What really happened that caused traditional media to shrink so much over the past decade – and why are so many still struggling to come back?
That’s the subject of this presentation, which I’ve given several times over the past few years.
Value-added is the currency of the new economy. The idea is this: You do business by giving people what they pay for, but you gain and retain customers by adding a little something extra on top.
When the Eat ‘n Park restaurant chain gives each child a free Smiley cookie after dinner, that’s value-added. When UPS and FedEx provide tracking numbers so you can follow the progress of your package, that’s value added.
But beware of providing value-added that fails to add value. That can actually harm your business.
Here’s an example from the business-to-business world: In the course of my work, I recently placed some small advertisements with a local media outlet. Ever since, I have received a weekly e-mail letting me know that my online customer profile has been established and that if I fill it out I will receive a free listing in some under-explained and over-complicated online system. They call it value-added; I call it extra work with dubious benefit for which I won’t be paid. But ignoring it leaves me with the inescapable knowledge that maybe – though not likely – I am shorting my client on some meaningful opportunity.
Here’s another, from the business-to-consumer world: The pharmacy placed four automated calls to my house the other day.
One was important; it directed my daughter to call the store about a question on a prescription she had transferred from another location. Over the next few hours she called several times and nobody ever answered the phone. In the end, she drove to the store and waited in a long line to speak to the overwhelmed pharmacist.
While she was there, I asked her to pick up another family member’s prescription that had been submitted electronically the previous day by the doctor. Not only wasn’t that prescription ready, nobody in the pharmacy could find any evidence it had ever come in. But 20 minutes after my daughter got back home, another robo-call arrived to announce the prescription was ready.
That phone call was intended to be value-added, but instead, it emphasized that the pharmacy is understaffed and has flawed processes – resulting in the inconvenience of another trip to the store.
By the time I returned home, there were yet two more calls – “courtesy” reminders that it was time to refill some maintenance medications.
I never asked for these reminders. In my household, we order refills after observing the pill bottle is close to empty. The pharmacy just assumed my family would value these calls and opted us in.
I’m sure there is a way to change the settings for these automated calls. But why should that be my job? I didn’t ask for all this value-added in the first place. Aside from the momentary pharmaceutical chaos in my household, we’re basically healthy and view our business with the drug store as a transactional necessity.
This, of course, is what the pharmacy corporation hopes to change. By offering all this value-added service, it hopes to turn our transactions into a relationship.
It’s having the opposite effect. So rather than figuring out how to change my preferences, I simply seethe in the background while the answering machine records each call.
The lesson is this: If you’re going to offer value added, make sure it really adds value. Otherwise you’re just spending money on something that actually harms your business.
According to B2B magazine, ABM, the trade association for the business-to-business trade press, held a series of panel discussions recently in which participants declared that print isn’t dead.
Wouldn’t we expect them to say that? Of the four pro-print souls mentioned in the article, three of them still make their living by running, editing or selling for print magazines.
I’m not arguing their point either; I believe print is a vitally important communications vehicle and somehow will remain so in the future.
What’s notable in this discussion is the reasoning offered by the fourth panelist, Bob Drake, who runs Drake Creative agency. He said that a recent ad campaign that included a print component succeeded. He’s quoted by B2B as saying, “It goes against everything we’re hearing, but we can engage people for a long period of time (in print) and they stay engaged.”
I don’t know Bob Drake, and I don’t mean to pick on him. But if he’s hearing that print doesn’t work, then he’s talking to other marketers and not to marketees.
Marketers are abandoning print because it’s harder to measure as a marketing vehicle than Internet-based technologies. This is undeniably true. But at some point, that legitimate objection got simplified to the assumption that print is broken, which has been simplified even further to the notion that print is dead.
But if you ask readers, that’s not even close to the truth. The same article cited a poll by Roads & Bridges magazine (conducted by Internet, ironically enough) that indicated a strong preference among its audience for getting information via print. This is consistent with every bit of research and opinion I’ve ever seen. People prefer reading words on paper – especially glossy paper with charts and pictures.
The point? Like everyone else, marketers are susceptible to the echo-chamber effect. Print isn’t in trouble because it doesn’t work; it’s in trouble because shorthand communications of marketers obscure the nuance that is the truth.
A new study by the IBM Institute for Business Value concludes that the troubles faced by traditional media aren’t going to go away when the recovery picks up steam.
The study, according to a report by BtoB magazine, concludes that as more and more people move online to get their information, advertisers aren’t willing to pay as much to reach them. Why? Presumably because these prospects become easier for the advertisers to reach – a conclusion that’s hinted at by the study’s other finding: that advertisers are willing to pay some kind of premium based on context and relevance of the audience.
This is nothing new to readers of this blog. But it’s a big stick in the eye for B2B media types who still think their future will be secured simply by providing great content.
Editor & Publisher – was shuttered in December by its owner, Nielsen Business Media – has been sold and will continue to publish, according to a report by Folio: magazine. E&P is more than 100 years old, and has been the leading trade publication of the newspaper industry for most, if not all, of its history. Its demise was a blow to the gut to journalists everywhere, who for the last few years have watched the apparent meltdown of their industry’s fundamental business model.
The new owner is Duncan McIntosh Co. Inc., based in Irvine, CA – a white knight that rides in, not on a horse but on a powerboat. Duncan McIntosh is a consumer marine media company whose properties include Sea Magazine, The Log newspaper and, most notably, Boating World.
There’s no deeper meaning to this. It’s just nice to write about a company that sees the value in a storied brand, tradition and a franchise that serves the media industry. No surprise that the company isn’t one of the diversified media giants, for which earnings multiples are the only meaningful metric.
Add another surprise that’s not a surprise to the long list of publications that died in 2009: Editor & Publisher, the No. 1 title serving the newspaper industry itself, is folding at year-end.
E&P was such an institution – it’s been around since 1901, but existed under a different title since 1884 – that it’s hard to imagine a media world in which it doesn’t exist. That’s why it’s closing is so surprising.
On the other hand, The Nielson Co. had been trying to sell its media publications group, including E&P, Adweek, Brandweek, Mediaweek, Backstage, Billboard, Film Journal International and The Hollywood Reporter. Most of the group was just sold; E&P was not included in the deal.
I don’t know anything about E&P’s finances, but you don’t need an MBA to understand what that means.
Trade books that cover the media industry are chronically short on advertisers. They all live a subsistence existence. E&P’s folio has been razor thin since I first saw it in the early ’80s.
If E&P ever made good money (high margins), it never made big money. And in times of recession, small-money magazines do worst in the effort to maintain their margins.
I’m sure E&P is in the red, and that any forecast in which it could become proftable again doesn’t deliver enough earnings to justify the turnaround project.
And with the dire condition of many newspapers, E&P’s expiration is a symbolic event that was probably inevitable.
In that context, that E&P should die broke and alone isn’t a surprise at all.
I’m sorry to see it go, and feel for everyone on the staff. It was a great institution right up until the end.
According to AudienceDevelopment.com, audited circulation levels are declining at historic rates.
This actually points to two trends — one economics related, and one customer-induced.
The first is that publishers are cutting circulation in order to reduce cost. AD states that “183 publications decreased circ 5 percent or more compared to 142 a year ago and 101 the year previous. Conversely only 41 publications increased circ five percent or more compared to 76 the year previous.”
OK, so publishers are cutting circulation to reduce printing and postage costs. It happens in every recession, and it won’t come back much, if at all, following this recession because advertisers won’t accept rate hikes in exchange for a larger rate base. There’s simply no money in sending more publications to more people.
But the second trend is bigger and more meaningful to advertisers and publishers – and it could put the auditors out of business. That is that publishers are dropping their audits altogether because the audit process provides decreasing ROI.
AD states: “Departing titles far exceed newly audited titles. A record 69 titles were discontinued or ceased being audited and only 23 titles were added to the audited ranks. The total number of audited “consumer magazines” fell from 545 a year ago to 499.”
More and more advertisers are changing their perspective from wanting to reach a verified audience to wanting to achieve a measurable response from whoever they reach – a painfully fundamental change that I’ve previously addressed, and which most publishers – especially in the glamorous consumer world – are still trying to tiptoe around.
A hundred valid responses from an unaudited audience is worth 10x more than 10 valid responses from an audited audience.
From a publisher’s perspective, if you can deliver the responses, the audit becomes irrelevant.
Based on this, the audit bureaus ought to be frightened.
And while abandoning your audit is still a bold step in the magazine business, I assume that most publishers who do so are reinvesting in products that deliver the kind of results their customers really want.
The parties I’m most concerned about are the publishers who haven’t talked about leaving the audit behind. Because if it hasn’t occurred to you, then you clearly haven’t been listening to what your customers want. And this is one of those watershed times when the only security is to be so close to your customers that you can feel them breathe.