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Bob Sacks

Truth in Advertising?

Bob Sacks Consumer - 12/01/2014-13:58 PM

 

As the most recent MagNet reports came in, I started to ponder other recent changes in reporting on the magazine media industry. You will remember that the Media Industry Newsletter (MIN), which had until recently been chronicling the magazine industry's ad page performance for almost 70 years, was asked to stop tracking and distributing "sold" ad page data to media professionals with its legendary Boxscores. MIN editor-in-chief Steve Cohn reported that publishers were being discouraged from turning over their numbers as the MPA, the Association of Magazine Media, was getting ready to unveil a new way of calibrating the industry's performance called Magazine Media 360. Now that the Industry has done away with min’s Boxscore reports, what do we know about the performance of our industry?
 
As I read the most recent chart derived from the 360 numbers in MIN there was not a single negative number of followers  for any magazine, nor was there a difference in the % of Differential in Followers from September to October. So, Bravo to all! Web followers have not gone down in a month and in some cases they have grown considerably. According to the report, there are now mostly positive numbers for the magazine industry.

We also now have the ability to track the number of e-shares, e-posts and e-reply's on any given month. How are ad pages doing? That information is no longer distributed to the professional public at large. We can guess, but we do not know. Is guessing better than knowing? Perhaps in some cases it is.
 
At the same time as we all know, almost every magazine media company still counts on their print editions and not the web for the majority of their revenue. There has been some progress in gaining some web dollars in this exchange, but in most cases, they haven't come close yet to a print replacement. I believe eventually digital revenue will supplant print as a major revenue source, but clearly not quite yet and at least not yet for most titles.
 
Which brings me back to the MagNet report which noted that U.S. magazine newsstand sales fell 27% in third quarter of this year, a larger loss than usual, but for clearly obvious reasons‚ÄĒSource Interlink's bankruptcy. It worth noting that sales in stores that were uninterrupted in the third quarter by the Source-Interlink bankruptcy were only down 10% in sold units and this it turns out was the newsstand's best performance, in those stores in the last six years.

I thought I would try and discuss the industry's understandable wish to camouflage the continuous array of bad stats and sublimate them with always positive web-only engagement data.

Here's a question. What does a "like" mean to your business? Does it mean anything at all? The fact that it is now more important to track "likes" on Facebook, pictures on Instagram, and conversations on Google+ rather than to face the nuts and bolts realities of our publishing businesses' main revenue streams still seems a bit unusual. I must admit that eventually some of those numbers might be more important than actual print statistics, but not yet and not now, and not the numbers we are collecting.

According to Chris Gayomali in Fast Company in a recent article about social networking sites:
 
"The crux of the research suggests that brands are wasting their time, effort, and money on Facebook and Twitter to diminishing returns. 'A study conducted by (Forrester research) from earlier this year found that posts from top brands on Twitter and Facebook reach just 2% of their followers. Engagement is even more measly: A mere 0.07% of followers actually interact with those posts.'"
 
He goes on to say, "Basically, if your brand is looking for engagement on social media you're probably better off turning your attention away from giant networks like Twitter and Facebook. This is especially true if you're trying to engage fans on Twitter, where context is lacking and being funny is hard."

Let's look at this just a little closer and now look at Instagram. In an article from Digiday titled Three magazine publishers winning at Instagram, they suggest, "For publishers Playboy, Natural Health and GQ, for example, Instagram has quickly become an effective new way for them to reach readers as they flip through their phones. Magazine publishers collectively have 20 million followers on Instagram, according to a new report from Magazine Media 360, which analyzed the social media feeds of 166 magazine brands."
 
The report goes on to state:
 
"Natural Health has nearly doubled its number of Instagram followers over the last year (they're currently closing in on 20,000 followers)."
 
"GQ was an early Instagram adopter, and is now the fourth largest magazine publisher on Instagram with more than 1.2 million followers"

"Playboy is another 'inherently visual' brand whose content has translated well onto Instagram. It's currently the third most popular magazine publisher on the platform at 1.6 million followers. "

Do these new statistics show a new way of calibrating the industry's performance? Yes and no. They do show some nice positive statistics, but when you compare those numbers to how the actual print magazines are doing you get a different picture.
 
Here is how those titles play out on the newsstand. Natural Health, ranked 454, makes a bit more than 1 million in revenue annually and is showing year on year (YOY) unit growth in the low single digits. Playboy ranked 132/under 4 million in revenue and GQ 53/over 7 million in revenue are both down in the -20% range YOY based on units sold.
 
So the success on Instagram doesn't necessarily equate to a more vibrant mothership title. In fact, you might draw the conclusion that there is no relationship between Instagram success and a title's actual sales vibrancy.
 
My analysis comes down to this‚ÄĒlikes are easier to get than selling a magazine on the newsstand. Likes are easier to cajole from a free and easy public than increasing subscription sales. A like has no commitment, no out of pocket expense by the liker, and means nothing to anyone except those who propose to somehow profit from being liked. It is a semi-random click without too much significance by our readers nor does it have long-term merit. It is worth noting that there are several BtoB cases that have been pointed out to me, where publishers are working likes into new revenue streams, but on the whole that is a rarity and not yet common place.

And when you consider corporate America's rabid pursuit of likes by almost every major company in any and all industries, it just further cheapens the value chain of these liked experiences all the more. This pursuit of likes takes a once somewhat meaningful social networking tool and debases the value of all crowdsourcing. This is nothing short of corporate exploitation of the public's largess and will one day be seen for what it is‚ÄĒthe overused saturation of a once pretty good idea, into the open pit of social mining for likes on a wholesale basis. When likes were home grown, organic and intimate they had a real value, but mostly to those who actually knew each other.
 
Now strangers like strangers for little apparent reason other than to befriend another human being or some business from a distance, but not necessarily with any real and understandable close connection. Despite what some politicians say, corporations are not people. And you can't really like a brick building, a giant warehouse, or industrial mega-makers of things, with the possible exception, so it seems, of Apple Corp.

Magazines on the other hand, aren't meant to be widgets. They are club building, membership-thinking, associations of like-minded people reading content of a specific and curated nature. So it makes sense that social networking should be part of the modern "magazine mix". Social media is a natural extension of the family of magazine products.

But what does it say when the sales of your mothership title continues to slide, while your ability to have non-revenue producing social networking numbers continues to rise?
 
What is the correlation between the printed magazine's tumble and the growth of your social network? Is it a meaningful indicator of the magazine media's transformation from one substrate to another?
 
It seems clear to me that the more time our readers spend with our ancillary web products, the less time they spend with our original major revenue producing print magazines. And that is a real business conundrum.
 
I have stated several times in these pages that I fully understand the need, desire and hope to change the topic of conversation from one of negativity about print to an industry statement that is about quantifiable and provable growth. The new metrics indeed do show web engagements with magazine media brands and a positive track of capturing our reader's web/mobile leisure time. But we haven't monetized those captured readers. In most cases, although there are some exceptions, we haven't yet as an industry found a way to make the digital leap and monetize our web successes.
 
By the latest reports print sales are down yet again, while the web interaction of our readers is continuing to rise at a rapid pace. Let's suppose that both trends continue into next year, and that print sales are again down a conservative 7%, while web engagement rises 100%. What conclusions should we draw from this for the magazine industry?
 
Should we track the engagement factors of the web communities that we create? Yes, of course we should. But will the numbers that we currently track in any way stop or explain the trends of the print side of our business? No, I think not. Will the advertisers finally decide that all the e-shares, e-posts, e-likes and e-replies on the internet and with mobile engagement now qualify print titles for more print advertising dollars? Again, I think not.
 
Advertisers will always go where the readers are, and we are proving in no uncertain terms that many of our readers are engaged and on-line, that they are very active and in continuously growing numbers using other than our apps and web sites in ever greater numbers.
 
Publishing reports should be transparent and filled with information in order to get a full picture that calibrates the entire industry's performance. They should include circulation numbers, advertising page counts and also digital metrics, all of which together tell the combined and robust story of our magazine media industry. Leaving out print data deludes no one, while it sends out a defensive note of great corporate discomfort with that part our business, which is, in fact, still the most profitable part of the industry.

What we really should be doing is building and tracking the public's interest on our own sites and apps, instead of someone else's site. We shouldn't be the pilot fish feeding off the droppings of sharks; we should be the sharks. For survival we need to have a direct lucrative relationship, with the paying/reading public and not a third-party referred relationship.

Update: MPA's Mary Berner responded, which Bob Sacks subsequently published on his blog. Her comments:

While I always appreciate your often thought-provoking point of view, even when it isn't a positive one, I take exception when the point-of-view is derived from inaccurate information as in your column "Truth In Advertising - Magazine Statistics, Magnet, MIN, and MPA 360". While you usually call it like it is, in this case, you called it like it isn't.
 
Here are the facts:
 
MIN ad page data and Magazine Media 360:
Because approximately 80% of advertisers who advertise in magazine media buy across multiple platforms, print ad page metrics are not only anachronistic, but by virtue of ¬†capturing an advertiser's print activity only, present ¬†an incomplete and therefore inaccurate ¬†picture of a magazine brand's overall advertising performance. In the old days if a title's ad pages were up, that meant that advertising in that brand was up. Today, if a title's ad pages are up, it doesn't necessarily mean that advertising in that brand is up. And vice versa. ¬†Today, the only way to accurately portray the advertising performance of a particular magazine brand would be to capture the activity across platforms and formats in a given week or month. At this point‚ÄĒthere isn't any way to accurately do that for magazine media or ANY OTHER media for that matter‚ÄĒhence the focus on the one common and comparable currency: CONSUMER DEMAND (which is what Magazine Media 360 captures).
 
Given this set of facts, the MPA Board decided that it was not only misleading, but just plain inaccurate to continue to provide MIN with incomplete data,  which is what paging data is. While the min Boxscores may have been "legendary", they simply ceased to be accurate.
 
I can also ¬†say with confidence that the Magazine Media 360 report isn't an "attempt to camouflage the continuous array of bad stats and sublimate them with always positive web-only engagement data." Instead, if you take the time to ¬†look at the data, you will see that it is hardly a rose- colored- glasses- perspective on the industry, but rather ¬†a remarkably transparent and dynamic set of third-party data that tracks the ups and, yes, ¬†downs ¬†(in October over 35 titles are down) of consumer demand across print, digital, web, and video ¬†for magazine media. As you rightly pointed out, it is too early to extrapolate revenue assumptions from this data because these are still early days for digital and the jury is still out as to which ad/consumer revenue mixes will be successful for the long-term. That said, it is crystal clear that in the wild west of multi-platform/format media, consumer demand is not only the only proxy for current and future vitality‚ÄĒit is the ONLY comparable currency across media.
 
MIN Social Media report:
The most recent chart was most decidedly NOT "derived from the 360 numbers" and has nothing whatsoever to do with the Magazine Media 360 report or MPA.  In fact I agree with you that the chart (and using social media activity as a proxy for brand vitality or claiming any insight based on this kind of data) is silly at best, and misleading at worst.
 
I can't speak to what min is attempting to do with the social media chart which, I'll note again, you mistakenly attributed to and conflated with Magazine Media 360, but with regard to your suggestion that we "really should be building and tracking the public's interest on in our own sites", we at MPA couldn't agree more and THAT IS EXACTLY WHAT MAGAZINE MEDIA 360 DOES.
 
 

 

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Bob Sacks

As a Futurist, I Was Wrong

Bob Sacks emedia and Technology - 02/15/2008-16:34 PM

As some FOLIO: readers may know, I am a principal partner in mediaIDEAS, a consulting firm that investigates and provides original research reports with actionable advice and analysis for the publishing/media industry. I have asked for and received permission from mediaIDEAS to reveal a small portion of a recent research paper whose conclusion after a detailed analysis was that full color flexible e-paper display will be available to the market by 2011.

The report goes on to say that "publishing magazines and books incorporating high quality color artwork such as those involved in the fashion/design/art sectors, and looking to develop digital editions, need to carefully monitor developments in electrowetting display technology ... Planning for this event is critical to the future profitability, and even the existence, of such publishing companies."

The reason I asked for permission from my business partners to release this portion of our Call to Action is that I believe it is critical for our industry to fully comprehend the technologic reality on our door step. We are on the threshold of a new digital age. As publishers we can adapt and prosper or wither on the vine of antiquated protectionism and dysfunction.

In 2005 I debated Samir Husni at Primex hosted by IDEAlliance in an event entitled "Fork in the Road: Which Direction for the Publishing Industry?" After the debate I was asked an excellent question from the audience: How long until publishers have to start really paying attention and worrying about e-paper? My answer was that five years from that time epaper will be real, functional and a necessary item on any publishers business plan and watch list.

As a futurist with an impressive track record of prescient predictions under my belt for the last 35 years, I am sad to report to you that I was wrong. Yes, wrong. It didn't take five years but rather three years for e-paper to be available to the general public. And the technology is growing at an exponential rate. Look around you and read the writing on your Kindle, which is currently sold out and backlogged. E-paper is here and it is not going to go away. The report from mediaIdeas and my own research is correct. Publishers must be ... planning for this event as it is critical to the future profitability, and even the existence, of such publishing companies.

This is not and should not be a fearful transition. Everything stays the same except the actual reading platform. The paginated (metered), well designed, and edited magazine experience is the same. The same writers, editors, artists, and mostly the same publishing staff will be required to "manufacture" magazines of the future. I would also add that it is not an either/or scenario. There will no doubt be both a printed version of magazines and an e-paper version available to the general public. The question will come down to one of cost and reader preference.

I recently completed a review of the Amazon Kindle. As an experienced e-paper reader, the future is clear and the current arguments about the future of e-paper are as relevant as the old discussion of whether or not film-based printing will ever be replaced by CTP (Computer-to-Plate). I'm sure we all agree that was indeed a very juvenile argument. As much as this sounds like bravado, I was right then and I'm right now. I will go further to say that someday, perhaps less than 10 years from now, the e-reading experience will be more preferred by the majority of the reading public than the inefficient, costly, environmentally unfriendly, and extremely dated current magazine methodology. Are we there yet? NO! But you can bet your bottom dollar that we will get there. And if you don't believe and prepare for it, it will be your bottom dollar.

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Bob Sacks

No Reason to Panic About Quebecor

Bob Sacks Design and Production - 01/21/2008-14:36 PM

As upsetting as this news may at first appear, it is not a reason to panic. The presses are running, the paper is rolling and ink is being placed within tolerances of 1/1000th of an inch, as per usual with a rhythm and a predictable schedule.

They have received $1 billion dollars to create and sustain moderate stability. And all they need for now is the stability to forecast the next few quarters of business cycles. After that I don't know what will happen and neither do you, but I suggest that for today and tomorrow it is business as usual. If your titles were to ship this week, I would expect them to do so. If your titles were scheduled to ship next week, the same holds true. It is a time of transition and change, but not of wholesale upheaval. It's my experience that, under conditions like this, all titles will get out and all publishers will continue to publish. The details of this and the plains of action, lay with the accountants of the world.

As I heard New England Patriots coach Bill Belichick say last night, "Be smart, stay alert and do your job, and we will get through this just fine."

Dear Quebecor World Customer,

Quebecor World has applied today for court protection in Canada and the United States to conduct restructuring for the long-term interests of the company, its customers, suppliers and employees. As part of this process, Quebecor World has secured US $1 billion of new financing to continue to provide you and all our customers with reliable, quality services on a business-as-usual basis. Our operations in Europe and Latin American are not included in these filings.

The approval of $1 billion in new financing through Credit Suisse and Morgan Stanley was included in the court applications under Canada's Companies' Creditors Arrangement Act and Chapter 11 of the U.S. Bankruptcy Code. In addition, Quebecor World is seeking the appointment of Ernst & Young Inc. to monitor the company activities in the Canadian proceedings.

Despite the difficult economic conditions in general and in the credit market in particular, Quebecor World continues to have a positive cash flow, expert teams of experienced employees, valuable, performing assets and an impressive roster of customers such as you. In the months ahead we will be reviewing the company's performance and developing ways to make further improvements in all our operations.

The prudent action we have undertaken today and the vote of confidence represented by the $1 billion of new financing means that we will continue to operate on a normal basis as we restructure for the future.

We look forward to maintaining our business relationship with you.

Quebecor World's commitment is to keep customers, suppliers and employees and other stakeholders informed of all significant developments, either directly or through our webpages on the Internet. Please do not hesitate to contact us if you require further information. We will make every effort to respond in a timely fashion.

Thank you in advance for your patience and support as we work to achieve an outcome that serves the best interests of our customers, employees, suppliers and other stakeholders.

Sincerely,
Jacques Mallette

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Bob Sacks

Stop Worrying About the Future

Bob Sacks emedia and Technology - 12/03/2007-11:46 AM

This has been building up in me for a long time. All of this BS about publishers fearing the future, worried insanely about going out of business. They can't figure out what is happening and where their place in the future of information distribution is going to be. Damn it all, guys grow up. The future will take care of itself. It always has.

Ask the old parchment makers. Do you know that it took over three hundred sheepskins (parchment) to make one fair sized bible in the 1600s? You do the math. Publishers found a better way to distribute their information. It was called paper. They did it and they did well. Did the public love parchment? Most likely, but paper was better and cheaper. So, here we are and last week a major paper supplier stated that "the price of paper must double."

Does anyone else find it funny that in the very same week, Amazon launched Kindle, a WiFi connected e-paper device? It holds 200 books and weighs less than 10 ounces. How much will the publishers save by not using a printing, press, not using paper, not shipping those books anywhere but to the ether zone, ready for instant deployment anywhere on the planet?

This is just the beginning of a series of drastic and necessary changes in the publishing industry. The actual cost of paper, printing and distribution can and will only go up, the converse of a digital distribution where the costs can only go down. There will come a time soon when this is self-evident event to the most diehard of the tree hugging publishers. Ease of use and cost of manufacturing will determine the substrate of choice for the populous and the publisher.

Just for point of reference, what substrate are you reading this missive on?

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