Thursday, April 24, 2008

Mag Ads Get Sophisticated Industry to Use Print to Tactical

Mag Ads Get Sophisticated Industry to Use Print to Tactical Advantage
By Stephanie Clifford
The International Herald Tribune
NEW YORK: Readers of the latest issue of People magazine may have been startled to open to a bulky page in the middle and hear Natasha Bedingfield's latest pop song start playing out loud. It was courtesy of a large ad for Verizon Wireless's music download service - and a tiny sound board and speaker wedged within the pages of the magazine.

Or perhaps readers have gotten used to such sensory affronts from their reading material. With blinking lights, pop-up ads, kiss-on lipstick samples, scratch-off scents, melt-in-your-mouth taste strips, and even pocket squares, advertisers are stuffing magazines full of just about anything to make their advertisements stand out.

One reason for the phenomenon is better technology, which makes it less expensive to put unusual objects in magazines and which helps advertisers create more sophisticated inserts. Improvements, say, in hiding fragrance samples under peel-off strips has also reduced the backlash from people with allergies.

But there is another dynamic at work: with so much of the publishing industry shifting toward the Web, magazine executives are trying to use their print products as a tactical advantage. Not only are they reminding advertisers that magazines are good places to attach things, but they are also seeking out and conceiving of these projects.

"For us, it's be clever or die," said Peter King Hunsinger, the publisher of GQ, which tucked fabric pocket squares into 19,000 April issues for a Lexus promotion.

And advertisers are looking for concrete returns on these creative ads, many of which use coupons or other incentives to drive consumers to Web sites or stores, where the effectiveness of the ad can be measured.

"The days of just trying to be creative and doing these without a serious commitment to marketing results are gone," said Mike Maguire, the chief executive of Structural Graphics, a company that produces three-dimensional ads, like pop-up panties for a Fruit of the Loom advertisement.

Advertisers have been trying to stand out from the pack since the perfume strip was invented in 1979, when the scent was "so strong that "you could kind of smell it before you even opened the magazine," recalled Diane Crecca, vice-president of sales, marketing and business development at Arcade Marketing, which invented the scent strip.

The technology for shampoos or lotions was not much better. "They would sometimes burst inside the magazine," said Agnes Landau, senior vice president for global makeup marketing at Clinique. "There was a little bit of a backlash from the customers at that point because they didn't want the magazine being damaged."

The advertisers also were not thrilled, because the samples they included were subject to an extra fee from the Post Office. Arcade Marketing executives studied what the Post Office's definition of a "sample" was. By 1997, it had devised a thumb-size packet that could withstand pressure without bursting, so could offer advertisers sampling without the excess charge.

More technology advances on the chemical side, like being able to affix face powder to a piece of paper, led to powder, lipstick, and even nail-polish samples. Perfume samples now can be contained beneath seals and wrapped in little packages, a relief to allergy sufferers.

But how much more can magazines take? "The biggest issue for editors and, of course, publishers, is how many there are," said John Fennell, associate professor of magazine journalism and Meredith chair in service journalism at the Missouri School of Journalism. "They break up the editorial in the book - you're paging through the book and you have big, stiff cardboard things in the middle. So as much as they make money, there's a sense of, how many can be put in the book without their being an overload."

The beauty business has led the charge on free samples in magazines. More than 1,000 department-store fragrances and 800 eye shadow shades have been introduced in the past five years, according to NPD Group, a market-research firm, and their manufacturers are eager to make their ads stand out.

"In addition to giving consumers a chance to use your product, it's an arresting, cut-through the clutter advertisement," said Katie Devine, product director for Aveeno Facial Care at Johnson Johnson Beauty Care. Devine said that Aveeno offers samples in magazines of "essentially any product that's a big marketing focus for us," and that coupons with samples have two to three times the redemption rate of those without.

Allure, a women's magazine that focuses on beauty, has seen a 20 percent increase in product-samples-as-inserts over the last two years, according to its publisher, Nancy Cardone. "It's become so dramatically effective in beauty that two years ago we developed an issue that we promote as our sampling issue," Cardone said.

But many of the more unusual inserts are coming from outside the beauty industry. Scratch 'n' sniff has given way to scented ink. Batteries have become small enough that an advertisement can light up or carry a sound chip. And taste, which had no place in magazines until recently, has been conquered by First Flavor, a company in Bala Cynwyd, Pennsylvania, that packages dissolving taste strips. Welch's Grape Juice ran an ad in People in February with the strips, and Jay Minkoff, the chief executive of First Flavor, said that the company was working on several more food-category advertisements.

Taste strips and musical ads come with a relatively big price tag, another reason publishers are seeking them so aggressively. For Clinique, the cost of an insert with a sample is three times that of a normal ad, according to Landau. The cost of a flavor-strip insert, which typically includes First Flavor's production costs, special printing, and an advertising-insertion charge, said Minkoff, "roughly doubles the cost" of a single-page advertisement in a national magazine.

Because of the revenue potential, publishers are going to great lengths to attract elaborate campaigns. The publisher of Cosmopolitan, Donna Kalajian Lagani, bought special equipment that could affix product samples directly to a magazine page, rather than to a card insert - a big cost for Cosmopolitan, but a money saver for advertisers.

"Clients are looking to us to come up with solutions on how to communicate to our readers," Lagani said. "We've really changed the way we go to market."Despite the expense, advertisers seem to be trying to outdo one another in the complexity of their inserts. Take the MasterCard "Priceless Search" campaign, which is running in several Condé Nast magazines' April issues. The ads, conceived by MasterCard and McCann Erickson, feature a sealed envelope with an instant-win game piece inside, on heavy paper stock. MasterCard ran 12 million of the advertisements. "We've done inserts before, but never to this level of sophistication and complexity," said Chris Jogis, vice-president of United States brand marketing for MasterCard.

It took MasterCard two years to pull off the project. The assembly process required the ad to be printed, the envelopes to be printed, and the envelope inserts to be printed, then the whole piece assembled, before the ads were sent to the magazines' binding plants. The instant-win program, too, required several security measures, including a team of overseers at the magazine-binding plant to make sure the three winning pieces were distributed randomly. All the printing had to be done in accordance with Condé Nast's equipment.

All the work was meant to drive traffic to MasterCard's "Priceless" Web site, where MasterCard could offer more information to its visitors, and Jogis said the company was seeing good results so far.

And the media director at Lexus, Andrea Lim, said she was happy to see that the pocket square promotion in GQ had driven traffic to Lexus's Web site. Lexus made an the extra 2,000 pocket squares available online, which were claimed in 30 hours after the ads hit.

"We're not finished - that's for starters," Lim said. "We liked this idea so much that in the first meeting, after we decided it's going to be the pocket square, we're like, then next year it's going to be x. We just keep trying to raise the bar."

Wednesday, April 23, 2008

Newsweeklies Continue Long, Slow Print Goodbye

Newsweeklies Continue Long, Slow Print Goodbye
U.S. News cuts ratebase, frequency as pressure on category mounts.
By Bill Mickey

The newsweekly category continues to churn-and cut ratebase. U.S. News & World Report is reportedly the latest to lop a chunk of rate base as well as cut frequency. The magazine adjusted rate base from 2 million to 1.5 million and frequency from 46 issues to 36, according to a Mediaweek report.

The magazine declined to comment.

Newsweeklies, perhaps more than any other magazine sector save for technology titles, have been under constant pressure in recent years to change as the big three (Time, Newsweek, U.S. News) retool their print designs, ratebases, print dates-anything, it would seem, to adapt to the digital age.

Time and Newsweek have already both gone through rate base reductions of their own. Time was the first to go in early 2007, slashing its circulation from 4 million to 3.25 million. Newsweek followed later that year, trimming 16 percent to 2.6 million.

And the changes didn't stop there. Time went on to shift its on-sale date from Monday to Friday, boost its newsstand price by $1, and significantly redesign both the magazine and Web site.

'Net Effect

The actions reflected the impact the Internet has had on the category, and how the publishers have struggled in taming the dynamic between the print and digital products. As Time's managing editor Richard Stengel said at the 2008 DMA Circulation Day event recently: "There's no news that breaks in print anymore. Print takes the facts and adds insight. Online is for the 'what' and print is for the 'why'. The magazine puts it in context and that's why we see them as complementary brands."

Newsweek also unveiled a redesign of both the magazine and Web site around the time it cut its rate base. "Some people in our business believe print should emulate the Internet, filling pages with short, Web-like bites of information," editor Jon Meacham wrote in his editor's note announcing the redesign. "We disagree. There is a simple idea behind the changes in the issue of Newsweek you are holding: we are betting that you want to read more, not less."

As for U.S. News & World Report, this latest move is another in a long series of changes for the magazine. In 2005, U.S. News president Bill Holiber announced a strategic shift away from print to focus more on Web business, giving print room to provide more analysis-and letting Time and Newsweek fight for a broader readership.

"At times it may come across as being not the most exciting product, but it's a very well-thought-out, information-driven product," Holiber said. "As we move in this direction, I think you'll see more information on the page. I think Time and Newsweek are battling it out, trying to be all things to all people. They want to be big-very, very big. We've found there's a certain type of consumer we attract, and that's who we're focusing on: 'Give me the facts, I'll decide.'"

However, with the appointment of Brian Kelly to editor a year ago, the magazine has moved decidedly in the direction of more service journalism, ramping up its production of "Best-of" issues.

And, as it turns out, no one wants to be very, very big anymore.

Monday, April 21, 2008

Optimism and the Digital World

Optimism and the Digital World
Wall Street JournalApril 21, 2008; Page A15

In the 1850s, James Rothschild complained that it was a "crying shame that the telegraph has been established" because suddenly anyone "can get the news." The Rothschild banking empire was built through private couriers who ponied from one European trading center to another, profiting from market-moving news about business and trade. The telegraph ended such exclusive access. Almost as annoying, information became a constant. Rothschild complained, "One has too much to think about when bathing, which is not good."
This early Information Age became real time when Queen Victoria sent President James Buchanan the first trans-Atlantic cable. "The Atlantic is dried up, and we become in reality as well as in wish one country," editorialized the Times of London. "The Atlantic Telegraph has half undone the Declaration of 1776." Tiffany's crafted jewelry out of unused cables, and a popular novel of the era was "Wired Love," a Morse Code-era version of online matchmaking. The telegraph shrank the world, upended business practices, democratized information and confounded government regulators.
Today's digital world makes these challenges of the telegraph era seem quaint. Modern-day Rothschilds, and even the more workaday among us, are tethered to BlackBerrys. Our digital-native children simultaneously instant message one another, listen to iPods and watch videos - while doing their homework. Scientists now suspect that this next generation may be developing a different brain structure, reflecting online activity from toddler age.
This Information Age and how it affects us as consumers, businesspeople and citizens seems like a timely topic for a new column. My sensibility on these issues is that of a media practitioner for some 25 years so far, running media and information businesses, including as a former publisher of The Wall Street Journal. The focus will be on the accelerating impact of new technology. This column will also comment on public policy, seeking to discourage restraints on innovation while protecting sometimes conflicting concerns such as national security and privacy.
The media was one of the first industries to be roiled by new digital technology. Retailer John Wanamaker once quipped that he knew that half his advertising spending was wasted - he just didn't know which half. As a result of the efficiency of the Internet and other targeted media, many newspapers, magazines and broadcasters have had large declines in revenues and profitability. The largest media company in the world is Google, which produces little original content and indeed would instead call itself an engineering company. Silicon Valley is driving consumer choice and behavior at least as much as Madison Avenue.
We have many new choices in how we access news, information and entertainment. The number of professional journalists continues to fall, but the potential good news is that technology makes it possible for anyone to write and build an audience. New forms of online journalism are already filling the gaps. It was a Barack Obama-supporting blogger, citing her journalistic duty, who broke the recent big story of his comments in San Francisco about the bitterness of small-town voters.
There are hard questions to consider. For example, does the easy availability of information necessarily mean the advance of knowledge and wisdom? Endless information from many sources may or may not be as trustworthy as information handled by trained editors or through analog-era processes like academic peer review or independent ratings of financial instruments. Part of the answer may be new tools to capture the wisdom of crowds, such as the information art form exemplified by Wikipedia. The good news is that almost all public information is now available at the click of a mouse; the bad news is that unfiltered information overflow can leave people as confused as James Rothschild once was.
Despite the importance to the economy of technological innovation, public policy often stymies entrepreneurs. Rules for telecommunications, intellectual property and even immigration need to be updated for today's technologies - indeed to make tomorrow's technologies possible. Likewise, national security now depends on how well information dots about threats are gathered and connected. This requires a sophistication about mining and linking information through open, yet secure, systems that often conflicts with the hierarchical culture of government bureaucracies.
Still, technologists are optimists, for good reason.
My own bias is that as information becomes more accessible, individuals gain choice, control and freedom. Established institutions - governments, large companies and special-interest groups - need to work harder to justify their authority. As information and knowledge spread, financial and human capital become more global and more competitive. The uncertainties and dislocations from new technology can be wrenching, but genies don't go back into bottles.
The First Law of Technology says that "with every change in technology that affects consumer behavior, we always overestimate the impact in the short term, but then underestimate the full impact over the long term." The original dot-com era a decade ago was overhyped, but by now the Web has become a utility, increasingly available anywhere for any purpose. This is the Information Age, yet we're just beginning to gather the information and understanding to know how it changes our lives.