Thursday, January 31, 2008
BoSacks Speaks Out: It's Time, Ad Industry: Stand Up
I've been reading and enjoying Rance Crain's written work for years, but today I think he had better step back from the Kool-aid dispenser at the Ad Age cafeteria.
He suggests that ". . . a more militant ad industry might have been a big help in preventing the financial debacle that's threatening to drag worldwide economies into severe recession." In a dream world I might agree with Rance, but in the nuts and bolts world of today's advertising, it is just a fantasy.
I have ranted for years that advertising is a system of over-communication excess that is out of control and on a collusion course with the public at large. There is no peace on this earth from the advertising onslaught. You can't even relieve nature's call without being bombarded by crass, in-your-face advertising. Now Rance is asking this very same adolescent advertising system to show some restraint and "just say no" when it comes to deceiving the public. Who is kidding who? Where will this strength of character come from? Within? Wouldn't that be nice?
Here's the deal - first take the damn ads out of the bathroom, then try and save the world.
"You can't talk your way out of what you've behaved yourself into."
Stephen R. Covey
It's Time, Ad Industry: Stand Up and Hold Marketers to Account
Remember This Adage: What's Best for Consumers Is Best for Advertisers
By Rance Crain
If tough economic times are ahead, advertising has to change. Claims had better reflect reality because consumers will become especially cautious and critical.
I keep in mind the adage of my old boss Stan Cohen -- what's best for consumers is best for advertisers -- and I wonder if those wise words are being ignored in three major areas: financial services, prescription drugs and sustainability.
It's very apparent that advertisers didn't hold up their end of the bargain in the subprime mess. I've said that the subprime meltdown is, in large measure, a failure of communications, and communicating effectively and clearly and completely is the job of advertising -- at least it should be.
But the sad truth is that many financial marketers didn't want prospective home buyers and mortgage holders to understand the downsides of their transactions: that interest rates can go up without notice, that buyers are taking on too much debt, that housing prices don't always go up.
A more militant ad industry might have been a big help in preventing the financial debacle that's threatening to drag worldwide economies into severe recession.
Ad leaders should have called for financial marketers to do a better job of disclosing the fine print of mortgage lending -- and, yes, Advertising Age should have been there urging them to do so.
Last August I talked with Wally Snyder, president of the American Advertising Federation, about the situation, and I quoted him as saying, "It's becoming pretty darn clear that we've got to accept this problem and bring ethical considerations -- not just legal -- to bear."
Yet, as far as I can see, nothing was done, and so everybody involved, including regulators, the Federal Reserve and ad people, dragged their heels. Now the Fed is requiring certain disclosures in lenders' advertising, but the ad industry could have taken a leadership position there.
One area where ad groups were very forceful was in their unified lobbying against an advertising moratorium during the first two years a prescription drug is on the market. But nobody knows what unexpected adverse reactions a new drug might have, and such reactions would be compounded if the drugs were widely advertised.
The groups argue that limiting drug advertising is an abridgement of commercial free speech, so how about the drug companies agree not to advertise a new drug to consumers for one year? (Of course, they would be free to advertise to physicians.) As Wally pointed out, food companies agreed among themselves to bar ads aimed at kids that might contribute to child obesity, and "even consumer groups have said what the food companies have done is impressive."
Another problem for big pharma is that the industry is running out of breakthrough blockbusters to bring to market, and more and more drugs will be forced to rely on highly imaginative advertising to differentiate almost identical products. We're going to see ads for diseases we never knew were a problem (restless-leg syndrome, anyone?), and critics are bound to step up their cries that the drug firms are getting people to ask for prescriptions they don't need.
Lots of scrutiny also will be paid in the coming year to the sustainability issue. Companies will be clamoring to show they are making important efforts to conserve our natural resources, and the big story will be when they overstate their contributions.
Marketers can't be too careful here. Seemingly innocuous (if stupid) promotions like Toyotathon can backfire. In the ads, people wreck their cars so they can justify buying new Toyotas. But as the Cape Cod Times said in an editorial, "In today's world, how funny is junking a quality machine in good working order and using up more energy and natural resources to replace it?"
So in 2008, advertising will be viewed through a new, harsher prism. It's our job to prod advertisers to stand up to the glare.
Wednesday, January 30, 2008
The Written Word? It's So Totally Over, According to Mr. IPod
Nobody Reads Anymore, Steve Jobs Says. YouTube Addicts Might Agree -- but What Is 'Reading,' Anyway?
By Simon Dumenco
By all rights I shouldn't be writing this -- and for God's sake, you certainly shouldn't be reading it! Because reading is, officially, dead.
I have that on good authority -- from no less a trendmonger and trendsetter than Apple chief Steve Jobs, whom reporter John Markoff of The New York Times quoted last week as saying that the Amazon Kindle -- that much-hyped e-reader for wordy products such as books, newspapers and magazines -- is doomed. "It doesn't matter how good or bad the product is," Jobs told Markoff. "The fact is that people don't read anymore. Forty percent of the people in the U.S. read one book or less last year. The whole conception is flawed at the top because people don't read anymore."
At this point you should go check to see what's new on YouTube.
But if you -- you freak, you anachronism, you dying breed -- are still with me, then let's try to parse the math, and Jobs' grim logic, together.
While it's generally taken for granted that the newspaper industry is doomed and the magazine industry is under siege, it's worth noting that the book-publishing industry has been holding its own. According to the Association of American Publishers, in 2006 (2007 figures aren't out yet), "trade sales of adult and juvenile books grew 2.9% to $8.3 billion, a compound growth rate of 3.7% per year since 2002. The strongest growth in this category came from adult paperback books, whose sales last year rose 8.5% to ... $2.3 billion. Adult hardbound books [grew] 4.1% to $2.6 billion."
As for Jobs' stat, it seems he extrapolated it from an old National Endowment for the Arts study, which found that in 2002, just 57% of American adults reported reading a book. Then again, according to an Associated Press-Ipson poll released last August, 27% of American adults read no books last year -- ergo, nearly three-quarters did. In fact, the poll revealed that the "typical American adult" read four books last year.
"Who are these 'people' to whom Steve Jobs is referring?" Publishers Weekly Editor in Chief Sara Nelson asked me last week. "Not the million-ish who are devouring Elizabeth Gilbert's 'Eat, Pray, Love' or the ones who line up for Harry Potter and/or James Patterson novels." She added: "All I can say is that when I sat in restaurants and airports or on buses or trains and pulled out my Kindle, I got more attention than if I'd shown up naked -- with an adorable puppy."
At this point you should type "Sara Nelson naked with an adorable puppy" into Google Image Search.
And then check to see if the Kindle is in stock on Amazon -- which it probably isn't, because almost from the moment it was introduced, the product page has displayed this notice: "Due to heavy customer demand, Kindle is temporarily sold out. We are working hard to manufacture Kindles as quickly as possible and are prioritizing orders."
In other words, Amazon is politely asking customers to be patient -- which is hilarious, because Kindle is all about instant gratification. As New York technology consultant Michael E. Gruen wrote in a comment he posted on the Silicon Alley Insider blog (about Jobs' Kindle dis), "I'll bet people are reading fewer books because they're not yet as 'on demand' as other forms of media like music and film (which Apple has solved) as well as e-magazines and blogs." Kindle is far from perfect -- I, like other observers, have disparaged its clunky look -- but with its built-in EVDO broadband modem, it's all about getting text on demand, anywhere.
Which brings up a larger point: What is reading? After all, you can use a Kindle to read Brontë, but you can also use it to skim BoingBoing (Kindle has deals with some 250 blogs). If you're not devouring "serious" literature or old-school A-list publications, are you not technically reading? Are you effectively nonliterate? Clearly, Jobs thinks so.
How else to explain his judgment that "nobody reads" in a culture in which more and more people seem to be more obsessively engaged in producing and consuming words than, possibly, ever in the whole of human history? I'm talking about not only blogs (Technorati tracks more than 100 million of them) but social-networking communication and Twitter "tweets" and even, yes, e-mail. Think of the countless people who live vibrant, effusive, all-consuming epistolary lives who, pre-internet, might never have made the effort to write a proper ink-on-paper letter. With apologies to Gertrude Stein, a word is a word is a word -- and storytelling is storytelling is storytelling.
Yeah, even if it comes in the form of "cellphone fiction." You probably heard about (or actually read!) the New York Times' recent front-page story about the rise of that genre: terse Japanese "chick lit" written on cellphones and meant to be read on them, though an increasing number have been able to cross over to print best-sellerdom.
The Times, actually, was really slow to notice -- The Wall Street Journal covered the phenomenon last September. And when Ben Vershbow, the editorial director of the Institute for the Future of the Book (which is affiliated with the University of Southern California and funded by the MacArthur Foundation), blogged about that Journal article, his colleague Bob Stein, founder of the Institute, wrote, "This suggests that art is irrepressible, as it emerges and pokes its way through the smallest of cracks in the media firmament."
God bless you for saying that, Bob Stein -- and for having the generosity of spirit to even think it.
But, as always, it all comes down to the question of who gets to define "art."
Tuesday, January 29, 2008
BoSacks Speaks Out; How Quebecor can Thrive
Here is an interesting story. To me it is so clearly an issue of disconnected perspective that I am almost stunned by the reporter's "take" on the issues.
Well, not really stunned because it is a Wall Street perspective. You know what I mean , bottom line profit, outstanding shares, that sort of thing. This was clearly not written by a reporter who knows anything about the printing world nor the presses that this story might have been printed on. Nope. To this reporter presses don't matter and Quebecor World and it's staff is just a small cog in a shareholder's diversified portfolio.
"Emotions get in the way but they don't pay me to start crying at the loss of 269 lives. They pay me to put some perspective on the situation."
Quebecor's media interests can thrive with sale of Quebecor World: analysts
The Canadian Press, 2008 - Canadian Press
MONTREAL - A complete sale of Quebecor World would allow its parent company Quebecor Inc. to thrive as it focuses on expanding its presence as a Canadian media conglomerate, industry observers said Thursday.
Quebecor Inc.'s prospects are led by its strong cable operations at Montreal-based Videotron and a portfolio of newspapers, including the Sun Media group and recently acquired Osprey newspapers.
The media business, which also includes television and Internet, hopes to enter the cellphone business in Quebec through a spectrum auction.
"The media side has a very positive outlook, it's doing quite well and Quebecor World wasn't that big of a deal to Quebecor Inc. anymore," said one analyst who didn't want to be identified.
The parent company's share value has dropped 25 per cent since November, in large part because investors feared it will sink money into the struggling printer.
Late Wednesday, Quebecor World received an American court order providing protection under Chapter 11 of the U.S. bankruptcy code. That enables the company to borrow up to $750 million immediately from Credit Suisse and Morgan Stanley to help fund operations while Quebecor World restructures.
"Once I know they are not going to put money in, my comfort level grows," said a second analyst, who added that cutting ties would allow Quebecor Inc. to focus on its core business without distraction.
"The best outcome could be strong indication from (Quebecor Inc. CEO) Pierre Karl Peladeau that Quebecor Inc. is no longer going to be involved in supporting Quebecor World."
The printing business was founded by Peladeau's father.
Quebecor Inc. had attempted a last-ditched rescue for Quebecor World by teaming with Tricap Partners to provide a US$400 million lifeline to the printer.
Its banking syndicate refused to sign off and the parent company was unwilling to increase its financial position. It also said this week it wants the printing business to be renamed so as not to confuse investors about the state of Quebecor as a whole.
Analyst Jeffrey Fan of UBS called Quebecor Inc.'s decision to walk away from the proposed rescue plan the right one.
"We believe these actions reflect Quebecor Inc.'s decision to surrender control of Quebecor World," Fan wrote in a report earlier this week.
He said Quebecor Inc.'s share price should increase post Quebecor World and upgraded his rating on the stock to "buy" from "hold."
"We believe there is attractive potential upside for Quebecor Inc. shares and in a volatile market, we expect the shares to outperform."
Investors who own Quebecor Inc. stock like its media assets and aren't looking to own a vehicle that indirectly invests in another questionable business, said one analyst.
Quebecor officials couldn't be reached for comment Thursday. But earlier this week, company spokesman Luc Lavoie insisted Quebecor World is a good company, that has faced financial pressures.
"The perception should not be that the company is in bad shape, it's actually in a good shape now that the situation in terms of credit will be frozen," he said in an interview.
Quebecor World's financial numbers are expected to remain meshed in its parent company until it is completely sold.
Removing these contributions would dramatically reduce the company's size and geographic reach.
In 2006, Quebecor Inc. lost $93.9 million on $9.8 billion of revenues. It employs 43,000 employees, including some 28,000 by the printer.
Since 2002, Quebecor Media's operating income has increased annually while Quebecor World's contribution has steadily declined.
Quebecor Inc.'s share price had climbed in the days following the bankruptcy protection filing. However, it lost 88 cents or 2.8 per cent to $30.34 Thursday on the TSX.
Quebecor World's shares, which have been hovering near all-time lows in recent weeks, more than doubled in value on Thursday.
It gained 25 cents to 36.5 cents with 48.2 million shares traded - making it the most actively traded issue on the Toronto Stock Exchange.
Monday, January 28, 2008
Is Trade Publishing a Canary in a Coal Mine?
Posted by Jeremy Greenfield
I had lunch on Monday with the Steve Cohn (EIC of min), and the editor, publisher, and president of a very big, very well-known, and very old gentleman's magazine at a restaurant in the McGraw-Hill building. Of course, we talked about their magazine, the Giants game, and consumer-side gossip. But one topic of conversation that kept on coming up was the state of trade publishing in 2008. We talked first about BusinessWeek and the plight of the weekly in general. Then we talked about M&A in the B2B space, and then, finally, the topic of whether trade advertising would be strong in 2008.
Alan Greenspan famously said while chairman of the Federal Reserve that he need only look at the price of scrap metal to determine where the economy was headed. The scrap metal business is a commodity based on several commodities: essentially, the profit that scrap outfits make is dependent on the price of various metals around the world as well as the price of oil, electricity, and various other commodities. Therefore, price of scrap can be a good indicator for the economy as a whole-scrap goes up, economy doing well, scrap goes down, who knows. (I got this from The New Yorker . . . see John Seabrook's article "American Scrap" (abstract) in the 1/14 issue for more. You should also read Ken Auletta's "The Search Party" (complete article) in the same issue-it's about Google's lobbying efforts in Washington.)
Like scrap, trade publishing can be a good indicator of how the economy as a whole is doing. When I look at our exclusive min's b2b Boxscores and see that the building and construction category is down as a whole about 10%, well, that indicates something to me. Just for fun, I'll give you a quick run down of how all of our categories are doing (change is in ad pages year-to-date through November 2007, Source: IMS/The Auditor, except Business/Horizontal, which is provided by min):
Advertising & Marketing: +1.66% (A strong year in advertising has bolstered some of the big books in this category)
Automotive: -2.32% (More on this category in this week's min's b2b)
Banking & Finance: -.60% (Something tells me that some books in this category will be hit hard in 2008)
For the roundup of the rest of our categories, click below . . .
Broadcast Video: -19.5% (This category has been hit hard by cable network carrier saturation. More in this week's min's b2b)
Building & Construction: -9.46% (This one's obvious . . . and is being bolstered by commercial construction)
Business/Horizontal (Jan-Dec, Source: min): -9.13% (More on this category in this week's min's b2b)
Computing: -22.96% (But, in related news, most of the books here are just killing online . . . so I hear)
Developers Technical: -3.77% (Some books in this category are seeing a resurgence in print)
Electronic: -8.54% (Internet)
Engineering & Manufacturing:-6.88% (This year's decline is part of a long-term trend in this industry-not as much in the way it markets: the big boys are still holding their own)
Fashion & Design: -7.22%(While the graphics/design books are doing well, the fashion trades aren't as much)
Food: Retail:-2.22%(While life has been tough on the supermarket industry this year, the convenience store/petroleum industry has benefited from high gas prices and innovations in basic business practices and store services)
Food: Service/Restaurants: +.82 (A few books that have had several bad years in a row are coming back)
Food: Processing: +3.66 (More on this category in this week's min's b2b)
Government: -10.54% (Gov IT books are computing books this year)
Healthcare: -3.32 (Pharm)
Pharmaceutical: -5.16% (Pharm)
Telecommunications: -12.40% (Wireless books are hard hit in 2007)
Transportation: -9.76% (Oil prices and Pacific port overcrowding have squeezed Pacific and air marketing budgets-Gulf is up)
Travel/Lodging/Hospitality: -3.29% (Travel agent books are bringing an otherwise healthy category down)
OVERALL: The min's b2b index of 300+ trades is down 8.17% in ad pages through November 2007. I smell gas.
Sunday, January 27, 2008
BoSacks Speaks Out;
I'm not the first nor the last to say it, but as we all know, it's not the size, but the magic it performs that counts. This is as true for magazines as anything else. The discussion below of alternate, smaller-sized magazines is neither new nor all that adventurous. The magazines will work very well for some readers and not so well for others. At best they are a stop-gap performance. The sizes that are now being discussed for these travel-sized magazines are pretty much the same size as the Sony e-reader and the Amazon Kindle. So, is the magazine industry laying the ground work for size acceptance with this new introduction or is it just my imagination? OK, I guess it's just my imagination.
An optimist will tell you the glass is half-full; the pessimist, half-empty; and the engineer will tell you the glass is twice the size it needs to be"
In men's magazines, a question of size
Britain's FHM will introduce a travel-size edition
By Heidi Dawley
In men's magazines, the eternal question is whether size does in fact matter, and in Britain, where competition among men's titles has been especially fierce, it's a question that's being asked more and more.
FHM thinks it may have the answer.
This spring, the monthly title is set to launch a smaller version that it hopes will help attract readers on the go.
This idea of what's called a travel-size edition is not new. It's been a popular tactic in the women's market for some years now. FHM will be one of the few major men's titles to give it a go.
Media buyers think it might well attract new readers. "The travel format has certainly seemed to work in the women's sector. A number of magazines have brought it out," says Steve Goodman, managing director, print trading at GroupM. "So for FHM to try it is a very sensible move."
For FHM, as well as its brethren, the last few years have not been stellar. The magazine sold an average of 311,590 copies a month in the first six months of 2007, according to ABC figures. That was down 25.9 percent on the same six months in 2006 and way down from the 750,000 copies it sold monthly not so many years ago.
Among the problems facing FHM and the other monthlies was the flush of men's weeklies launched in recent years, mostly downmarket publications. That led the monthlies to chase downmarket in an effort to hold onto their readers, and not with success. "They were tarnished with that," says Mark Gallagher, press director at Manning Gottlieb OMD.
But the monthlies have also been hurt by the internet, which comes as no surprise.
So in 2007, FHM brought in a new editor Anthony Noguera, who had been head of Emap's men's magazine portfolio, to help bolster FHM's fortunes. Noguera oversaw a redesign that came out in August.
"FHM is very different from how it was a few months ago. It is less in that downmarket sphere that it was pulled into to compete with the others," says Gallagher.
The decision to bring out a travel edition, which will be published in select markets alongside the larger edition, is likely to be another part of that effort to help create distance from the others in the market, believes Gallagher.
FHM has not yet said how big the travel edition will be. The regular edition is 12 inches by about 8 ¾ inches.
The travel edition is likely to be similar in size to other travel editions in the glossy monthly market. For instance, Glamour, the magazine credited with bringing this size to the market, is 8 ¾" tall and just over 6 ½" wide.
FHM has said that the travel edition will be a scaled-down version of the regular edition, having the same content and page layouts. It will retail for the same price as the full-size edition -- $7.60 an issue.
The travel size first really took off in Britain in 2000 when Glamour launched into the market. The magazine chose what it called the "handbag size" when it launched.
Glamour flew off the newsstands, overtaking Cosmopolitan to become the No. 1 women's glossy just about 18 months after launch.
Not surprisingly, others followed suit, launching travel editions alongside their regular-sized editions in commuter markets.
A number of publications continue to publish at least part of their circulation in this format, including Marie Claire and Elle, which implies that the publishers believe it to be successful, although it hasn't resulted in huge upward spikes in circulation.
How it does for men's titles is an open question. One title that tried it was James Brown's Jack magazine. It launched in that size, but later abandoned it and has since folded.