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Saturday, February 19, 2005

The Economics of Time and Groping 

News Media Grope for the Right Formula

A relevant piece from WaPo's Steven Pearlstine on the changing economics of media.

Opening line: It is not lost on those of us who work in newsrooms that more and more readers pay absolutely nothing for the services that we provide.

Of course, potential readers are asked to pay with their time. And that's the key. Time is more valuable than money. (See my last post).

And for more on groping and the news media, make sure to read Wonkette.

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Spending on Reading and Statistical Analysis Plumments 

Blogger extraordinaire Rex Hammock often points to the danger of statistics in the hands of journalists. Here's an example from Folio: with the headline, American Household Spending On Magazines Plummets. The article notes that the average American family spent $40,817 on goods and services in 2003, of which "just $127 was spent on reading newspapers, magazines or books, or 0.3 percent."

Since I couldn't find anything in the article to indicate what that $127 had plummeted from, I went to the Advertising Age site to read the piece. And it's apparently true--spending on reading dropped from an inflation adjusted $317, or 1% of total consumer spending, in 1960. The sky is falling!

Of course, the sky is falling on naked readers (see the tragic example of this phenomenon to the left). Because apparel represents only 4% of household spending in 2003, compared to 12% of spending in 1950. (I'd guess that we spend more in real dollars now, but can't quite get that out of the charts and analysis). So the proportion we spend on apparel and reading has dropped at about the same rate since the 50s. But spending on entertainment in general has remained a constant 5% since that time.

Blah, blah. There aren't any real lessons here for publishers. Yes, many reading opportunities today are free (I've spent a large part of my career in the world of 'free' controlled circulation media, so I guess I'm comfortable with this). And paid circulation hasn't been a real profit-driver for a lot of paid-circulation magazines and newspapers for a while--it often costs as much to get the circulation as the revenues that circulation creates. But we monetize that circulation through advertsing and sponsorship.

Ultimately, though, analyzing hard cash transactions misses the point. The economics of media today is more about the expenditure of time with different media opportunities than it is about how much we spend in cash on media. Publishers of old school ink on paper are in competition with other media for the consumer's time--time that consumers spend in a more real way than a few bucks here or there.

Veronis Suhler Stevenson has provided interesting data on this for years in their excellent Communications Industry Forecast & Report.

Here's a long grab that's worth reading carefully:

According to the 2004 edition of the Veronis Suhler Stevenson Communications Industry Forecast & Report, consumers spent 3,663 hours using media in 2003, an increase of 1.6 percent over the previous year. Consumers spent the most time with television in 2003 as they continued to increase cable and satellite television viewing. Second to broadcast and cable television viewing, radio commanded the most attention from consumers climbing 1.2 percent as a result of longer commutes, the emergence of satellite radio and increased time spent with niche formats, such as Hispanic and all-news. Consumers spent less time with broadcast television, recorded music, consumer magazines, daily newspapers and home videos.

Media supported by consumers continued to grab market share from media supported by advertisers in 2003. Time spent with advertising-supported media accounted for 56.4 percent, or 2,064 hours, of the total, while consumer-supported media accounted for the remaining 43.6 percent, or 1,598 hours. Consumer-supported media gained nearly 7.5 share points between 1998 and 2003. Driven by time spent with the Internet, home videos, and videogames and increased media multitasking, the average consumer’s time spent with media will expand at a compound annual rate of 2.1 percent in the forecast period to 4,059 hours in 2008, more than 11 hours per day or 78 hours per week. Average time spent with consumer-supported media will continue to gain share from time spent with ad-supported media in the forecast period. By 2008, consumer-supported media will account for 45.9 percent of the total time spent with media, while ad-supported media will represent 54.1 percent of the total.


It's about time, not money--and print is losing on the time front, too. But media as a whole? Dang! 11 hours a day in 2008? That's a lot of opportunity.

UPDATE: See this article in ScienceNews: "Why Do We Overcommit? Study Suggests We Think We’ll Have More Time In The Future Than We Have Today" for an interesting take on the "economics of available time." (From LifeHacker).

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Friday, February 18, 2005

Getting the Story First 

Rafat Ali notes that he "called" The New York Times About.com acquisition on February 8. Actually, my fellow b2b media blogger Paul Conley made that prediction earlier on the same day, with cogent insider opinion and a better analysis of the value that the Times would find in About.com. See both posts for the difference between the way an investment banker looks at media and a media pro looks at media.

And Paul's post was referenced in Rafat's post. So let's give credit where credit is due. Great work, Paul!

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Oops 

Regret The Error

Here's a fun little website, featuring media corrections and clarifications, for those spare moments when you need a shot of schadenfreude.

Grabs: A photo labeled as Paul McCartney on Page E4 Saturday was actually a local musician playing in a Beatles tribute band.

The two adopted children who survive Robin Needham (Obituary, page 23, February 1) are not boys, but twin girls. Apologies.

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Lead Mapping 



Interesting 'mind map' for lead generation, from Brian Caroll's Lead Generation Blog. Most b2b media companies can offer lead-generating solutions for many of the areas Brian identifies--and not simply branding or events.

I've long disliked using 'leads' to measure the value of b2b media. Bingo cards drove me crazy, and their general disappearance in the Internet age was welcome. To me, rating a publication or show based on the number of leads generated has a number of flaws, since we don't control the product, the pricing, the frequency or the creative of our customers. Yet we're held accountable for the leads generated from our audience. If a client has a lousy-looking ad for an overpriced product no one wants, we generally get blamed.

I've also wondered what companies do with the leads they get. I've had enough experience with high quality lead-generating events--which produce face-to-face meetings with senior decisionmakers--to conclude that the majority of companies didn't walk through the door that we helped open. We had to train companies, and nag them after the event, to ensure that the great contacts we helped them make were contacted again. That sure made me focus not only on generating leads, but on tracking the path of lead inside our customers' companies.

Brian Carroll's mindmap offers an interesting vision of the lead generation process. It's worth the time to match your media solutions against this map. Any gaps? Can you fill them in?

And can we use this more complete approach to the creation of a lead to meet the measurability and accountability standards our customers are creating?

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Thursday, February 17, 2005

Something Brewing At Penton? 

PTON.OB: Summary for PENTON MEDIA INC - Yahoo! Finance

I own some shares in Penton Media, so beware of the bias that two bits and a cup of Joe's worth of "assets" can create. The last few days, there's actually been an upward movement in this stock, with some higher-than-average volumes. Someone's buying. And it's moving up a lot today (as of 11:50 am, est).

Of course, the company has a market cap of a little over $5 million, against an enterprise value of $315 million (according to Yahoo), which is offset by debt of $328 million. So the size of the market cap is a relative thing.

It would be great to see Penton turn it around. I could use another cup of coffee about now! So who's buying?

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True Tales of Customer Service 

I've been thinking a lot about customer service and customer loyalty. Two stories:

1) I bought a fairly expensive HDTV from Best Buy last Thanksgiving. It ceased working two weeks later. Four service calls later, it was working again--at the end of January. First, avoid Samsung DLP TVs--they're poorly made (though have wonderful pictures when they work).

I was a pretty darn good customer of Best Buy's--spent about $7,000 in the last year on business and personal equipment, and was a member of their Business loyalty program. And while their service tech was great--I got to know him quite well--there's something broken in the Best Buy system. Good customer, expensive TV, multiple service calls. The TV should have been replaced immediately.

But as I found out later, the Best Buy service department isn't empowered to make that decision. And I was, frankly, too busy to head back to the store and dump the TV in their parking lot. I wrote a letter to Best Buy's CEO, and haven't heard back. But Best Buy's customer management system must be noticing that I haven't shopped there in a while--I'm getting a bunch of coupon offers. Upshot: I'll never do business with Best Buy again. Loss: one very profitable customer.

2) Valentine's Day. I use a florist called My Florist and Exclusively Roses. I order online, and the service is seamless. I send flowers to my wife (which arrive) and flowers to my mother (which don't). I send flowers to my aunt, who's not at home. In my mom's case, the delivery guy promises to make it better--he'll deliver a special bouquet for the day after Valentine's Day at no charge, because they messed up. Which they do.

In my aunt's case, a neighbor calls the florist to say there are flowers sitting unclaimed on my aunt's doorstep. The florist calls me, arranges to have the old flowers picked up, and sets up a new delivery date for when my aunt is at home. No charge, even though I made the mistake.

I've been a good regular customer of this florist for a long time. Gain: a loyal customer for life. (If you live in the DC, MD or VA areas, use them!)

Salient fact: the front line people make all the difference. When empowered to make things right immediately, customer loyalty is assured. When unable to do anything but follow the rules, a customer is lost.

Next fact: word of mouth is very powerful. I'm so irked at Best Buy (and Samsung), that I can't resist telling my story again and again, especially as a friend admires the now-working HDTV. It's becoming a crusade. No more Best Buy, no more Samsung!

Next fact: Best Buy had a lot of chances to make it right. But getting discount coupons for stuff I don't need, instead of some kind of response from their 'customer-focused' CEO--an apology would have done it--was the last straw.

B2B media hook: Do we empower our salespeople, editors, circulation staff and payables/receivables teams to make it right when we screw up? Even if it's not our fault? Check out Corry Publishing, and the titles they use for their customer service people: Customer Relationship Manager, Customer for Life Director. If they follow up on the promise of those titles, their customers must be lucky indeed.

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Wednesday, February 16, 2005

Affinity Media 

I've drawn the following in toto from BtoB's Media Business e-newsletter--couldn't find a link to point to.

Cygnus forms affinity group for 'AMT' readers
Fort Atkinson, Wis.—Cygnus Business Media’s AMT, a magazine aimed at aircraft maintenance workers, announced the launch of an affinity group for its readers. The group is called AMTSociety. Members will have access to vendor discounts and giveaways, subscriptions to both the print publication and the electronic monthly "AMTe Newsletter," two passes to Aviation Industry Week and free access to the Aviall Maintenance Symposium.


I'm a huge believer in building affinity programs, if they're done right. Having spent a decent amount of time selling high-dollar subscriptions to business newsletters, magazines and news syndicates, I've come to the conclusion that it's easier to sell membership in something than it is to sell a subscription to a publication or a ticket to attend a conference.

I'm a rabid member of the Aircraft Owners and Pilots Association, for example, and get my magazine, AOPA Pilot, as part of that. It's not the best magazine serving the market--that would be Flying--but I don't think twice when I renew my membership. I do, however, give thought to the other aviation magazines I subscribe to (way too many, according to my wife). I occasionally drop one.

I think there's a way to translate the concept of membership (whether free or paid) to business media. Of course, you need to have a strong brand, and an audience which defines themselves around your subject matter. But what better way to build a sustainable business, with high renewal rates and low renewal costs? What better way to build true ancillaries? What better way to build commitment and loyalty among your audience?

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Traditional Media Realpolitik 

Political Bloggers - the new paparazzi

Yow! Some depressing thoughts from Mark Cuban on "how to deal with" bloggers. And an even more depressing vision of 'traditional' media.

Grab: Bring in the more popular blogs that like you, and the same number of those that don’t. Give them as much access as you give the NY Times, Wash Post. Don’t muzzle them, let them write.

I will tell you exactly what will happen next. The blogs you invite in will still try to trip you up, but they will quickly morph and act like traditional media. [emphasis added] When you screw up, they will tell you when it happens and give you a chance to comment and respond. They will like being on the inside and adjust to try to stay there.

The bloggers left on the outside will continue to try to trip you up, but will spend more time and energy trying to tear down the bloggers who got inside the gates. Jealousy is a bitch.


While I'd like to argue with Cuban's realpolitik, I can't. And it points to the danger we in business media always face. We want to be part of the industry, to have access. So we adjust, police ourselves, practice self-censorship.

There is another way, of course. Rather than trying to join the club, we should be creating the clubhouse. That is, we should shape the conversation of the industries we serve, rather than trying to elbow our way into the inner circle.

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Tuesday, February 15, 2005

To What Do We Owe the Honor? 

When Covering Party People, Is Three a Crowd? (washingtonpost.com)

We like the DC-area, our home for the past decade, and to our California-bred eyes, it's always seemed a little cooler than its staid, lawyers-on-steroids-but-about-as-interesting-as-lawyers-on-depressants image. But we're about to welcome three new magazines to our market, joining the venerable Washingtonian, which seem dedicated to making us even more cool (or at least better dressed).

Some sample grabs from the Post piece (linked above):

Washingtonians unzip at night.

We don't care who you vote for as long as you have good shoes on when you do it.

What about the rest of us who want to be hip and fashionable and aren't millionaires?

And the best:

As for the boom in glitzy mags, Carroll says, "Everybody had the same idea at the same time, it looks like."

Aren't we DC-metro folks lucky?

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Good Editors are Salespeople 

Old-time trade journalism

I enjoyed Paul Conley's memories of The Waterways Journal, linked above, and I agree with his position that editors/reporters shouldn't be selling advertising. But I've always felt that editors are the chief salespeople of their magazines. For some of what I mean by this, check out my recent observation on media branding.

Good b2b editors are passionate about their magazines. They care deeply about their audience, and scour their BPA audits to see if they're reaching the kind of people they're editing for. They get involved in circulation promotion and list acquisition. They sit on panels at conferences, and carry copies of their magazine to lay out on tables. They scour letters or emails to the editor. They care about the reputation of their magazine, and want it to be a shaper of market opinion, a thought leader. They push salespeople to sell more ads (which not only gives a bigger editorial well, but makes the magazine look successful--after all, who wouldn't want to advertise in this amazing creation of theirs?)

Good editors have a good part of their sense of professional self-worth wrapped up in their magazine.

It's one of the reasons I think good editors make the best publishers. They understand the whole product, and its value to both readers and advertisers. And they've created that product. It's their baby, and like all babies, it's the most beautiful and smartest baby of them all.

No good editor should be peddling space. But neither should any good editor think that advertising is the enemy, encamped on the other side of the Chinese Wall.

Well, off to peddle some space myself today. GRID Media is helping to give birth to a new editorial baby. Ain't she beautiful?

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Monday, February 14, 2005

At the bottom of the list 

Penton, Primedia At Bottom of Outsell's Quarterly Scorecard

From the Department of Useless Lists Department, Weak Thinking Division:

Grab: The top ten [media companies] also used acquisitions more aggressively than the other companies, says Outsell VP and lead analyst Chuck Richard. "The companies that want to get out of the bottom ten should look at how their peers are capturing the growth," added Richard. "You can't throw up your arms in this market and say that money can't be made."

But...

"Penton Media is suffering from an overly aggressive acquisitions program that happened from 1999 to 2000 and now they have a heavy debt load," says Richard.

Uh...if the top 10 media companies are acquiring aggressively, and Penton and Primedia are suffering from having made aggressive acquisitions, but should consider emulating the actions of the top 10, does this analysis actually mean anything?

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Meditation on Mediation... 

Are Newspapers Dead?

The Scobleizer ponders this question. Which leads me to ponder further. A lot of thinking goes into gnawing on the bones of specific media--especially 'old-style' media.

But the whole framework for thinking about this may be wrong.

Aren't we confusing medium with mediation? A specific medium--newspapers--faces a number of challenges. But the act of mediation--of the careful weeding-through and analysis of information (see my recent post on that word!) remains important, regardless of the physical medium. Simply because Scoble denies himself the pleasure of ploughing through a physical newspaper, doesn't mean that he doesn't rely on newspapers, as his post makes clear.

The trick, for both 'old-line' publishers and for the new gang of blogger/publishers, is to mediate information into something useful and worthwhile--and figure out how to get paid for that.

For the record, yesterday, I read the Sunday New York Times in two forms. In the morning, I scanned my email feed, and read a few articles on-line. And then, after a day spent at a trade show, I enjoyed a glass of wine, and some quiet time with my wife, while we swapped sections of the physical paper. Both the web version and the paper version offered their own pleasures and insights.

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Sunday, February 13, 2005

Observations on Media Brands (Part One) 

Defending Vogue's Evil Genius - The brilliance of Anna Wintour

A few posts back, I promised some observations on media brands. I don't believe you can successfully spin off ancillaries, and I don't think you have a sustainably profitable b2b play, unless you have a brand. But be warned: this post rambles. I'm still thinking it through. And maybe your feedback will help.

Observation One: The true media brand is always personal and human. That is, the brand is created by or represented by a relationship between a human who works for the media property and the industry or market that media property serves. I'll define the relationship in a minute. But this 'personal' relationship then transfers to a relationship between the media property and the audience. And that makes a brand.

So let's break it down into pieces.

1) A true media brand is always represented by a human. Check out the link above for a consumer media example. Yes, there are a lot of people who hate Anna Wintour. But her taste and decisions have created a personal relationship between her product and her audience. There are a number of famous examples of this: Hugh Hefner, Helen Gurley Brown, Martha Stewart, Henry Luce. Some are "founders," like Hefner, Stewart and Luce. But others take an existing media property and recreate and revive it, like Wintour or Brown.

It's easy to pull up consumer media examples like this. And while many of them tend to be editorial people, there are exceptions. Look at Ted Turner, with CNN. He was the human element of that brand. There's no way Fox could have caught and passed CNN if Ted were still involved.

2) B2b media features a number of cases of personal brands. I'll mention a few I've had the pleasure of encountering.

min, The Media Industry Newsletter, has been around for 55 years. But its current must-read status is the result of Steve Cohn, its extraordinary editor. Peter Bart is the reason Variety continues to be a Hollywood must-read--and why he survived the controversies he was embroiled in a few years ago. Folio: was a brand when I was learning this trade, because Joe Hanson built a magazine around his interests and experiences in b2b. I think Tony Silber is going to successfully revive that brand.

3) How do you define the personal brand in b2b? The brand icon (who represents the brand and is the brand) is a player in the market. A mover and shaker. He or she knows the other key players personally. He or she creates a product which changes the market, shapes it--as an insider, and not just a reporter. Brand icons are often seen as quirky and eccentric, but that 'difference' makes all the difference. They speak on panels, talk to the consumer press. Their opinions are sought by market leaders. They're experts. They say what they think, no matter how un-PC.

4) This is not, however, a 'cult of personality.' Media brands can and do transcend their people. No one is, ultimately, irreplaceable. But a lot of media companies blow their brands by not replacing a brand icon with another brand icon. Two examples:


Years ago, I published against Harry Newton (pictured), who founded a variety of interesting b2b properties. His publication, Computer Telephony, became the big dog in that nascent field, because Harry was a player, a personality. He was the ringmaster and emcee of his trade show. His personality was all over the pages of the publication. It was fun to read what Harry had to say, what computer tips he had (unrelated to telephony--just cool things he found he could do with his computer). Harry made people--especially advertisers--very mad, but they felt they had to do business with him, even as he dissed their products, because he was The Man. Then Harry sold off his company for $130 million, and without him, his products withered. They had been corporatized. And the personal connection with the brand was lost. It was very hard to compete with Harry.

Another example:

Comdex couldn’t survive its corporatization. Sheldon Adelson created something amazing--the largest and most annoying trade show in the world. But once Sheldon was out of the picture, the personal relationships started to fade. And then major exhibitors started finding that they could do without multimillion dollar booths and parties, and then finally, the 200,000 people who braved Vegas’ cabs and lines finally stopped attending. (I know that many out there will disagree with my analysis here, but how many of you think that Adelson couldn't have anticipated--and shaped--the changes that the computer market went through to the benefit of the show?)

But again, the brand icon can be replaced, if the media company thinks in those terms. If you're stuck in the world of head counts and revenues per employee, you may not fully understand why your media properties have the power they do, and how to sustain that power. (Here's a question: if you happen to own or run a true media brand, which has a mover & shaker at its core, do you have a succession plan in place? Most public companies in the US don't have real plans for CEO succession, either. And many of the Fortune 500 are run by brand-icon-types.)

5) There are some other ways to see if you have a true brand. There’s a difference between a media property used by the movers and shakers, and a media property the movers and shakers need. I remember being incredibly impressed that Bill Gates was walking the show floor at an event called Intermedia (some ten years back). But Gates was using that show, just as he used Comdex in the post-Adelson era. He didn't need it. He does need Herbert Allen's annual confab. And that's a big difference.

I mentioned CableFax and Ted Turner a few posts ago. Turner used CableFax, but also needed it, as do many cable executives. That's because CableFax specializes in insider information--stuff you can chatter about at a cocktail party. It's filled with irreverance and attitude. If you're a player in cable, or a player-wannabe, you have to read CableFax. And it continues to reflect the eccentricities of its founder, Paul Maxwell (pictured), long after he sold it to Phillips Business Information (now Access Intelligence), because he's still involved with it. Still shaping it. Kudos to my friend and former colleague, Nancy Maynard, for pulling this off.

6) In the ‘conversational’ world of blogging and realtime analysis and opinion, the same holds true. In fact, blogging is perhaps the best example of what I mean by personal branding. The bloggers you trust are brands, because they’re people with opinions you trust. You build a personal relationship with the blogger through his or her posts. I read Rex Hammock because he’s a player, he knows what he’s talking about, his opinions and taste matter. And because he's funny, and thoughtful, and eccentric in his choices of post-worthy matter.

How many b2b executives understand what brands they have and what brands they don't?

More of my observations on b2b media brands to come.

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