas you’re more likely to see stories like those by Kasler, whereas here in Australia Lehmann’s approach is more common. I wonder if that’s publishers protecting each other or whether it is ignorance and fear.
The economic model for newspapers has changed. One only has to look at their investments in the last year in online businesses to understand the where publishers see the future. That is not to say that newspapers will die. Rather, they will morph from their current focus to a new model based more on analysis and opinion. This will bring a different type of advertiser. Stories like that from Lehmann perpetuate a spin which hides the real story.
I’d like to see Australian journalists report more completely on the impact of the Internet on newspapers. The better we understand the impact of change as being experienced in the US, and to a lesser extent Europe, the better we can manage and, indeed, embrace change here.
I own a newsagency with two retail outlets. I’m not concerned about the impact of the Internet on newspapers. This change presents an opportunity I’m ready to embrace.