NEWSPAPERS -- A HARD HABIT TO BREAK

 











For the last few years, newspapers have borne the brunt of declining fortunes while their circulation erodes as quickly as the sands on a beach facing a tsunami. But the reality is far from the perception that newspapers will disappear.

A recent study by Scarborough Research points to a healthy print/internet readership that will remain a media force for some time to come.  Aggregation news sites that include the likes of Drudge and the Huffington Post, while performing well, are not hurting strong newspaper options.

Among results from the study ....

74% of the adult population read newspapers in print or online

79% of white collar adults read newspapers in print or online

82% with household incomes over $100k read newspapers in print or online

84% of college grads read newspapers in print or online each week

While circulation drops are real, audience readership has not registered the same declines and is holding up well in spite of increased media fragmentation.

The longer term solution for the survival of newspapers appears to be a business model that fully embraces the online potential with a web-first publishing format.

The multi-cultural publishing base is also benefiting from a strong reader loyalty -- especially among the Latino community, 49 million strong, representing over a trillion dollars in purchasing power and growing at a rapid pace.

Spanish language newspapers enjoy 50% more readers per copy than mainstream English-language papers according to the National Association of Hispanic Publications. Contrary to current consciousness, Hispanic youths are loyal to their Spanish-language papers preferring entertainment and political sections. 

Marketers take notice ....It is estimated that 82% of Latino's read and share their paper with a least one other person.

Not too shabby for what is perceived to be a declining market.

FELIZ NAVIDAD

As we close out 2009 and enter 2010, we begin to reflect on the past and look to the future for growth, prosperity, health and happiness.

The United states has been a cultural melting pot spawning generations of culturally rooted families from around the globe. From Europe and Africa, the Middle East and Asia, we are as culturally diverse as Walt Disney's "It's a Small World".

Standing out from all cultures in terms of growth and impact on our economy has been the Hispanic (or Latino) community. Today, over twenty countries in Central and South America, the Caribbean and Mexico contribute to the Latino population in the U.S. accounting for 15.5% of the U.S. population ..... not an insignificant statistic.

And the number is growing rapidly.

Results from the 2010 census is expected to raise eyebrows as many believe the number of Latinos will rise from an expected 47 million to between 50 and 52 million.

According to the census, the Hispanic-origin population contributed 39 percent of the Nation's population growth from 2000 to 2010, projected to 45 percent from 2010 to 2030, and a whooping 60 percent from 2030 to 2050 (accounting for at least 25% to 30% of the U.S. population).

The political and economic impact of the Latino community as it relates to marketing strategies cannot be overlooked. To do so would court disaster..... and delivers a holiday gift for those marketers that have already recognized the future bonanza.

Happy Holidays!

MAGAZINES -- DISPLACE OR REPLACE?

Berg and Bonier R&D out of London have been experimenting with concepts for digital magazine publishing. The project, Mag+, explores both consumer habits and business needs to make the digital magazine reader experience more insightful and rewarding.

The reading device is much like a Kindle or Sony Reader on steroids. The video below provides an excellent overview of the device and the "layout" for published content. The overall result is a handsome attempt to drive magazine readers away from the printed page and onto the digital band wagon.

As old habits die hard, there will likely be resistance and slow acceptance of a digitized magazine format. Some of the experience will be lost as other benefits come into play. For consumers that are growing up with, and those that are embracing, the digital age, the experience will be a good one. For others that enjoy the tactile experience, not so much.

Are we trying too hard to move the consumer away from one platform to another? One will not mirror the experience of the other as we attempt to make a migration painless for both publisher and reader. Taking a lesson from history, television did not replace radio, the cell phone has not replaced the telephone and FOR SOME TIME TO COME, MAGAZINES, BOTH DIGITAL AND PRINTED VERSIONS, WILL LIVE SIDE BY SIDE, each catering to a distinct audience.

Displacement in the pool of media options is an ongoing phenomenon. Replacement is a rare event.

Mag+ from Bonnier on Vimeo.

SORRELL'S PREDICTIONS

The number of high ranking executives at the holding company level, willing to step outside the comfort of their well furnished offices to "tell it like it is" are few and far between.

Except for Martin Sorrell.

At a recent UBS Media Week Conference, Sorrell covered topics that ranged from short-sighted media price guarantees (in a volatile market) to digital media and global emerging markets.

Espousing the danger of taking comfort in a 25 percent decline in revenues he suggested those companies would be out of business in three years. Citing a forecast of a 1 percent global expansion in spending and pointing to Interpublic's forecast of 6 percent growth as "rogue", he suggested the economic climate is "more, less worse".

Turning to the digital landscape as "the driver for growth", Sorrell does not believe firms like Google can sustain long term traction as an advertising company and that the phenomenon of Facebook and Twitter will be short-lived, replaced by the next new social trend.

Sorrell's crystal ball is not that far off.

Price guarantees in this (or any other) economy by ad agencies for media time/space is at best insane. CPMs in the broadcast market have gone up while digital auctions through the on-demand platforms are commanding premiums for hyper-targeted impressions. Betting on media futures is not a good thing.

Twitter recently experienced a drop of 3 million users and activity among current users is declining. Facebook is still bleeding and MySpace is slowly withering away. The social networks have yet to discover the value of audience data applied to the millions of eyeballs they generate. I would venture that applications developed for the Twitter platform are making more money than Twitter ever will.

Reading what is in the cards today, right or wrong, however, will quickly be forgotten in anticipation of the early signs of a modest recovery.

HOW NEWS COMPANIES WILL PROSPER

The controversy and sparing between newspaper companies and aggregation sites was recently highlighted in an editorial by Arianna Huffington on her site The Huffington Post. Taking aim at Rupert Murdoch's call for pay walls, she handily convinced her audience (albeit a web audience) that pay walls are not the answer.

Maintaining journalistic excellence while making a profit is becoming increasingly impossible for news companies that cling to a print-only business model.

There is hope.

At today's gathering at the World Newspaper Congress in Hyderabad, India, over 1500 participants heard how a news and information company in the U.S. is transforming itself to become a digital savvy operation that turns the old print-only model on its ear while projecting record profits. This company successfully reverse-engineered the production and, importantly, the distribution of content looking to the web first and print last.

John Paton, Chairman and CEO at ImpreMedia, the largest Hispanic News and Information company in the U.S., passionate about journalism, the communities he serves and his dedicated employees, provided his audience with a road map for what appears to be a successful embrace of the digital landscape before us.

His speech can be read here. I urge you to read it.

In closing, Mr. Paton also announced new initiatives for hyperlocal media efforts extending to local communities in New York and LA via community blogging partnerships. ImpreMedia will establish E-Journalism Media Labs and shepherd key community bloggers to address the importance of hyperlocal journalism.

NEWSPAPERS - AN OPPOSING WORLD VIEW

The World Newspaper Congress begins its sessions today in Hyderabad, India and will touch upon a number of pressing issues from journalistic freedom to the impact of the web on newspaper fortunes.

That newspapers are facing a disappearing act has been long argued in the face of declining circulation. The following presentation from the Congress provides alternative views....

At no time in the foreseeable future will digital advertising revenues replace those lost to print, making the search for new business models including paid-for online access for news ­ a pressing concern for the news publishing industry, the World Association of Newspapers and News Publishers said in its annual world press trends update.

As search engines take the largest slice of advertising revenues, little is left for the content generators themselves. In a 182-billion dollar press advertising industry, digital revenues of newspapers accounted for less than 6 billion dollars last year and are forecast by to grow to no more than 8.4 billion dollars by 2013.

At the same time, print advertising is expected to decline and that by 2013, combined print and digital ad revenues will be less than print only ad revenues were in 2008.

"These forecasts, similar to those made by Zenith and others,demonstrate quite simply that at no time soon will digital advertising revenues come close to achieving the sort of revenues required, by many, to compensate for falling print revenue," said Timothy Balding, co-CEO of WAN-IFRA. "So that answer will have to be found elsewhere. Should these forecasts come close to being true, new business models will have to be invented."

"If newspaper companies wish to maintain their strong content leadership, someone is going to have to pay. It looks like we have to solve the digital payment issue ­and soon," he said.

The annual world press trends survey was presented Tuesday at the World Newspaper Congress and World Editors Forum in Hyderabad, India, where the paid content issue is being hotly debated.

Yet despite the problems of falling advertising revenues, forecasts of even further declines, and pressure from new competitors, the global newspaper industry is far from facing an "apocalypse," Mr Balding said.

"Despite the endless predictions about the death of newspapers, they actually continue to grow, at least on a global scale," said Mr Balding.

The WAN-IFRA survey showed that newspaper circulation grew, on a global scale, by 1.3 percent in 2008, the last full year for which data exists, and almost 9 percent over five years.

"You might say that this growth is taking place in the developing markets and masks a continued downward trend in the developed world. And to a degree this is true, but it is not the whole story, as newspaper companies in the 'old' markets have embraced digital platforms and new forms of print publishing and, in doing so, have actually grown their audience reach and revenues, even while their print circulations have come under pressure."

The data shows consistent newspaper growth in Africa, Asia and South America, and a long-term slowdown in the US and European markets.

"But even here, a sense of proportion demands that we deny the idea that the apocalypse is upon us," said Mr Balding. "A circulation drop in Europe, for example, is less than 3 percent over five years. Over five years, according to our survey, newspaper circulation increased in 100 of the 182 nations for which we have reliable data."

SPAM ALOT ?

How much Spam will $945 million buy?

Facebook's triumph last month over the notorious spammer, Sanford Wallace, secured a judgment of $711 million for the company .... money it will never see. What appeared to be a hollow victory, however, has set the stage for Wallace's referral to the U.S. Attorney's Office with a request by the judge that he be prosecuted for criminal contempt charges and possible jail time.

Facebook will be standing in line for a long while before it recoups a penny. MySpace won a judgment against Wallace in 2008 for $230 million following a $4 million fine by the FTC in 2006 for running excessive pop-up ads.

Today, the self proclaimed "Godfather of Spam", Alan Ralsky, was sentenced to 51 months in prison. Ralsky's appetite for spam started back in 1997 when he began sending out 70 million messages a day. In 2004 his operation began sending out billions of illegal e-mail ads pitching penny stocks in a pump and dump scheme that grossed millions.

Other indictments are pending as conspirators are facing jail time as well.

Kudos to the companies and law enforcement agencies for diligently tracking down illegal mailers.

Do they serve Spam in prison?

SELF REGULATION - QUESTIONABLE ETHICS

A U.S. senate hearing today could put in jeopardy the issue of self regulation of consumer privacy. The press release by the U.S. Senate Committee on Commerce, Science and Transportation can be found here.

In a nutshell, the practice of post transaction marketing has impacted millions of consumers with what is considered to be a "scam" engaged in by over 450 websites and their rev-share partners, Affinion, Vertrue and Webloyalty.

The committee is investigating over 1.4 billion dollars in recurring revenues charged by these companies and shared with their partner sites. Shockingly, some of the most respected companies are on the list of offenders. The lead story by the Huffington Post can be found here along with a list of the top offenders.

In the face of FTC hearings next month on the issue of privacy concerns and self regulation by the industry, these actions do nothing to instill consumer confidence.

How can we possibly self regulate our own when major players participate in questionable practices?

THE ATTRIBUTION BATTLE FRONT

By now we are all more than aware of the debate and controversy surrounding the issue of ad impression attribution and “last click” which tends to favor search (and therefore Google) as the most effective form of a digital marketing placement.

“Last click” attribution, however, oversimplifies the stream of consciousness (or unconsciousness) always ignoring the contribution of campaign impression delivery before the last click …. which leads to a purchase or action. Weaving the impact of offline impressions into the equation adds to the confusion as media vendors jockey for credit. The landscape is littered with land mines that are confounding both marketers and vendors into “paralysis-analysis”.

In an effort to help “solve” the problem of overlapping exposures across digital media channels, Atlas and DoubleClick have enabled Universal Action Tags and Floodlight Tags leading to conversion mapping and event tracking through attribution logic. The problem is not yet solved, however, as the application of values to all considered campaign impressions is always debatable.

When did the controversy begin? When will it end? Are marketers looking for deeper insights into the effectiveness of their online media investments and placements? Or, are media vendors across participating campaign channels looking for a larger piece of the media investment pie?

Both parties are, naturally, catering to their own agendas. Marketers and their agencies want deeper insights into ad effectiveness, while the media vendors want credit leading to shared payments for their CPA placements. In the case of CPA campaigns it is not uncommon (although wrong!) for marketers to pay vendors more than once for the same sale. It’s a slippery slope that can only lead to more backroom payment headaches for the agencies and marketers playing the CPA game. Contrary to the machinations and plotting of vendors I have worked with, it is my guess that shared payment scenarios will never happen and the thought of ever securing monetary credit for “view through” assignments are as far off as the colonization of Mars.

For those vendors hawking CPM campaigns, the real benefits derived from attribution technologies will ultimately lead to higher markups for targeted and optimized inventory as it is considered premium …. higher CPMs, less waste and better returns.

Having had the opportunity to debate both sides of the controversy with vendors and agencies, it is the agencies and marketers, in my opinion, that wish to provide a clearer perspective into the ultimate value of attribution technologies.

The controversy will continue until such time that better research initiatives, with proper test and control groups, is conducted in order to provide more clarity. Under the aegis of independent industry associations (Internet Advertising Bureau and Advertising Research Foundation) marketers and agencies eager to gain better insight into attribution models should be encouraged to petition and subsidize qualitative research in this arena. The time for development, sharing and adoption of best business practices for attribution logic has been too long coming.

OUR TOWN

A recent Huffington Post headline declared a thirty percent unemployment rate in a Michigan town dominated by one large employer that was hit hard by the economic downturn.

The folks in these rural towns are hurting badly. As plants close and jobs are lost the local economies lose the momentum to keep going. Purchasing power drops, inventories for everything imaginable become restricted, transportation slows. The ripple effect of thousands of small towns shakes the core of our economy.

These small towns, the backbone of the American economy, ripped apart and dismantled by Wall Street behemoths that could care less about their plight will eventually make a comeback.

The economy will survive and we will have learned many lessons. Lessons about trust, integrity and compassion. Hopefully, the failings of previous administrations to protect the flock will be corrected. We are a resilient people.

Our own town, that of the ad community, has also been hit hard. I have seen many jobs disappear as smart, valuable people become discouraged and move on to other career choices. Yet I am confident that we will see a reversal of fortunes and encourage those of us in the industry to hang on.

The words to the song below, sung by James Taylor, say it best.