Thursday, December 6, 2018

USPS Workers Are Overpaid and Should Lose Collective-Bargaining Rights, Trump Panel Says

Claiming that U.S. Postal Service employees are paid much better than workers at FedEx and UPS, a presidential task force wants to de-fang the postal labor unions.

"USPS employees enjoy a pay and benefits premium over their private sector counterparts, although the size of this premium is likely falling,” the Trump-appointed Task Force on the United States Postal System said in a report released Tuesday.

“Based on Treasury [Department] staff analysis of 10-K filings, in 2017, total per-employee cost at the USPS was $85,800, compared to $76,200 and $53,900 at UPS and FedEx, respectively.”

(A Dead Tree Edition analysis of a USPS report largely corroborates the claim about Postal Service compensation: Average base pay for postal employees in Fiscal Year 2017 was $25.23 per hour, which works out to nearly $53,000 annually. Benefits and overtime added about $31,000 per full-time equivalent employee.) 

The panel recommended that “the Federal Service Labor-Management Relations Act be amended to apply to the USPS and its employees,” which would ban collective bargaining for postal workers’ compensation. The vast majority of USPS employees are represented by one of nine labor unions or two management associations.

Not in the mainstream media
The anti-collective bargaining proposal, which has gone mostly unnoticed by the mainstream media, “would enable the USPS to address the costs and complications with its current labor system, and allow for better workforce planning and cost control within its rapidly evolving business model,” the panel’s report says.

“USPS employees should not be afforded protections and rights not enjoyed by other federal employees."

The Postal Service spends 76% of its budget on compensation and benefits, which the panel said is “a much higher share of . . . costs when compared against other private courier companies.” That’s despite postal officials achieving “limited labor reforms” in recent years.

“Postal salaries have risen at slower rates than those in the private sector, collective bargaining agreements have gradually transferred a portion of health premiums from the USPS to individual workers, and the USPS has been able to lower the number of employees, from a high of over 905,000 in 1999 to around 634,000 in 2018, relying more heavily on non-career employees.”

But the panel noted that the postal workforce has actually increased by about 4% in the past three years because of the rapid expansion of package deliveries.

 “Given the expected growth in package delivery services, personnel costs are expected to continue to increase in future years, offsetting the increase in the corresponding revenue,.” the panel wrote. It didn’t address the extent to which productivity gains or package-delivery price hikes could reverse that unfavorable trend.

Related articles: 

Friday, November 30, 2018

Hedge Funds Buys Newsstand Giant

Chatham apparently controls American
Media, publisher of the National Enquirer
Yesterday's announcement from the owner of the country's largest magazine wholesaler seems to have flown beneath the radar, but it could have major implications for the U.S. magazine industry. 

That's why we're publishing the news release word for word, which rarely happens at Dead Tree Edition.

We'll leave the analysis for others, except for a bit of background information:
  • The News Group (TNG) is the wholesaler for the vast majority of magazine copies sold at retail in the U.S.
  • Note that JPG will retain the part of TNG that merchandises magazines. (Wholesalers, rather than the stores themselves, are usually responsible for replacing old issues with new issues and deciding how they will be displayed.) That makes sense because JPG's massive distribution business delivers a variety of other products to grocery stores and other retailers. 
  • Comag, which started as a Hearst-Conde Nast co-venture, is one of the nation's largest national wholesalers of magazines. National wholesalers represent publishers in dealings with wholesalers and retailers, managing copy placement, billing, collections, and other services.
  • Chatham's other media investments have included American Media Inc (AMI) and the McClatchy chain of newspapers. Two Chatham executives serve on the four-member board of AMI, the privately held publisher of National Enquirer and other magazines that has been in hot water lately regarding alleged payments to silence women who had affairs with Donald Trump.

Jim Pattison Group Agrees to Sell U.S. Magazine Distribution Related Assets to American News Company, LLC

VANCOUVER, British Columbia, Nov. 29, 2018 /PRNewswire/ -- The Jim Pattison Group (JPG) today announced that it has reached an agreement to sell its United States magazine distribution business (TNG), including their interest in The News Group LP, to American News Company, LLC (ANC). The sale is expected to close by December 31, 2018 at which time executive management, and the approximately 1,500 employees of the acquired businesses, will transition to ANC and continue to oversee the day-to-day operations.

"This transaction allows the publishing community to have a more significant voice in the continued development of its supply chain and efforts to secure more efficient and thereby profitable newsstand results," said JPG President Glen Clark. "The stakeholders most impacted by this business, now have an extraordinary opportunity to be directly involved in a critical aspect of their business and will be well positioned to ensure its consistency, efficiency and sustainability."

The agreement to sell JPG's U.S. magazine business includes its distribution centers, depots, vehicles, systems, retailer contracts, publisher contracts, management personnel and related employees. Additionally, ANC will also acquire JPG's ownership stake and all related assets of Retail Support Services (RSS), Magazine Information Network (MagNet), Comag Marketing Group (CMG) and Genera Solutions. ANC will enter into a long-term merchandising services agreement with TNG Merchandising (which is not part of the acquisition and remains owned by JPG) to ensure that magazines continue to be properly merchandised at retail. TNG Canada's operations (wholesale and RS2 Canada) are also excluded from this transaction and will continue to be owned by JPG and run in the ordinary course.

"We are confident that aligning a leading U.S. magazine wholesaler with our valued newsstand partners will have a significant and positive impact on all our stakeholders," said TNG President David Parry. "Our commitment to the channel, and growth of all involved, will be underscored as we continue to work closely with our vital retail customers, suppliers and employees to ensure a low cost, efficient and long-term sustainable business. TNG will be laser-focused on ensuring a seamless transition for all channel participants."

American News Company, LLC, is a Chatham Asset Management (Chatham) portfolio company. Chatham is a $4 billion hedge fund and a longtime supporter of the media industry.

About JPG Headquartered in Vancouver, BC, Canada, The Jim Pattison Group (JPG) is a diversified group of operating businesses primarily in the United States and Canada that enjoy strong and positive market reputations, with most occupying leadership status within their respective industries. JPG's operating divisions span the automotive, advertising, media, agricultural equipment, food and beverage, entertainment, exporting, financial, real estate and periodical distribution industries. JPG has grown to be Canada's 2nd largest privately held company with over $10.1B in annual sales and more than 45,000 employees world-wide. For more information please visit www.jimpattison.com.

About American News Company, LLC American News Company, LLC (ANC) will, upon closing the announced acquisition, be a leading magazine wholesaler in the United States for publishers and retailers. ANC, through its subsidiary Comag Marketing Group LLC, will be a leading provider of national distribution services, including billing and collection and sales and marketing services, for publishers. MagNet and Retail Support Services, both subsidiaries of ANC, will offer licensing of magazine sales information and retail display services, respectively, to publishers and retailers.

SOURCE The Jim Pattison Group
Related Links http://www.jimpattison.com

Related Dead Tree Edition articles:

Wednesday, October 24, 2018

What Is the Easy Path to Publishing Riches Overnight? A Delusion

Dead Tree Edition: the early days
When I started this blog a decade ago this month, the Get Rich By Blogging Hype Machine was just getting revved up.

Within a few years, pundits declared that blogging is dead, just as they had declared that “Print is dead” a few years earlier. (Both media have shown an annoying tendency to flash a giant middle finger at the pundits, adapting rather than extincting.)

Meanwhile, the bloggers who had been trying to make money from consulting to other bloggers had moved on – to become, I suppose, black-hat SEO experts, then white-hat SEO consultants, then social-media marketers, content marketers, or whatever the current shiny new title is for the buzzards who feed on greed and insecurity in the online world. (Other than “Facebook executives”, that is.)

So when I looked back over the biggest publishing delusions of the past decade for my recent “Decade of Delusions” article for Publishing Executive, the easy-money-from-blogging delusion didn’t make the cut. The blogosphere’s version of the Pets.com sock puppet no longer seemed relevant to the publishing world in general.

People eat this stuff up
(Note to other publishers: It turns out that people love reading about how self-appointed experts got it wrong.. I’ve been amazed by the overwhelmingly favorable, and insightful, reactions to the “Decade of Delusions” article. Whatever your beat, consider publishing a list of recently exposed delusions and false prophecies on the subject.)

But I subsequently realized that the delusion hasn’t died, just morphed into other forms that can generally be categorized as “Just put it out there and watch it go viral.” For example, "Follow the secret formula for getting on the first page of Google." Or "Make a fortune by pivoting to video because no one wants to, like, read words any more."

And "Put your messages on Facebook because everyone’s on Facebook." (I know a store owner who literally drove her business into the ground by following this strategy. She put all of her limited marketing budget into creating Facebook promotions when she would have been better off with a bit of advertising and using her email list properly. Turns out “everyone” on Facebook avoids self-serving promotions like the plague.)

Book-publishing guru Jane Friedman recently advised fellow authors to stop trying to turn their books into best sellers: “It seems counterintuitive, but rather than seeking a broad audience, you should focus on a narrow one.”

Building your tribe
That’s good advice for anyone trying to build an audience. Unless you have a huge following or huger financial resources, the path to success usually starts with focusing on an under-served niche and finding, or building, a “tribe” of people with similar passions. Create a book, blog, magazine, web site, video, podcast, or whatever that serves your tribe's needs better than anyone else does. The tribe will decide if you're ready for a larger audience -- and will help you get there.

LinkedIn has done more for Dead Tree Edition than Facebook has. Sure, every once in a while someone with a big Facebook following posts a link to one of my articles, and it goes viral. But that doesn’t build a sustainable audience.

The page views from posts on LinkedIn groups are typically anemic. And God knows LinkedIn keeps revamping its groups in ways that seem designed to discourage participation. But much of the Dead Tree Edition tribe discovered this blog via relevant LinkedIn groups. They keep coming back, keep recommending my articles to others, and sometimes complain that I’m not publishing as often as I used to do. Twitter has worked similarly, doing more to build the tribe than to drive clicks.

Good old-fashioned email has been my most effective social medium -- not email blasts but rather personal emails to editors and other influencers pointing out a particular article that might interest their audience. And sometimes exchanging information with them. Getting referrals from them has brought new followers and has enabled Dead Tree Edition to do pretty well on search engines despite zero focus on search-engine optimization.

Fortunately, I started blogging not to get rich but because I wanted to understand better how the web works and because some topics weren’t getting the coverage they needed. Blogging can demonstrate your expertise, gain you new friends and business contacts, boost your personal brand, and lead to writing and speaking engagements (unless you stubbornly insist on remaining anonymous).

But if you’re just looking for a way to make money in your spare time, you’ll find that delivering pizzas is more lucrative.

Other recent Dead Tree Edition articles about publishing include:
 

Monday, July 30, 2018

Failed Sequencing System: No Wonder USPS Still Hasn't Fixed the FSS

If ignorance is bliss, as the old saying claims, then the U.S. Postal Service must be in a truly blissful state about its billion-dollar Flats Sequencing System.

The USPS Office of Inspector General released a report last week claiming:
• Postal management doesn’t know whether the 10-year-old FSS is saving money or work hours.

• Sorting catalogs, magazines and other flat mail on FSS machines costs 6 cents per piece, versus 2 cents for the older Automated Flats Sorting Machines. In theory, the USPS could be making that up in improved efficiency at the delivery units, but “the Postal Service does not have any current information about carrier work-hour savings related to FSS processing.”

• The Postal Service doesn’t seem to be doing anything to track, understand, or correct one of the FSS’s biggest problems – flat mail that is supposed to be sorted on the football-field-sized machines but is instead processed on the AFSMs or manually. An in-depth study of five Atlantic Coast FSS facilities found an average “leakage” rate of 23%. (Dead Tree Edition’s opinion is that such a high leakage rate makes it virtually impossible for the FSS to achieve net savings. More on that below.)

• When FSS facilities receive mail that can’t be run on the machines, they simply divert it to other means of sorting without reporting the problem. That means there is no feedback to those who could prevent such problems from recurring – such as mailers, printers, and the postal employees who write or enforce flat-mail specifications.

“Processing flats mail on AFSM machines and having the carriers manually sequence the flats may be less expensive than processing flats using FSS machines,” says the report -- a statement USPS management called “unsupported,” without providing contrary evidence.

“Given the significant investment in these machines and their poor performance . . ., management needs to fully understand all the costs associated with the machines to best inform its decision going forward,” the Inspector General’s report says.

Productivity of the machines themselves is not an issue, the report indicates. The 18 Capital Metro Area (Maryland to Georgia) FSS machines average throughputs per labor hour during the 15-month study period exceed the goal of 1,650 by 1%.

But because of leakage and declining volumes, the machines are underutilized. The machines were run an average of 12.5 hours per day rather than the goal of 17 hours.

Who's minding the leakage?
At all five FSS sites the OIG staff visited, “flats mail was removed from FSS preparation areas because it could not be processed on the FSS due to its thickness, size, or unreadable address or barcode.” Such out-of-spec issues are supposed to be documented so that postal officials can work with mailers to prevent the problems from recurring.

USPS's FSS Vision in 2011
“None of the five facilities we visited used the electronic Mail Improvement Reporting (eMIR) system, as required, to report the flats mail problems we observed,” the report says.

“Management at four of the five facilities we visited said that prior eMIR system reports did not resolve mail problems.”

“During the audit, we repeatedly asked management to provide quantitative data categorizing the leakage causes. Although management informed us they had that information, nothing was provided. In addition, management expects mail processing facilities to optimize their processing windows to minimize leakage; however, without knowing the specific cause(s) of leakage, processing facility management may not be able to mitigate leakage.”

In response, USPS management indicated that late deliveries to the FSS facilities were a major cause of leakage. Each FSS facility processes flat mail in a predetermined order, it explained, so when a shipment arrives for ZIP codes that have already been sorted, the mail is diverted to other sorting processes.

(But do the people scheduling the deliveries know which ones are consistently problematic, so that they can adjust the schedules? And here’s a radical thought: Instead of considering a delivery one hour late for today’s processing, why not consider it 23 hours early – for tomorrow’s processing? That way, it can be run on the FSS, as intended.)

Strategy: We goof, you pay
Mail that is prepared in the proper sequence for FSS machines cannot then easily be sorted on AFSMs or manually. That makes FSS leakage copies a sort of worst-case scenario: The USPS’s costs for delivering them are inherently more expensive than for mail that has been prepared for and actually sorted by AFSMs or manually.

What’s even worse is that, if not for FSS, at least half of those copies probably would have been prepared in carrier-route bundles, a nearly best-case scenario for the Postal Service.

No matter how well the 77% of non-leakage mail is handled by the FSS machines, it can’t make up for the huge incremental costs of sorting the 23% of FSS mail that is diverted to other sorting methods. The Postal Service’s strategy for the FSS has been to ignore the problems while trying to pass along the costs to customers in the form of emergency rate hikes.

For further reading:

Tuesday, July 3, 2018

Put a Wrap On It: As Magazine Ads Dwindle, One High-Priced Approach Thrives

The front of 2 Audience Innovation wraps
While U.S. magazine advertising revenue has been circling the drain with double-digit declines the past couple of years, a little corner of the business has been doing just fine.

It’s a niche – or, rather, a tactic -- that probably doesn’t even show up on most magazine-industry estimates or projections. And it involves mostly the kind of big-name, big-circulation consumer titles that have suffered the most precipitous advertising declines.

The tactic is sponsored cover wraps – typically a four-page piece placed atop the regular front and back covers of select copies. Here’s a great example of one.

(Note for fellow print geeks: On saddle-stitched magazines, the wrap is simply a four-page signature that’s placed atop the regular cover. On perfect-bound magazines, the wrap acts as the magazine’s cover, spine and all, while the regular front and back covers become two-page inserts placed just inside the wrap.)

From an MNI promotion
The continued success of sponsored cover wraps, especially on copies sent to non-subscribers, has valuable lessons for all magazine publishers that rely on advertising.

Publishers have been doing their own cover wraps for decades, most often for subscription renewals but sometimes for advertiser-paid promotions.

Several companies, such as CoverWrap Communications and MNI, are in the business of selling advertising programs that involve cover wraps placed on highly respected magazines and sent to custom mailing lists.

To get a better understanding of this prosperous little corner of the magazine business, I turned to Paul Kostial, the founder, president and CEO of another of those companies, Audience Innovation.

I called on Paul because he has been focused primarily on cover wraps for years and is passionate about the subject. Plus, I met him a few years back (He’s not aware of that.), so I know he’s the real deal.

“Our programs are really direct marketing,” Kostial says, adding that his company is usually selling to the people who handle direct marketing and not to those responsible for ad buys.

"We’re just using a magazine to do direct marketing because the content is still valued.”

“A lot of our clients use this program because they are not big enough necessarily to even be in the magazine full run with ad pages,” Kostial says. Sales revenue at AI (the company, not the technology) were up in 2017, he says, bucking the estimated 15% decline for U.S. magazine advertising.

Hitting home
“It’s really hitting home right now with a lot of clients that are having a hard time with their digital strategy.”

An MNI wrap
Many AI campaigns focus on two hard-to-reach groups – business decision makers and affluent people. Using a multitude of data sources, AI follows the client’s specifications to create a hyper-targeted mailing list that often has fewer than 5,000 names. From a stable of more than 400 titles, including offerings from most of the major consumer publishers, AI and the client select the magazine most likely to appeal to the target audience.

A campaign typically starts with an introductory letter or postcard announcing that the sponsor will be providing a complimentary subscription to the magazine for up to a year. At least four of the issues include a cover wrap with the sponsor’s messaging.

“Because the magazine is attached we get readership rates as high as 80 or 90 percent,” Kostial says. And the recipients aren’t just reading; they’re responding.

Response x 100
One client that targeted chief information officers – an overmarketed-to group if ever there was one – reported a 56% response rate to its cover-wrap campaign. Kostial states that another company aiming for C-suite executives “said they’re getting 100 times better response there than they are on their digital campaigns to the same target.”

Audience Innovation, like several other companies and publishers, offers “point-of-care” campaigns – typically copies mailed to specific types of doctors’ waiting rooms to promote pharmaceutical products. And for other types of public-place campaigns, it offers a selection of more than 400,000 retail locations ranging from hair salons to fitness centers, auto repair shops, golf courses, and B&B's.

The programs are mostly turnkey for the publishers. AI handles the sales, the printing of the cover wraps, and supplying the mailing list. Some publishers have also turned over management of their own cover-wrap offerings to AI.

The intelligence I’ve been able to gather indicates that AI’s payments to publishers are typically far greater than the publishers’ costs related to the cover wrap – mostly from bindery charges and postal inefficiency – but not necessarily enough to cover the costs of printing and mailing the copies.

From CoverWrap Communications
But because the copies count toward audited circulation, they are highly profitable for the publisher when used to displace giveaway copies or unprofitable subscription sources, an AI campaign is quite profitable for the publisher.

Kostial says there’s another benefit: “Clients using magazine cover wraps with a given magazine are also much more likely to advertise in-book too . . . and also far less likely to cut that magazine from their schedule if or when they have budget cuts.” Magazine cover wraps combine the best of digital and print advertising.

Programmatic ads can be micro-targeted to a highly select group, such as the proverbial “left-handed plumbers who drink chocolate milk.” But who actually looks at web ads these days (unless the ads are on Dead Tree Edition, of course)?

AI’s results show that people still like magazines, even though much of their reading has shifted online, and find print ads highly engaging. But there’s no magazine for left-handed plumbers, much less for those who drink chocolate milk. For advertisers who have been spoiled by the data-driven targeting of digital media, the audiences offered by big-name consumer magazines seem hopeless generic and mostly irrelevant.

CPM x 100
Cover-wrap campaigns show what happens when heavy-duty data analysis is combined with respected print brands in a highly visible format. For one thing, CPMs (the price of an ad per thousand readers) skyrocket.
An MNI wrap

At one magazine with a ratebase of 500,000, $15,000 can buy you a full-page ad – or a cover-wrap campaign mailed to a custom list of only 5,000 VIPs. That’s a $30 CPM versus a $3,000 CPM.

(I guestimate that Audience Innovation’s rates are closer to a CPM of $1,000, unless the campaign includes such extras as NFC chips or a companion digital effort. Kostial will only say that a cover-wrap campaign typically costs somewhat more than a direct-mail brochure or large-postcard campaign.)

With that same $15,000, you might be able to get 1 million or more page views from a programmatic campaign focused on a specific type of VIP – such as people with household incomes over $1 million or CIOs at major manufacturers. But how many of those views would be bots, or would only be seen for one second, or would just be ignored? And how many in the target audience would actually welcome the ads and click through to the sponsor’s white paper or product promotion?

Magazine people like to complain that web advertising has “turned print dollars into digital dimes.” Cover-wrap campaigns flip the tables, turning digital dimes into print C-notes.

So maybe magazine publishers should stop complaining and start figuring out how they too can leverage data and their trusted brands to create high-value campaigns for advertisers.

Other articles about magazine advertising include:

Monday, June 18, 2018

New Owner Casts a Queer Eye on the L.A. Times

I swear this is exactly what I saw on my phone today when I checked the Los Angeles Times web site for an update on the newspaper's de-troncification.

There's been no Photoshopping or other tricks. It really does look as if Dr. Soon-Shiong took out an ad asking readers of the Times to cast their Emmy votes for "Queer Eye".

The demand that mobile ads appear "above the fold" -- on the first screen view -- sometimes causes interesting juxtapositions. (The use of "above the fold," a long-time newspaper term, in reference to mobile ads is itself an odd juxtaposition, proving that publishers haven't fully adjusted their mindsets to the small screen.)

The actual letter from the good doctor states, "I believe that fake news is the cancer of our times and social media the vehicles for metastasis." (Wow, he's so old school he knows that "media" is plural.)

Dr. Soon-Shiong did indeed close today on the purchase of the Times and the San Diego Union-Tribune from tronc Inc. for $500 million. Or maybe it was just a four-week trial purchase for only 99 cents; the news accounts seem to differ on the details.

Tronc is reportedly celebrating the sale by planning to de-troncify itself. A move is afoot to change the newspaper company's name back to something containing "Tribune" and most definitely not containing "tronc," which was famously mocked by comedian John Oliver as sounding "like the noise an ejaculating elephant makes."



Thursday, June 14, 2018

U.S. Magazines Are in a Steep Decline, Except . . .
















Everyone who’s in denial about the sorry state of U.S. magazine publishing should take a close look at the chart above.

It shows that on a “real” (inflation-adjusted) basis, the spending on magazine advertising has dropped from about $65 per person to only about $22 in the course of just 10 years.

Those of us in the publishing business have been joking for years that “slightly down is the new up.”

But when the population is growing and prices are rising, “slightly down” means losing major ground. And in some years, magazine ad revenue has dropped way more than “slightly”.

The long-term trend for the consumer side of the business isn’t as bad, but it still sucks: The average number of magazines mailed to each U.S. household has dropped “only” by half in the past 30 years, according to a recently released U.S. Postal Service study. (The advertising chart was in the same study. The Postal Service is just full of good news these days.)

This cover was ripe for social media.
As a whole, the “magazine media” industry is in decent shape because of fairly good performance from the digital side of the house. As I note in a Publishing Executive article published yesterday, traffic at large digital-native web sites dropped 5% during the 4th Quarter, while web traffic of large magazine brands rose 5%.

The good news for printed magazines is that their credibility has a halo effect on the magazines’ web sites, which gives them a competitive advantage over their digital-only competitors. People may be buying fewer magazines, but they still associate them with quality and reliability.

With the rise of duopoplexy -- consternation about fake news and privacy abuses – trust has become a valuable commodity on the web. (“Duopoplexy” is a mashup of “duopoly” and “apoplexy,” in case you’re wondering.) And, as noted in the Publishing Executive article, the right magazine cover can do wonders for a publishing brand’s exposure and social-media presence.

But there’s only so much credibility leveraging and propping up that can be done by the digital side of the house. For long-term survival, magazines need to be able to stand on their own.

The first step to sustainability is to admit that what we’ve been doing isn’t working any more – and hasn’t been working for a long time. Too many consumer titles, for example, have inflated ratebases (minimum-circulation guarantees) that force them into offering $5-per-year subscriptions and other self-defeating practices.

And I challenge you to find a competing medium that has a more cumbersome process for buying ads than the U.S. magazine industry.

Hooray-for-print denial may make us feel good, but it prevents us from making the changes necessary to help our beloved magazines survive and thrive.

For further reading, some signs of hope for magazines:

Wednesday, May 9, 2018

Magazine Advertising Entered the 21st Century Today

The beleaguered U.S. magazine industry received some welcome, perhaps groundbreaking, news today: A major trade association is backing the launch of an automated online marketplace for print advertising.

The Adwanted.com platform could enable American publishers to fix one of their biggest weakenesses -- the cumbersome process for buying print ads, which has contributed to double-digit declines in annual ad revenue in what should be a favorable economic climate.

At the bottom is the full text of the French company's joint announcement today with BPA Worldwide, the dominant circulation-auditing and trade association for business-to-business publications.

My description and analysis of Adwanted and the BPA's involvement, "With New Online Marketplace, Print Ads May Have Finally Entered the Programmatic Age", was posted today by Publishing Executive.

And here are a few Q&As to help put this all into context:

Q: Is this programmatic print advertising?
A: It depends upon what you mean by "programmatic," but the answer is probably no. Adwanted does offer some of the best of programmatic ad buying, such as one-stop shopping from multiple publishers and automated purchasing. As with programmatic-preferred and programmatic-direct deals, the Adwanted platform recognizes the value of direct advertiser-to-publisher relationships. But it doesn't entail machine-to-machine buying; a human has to place the order. Nor does it involve bots, massive fraud, sketchy definitions of "viewability," or other hallmarks of programmatic digital ads.


Adwanted publisher's dashboard
Q: Wouldn't it have been better to get some big-name, industry-leading publishers on board first rather than building the network around niche B2B publishers?
A: Maybe, if you're good at herding cats. A joint meeting of, say, Meredith, Conde Nast, and American Media to discuss the creation of an ad marketplace would have been overrun by hot and cold running antitrust lawyers, with heaping sides of mistrust and paranoia. 

Cooperation comes more naturally to the B2B world, where publishers can network with a plethora of folks who face similar challenges but aren’t competitors. 

Also, big consumer publishers tend to have silos where the print people are shut off from the digital world and don’t see why the processes that have worked for decades should now be viewed as hopelessly anachronistic. B2B people are more likely to live in both the print and digital worlds, so they understand why print will continue to get its clock cleaned if it keeps asking 24-year-old media buyers to fill out reams of paperwork. 

Q: Why did you write that the BPA is "the organization best suited to dragging printed magazines into the programmatic age"?
A: The BPA is governed by a board made up of executives from the three types of organizations that are crucial to Adwanted's success -- advertisers, ad agencies, and publishers. The BPA-Adwanted arrangement couldn't win that board's approval without getting the input and buy-in from all three groups. Or without most of the board members' employers having already decided to join the platform.

The BPA is also able to build on the success of its B2B Media Exchange, the programmatic digital marketplace it started last year. The association's members tend to look to the BPA for such cooperative ventures that give them the capability of doing things they can't do on their own, while the MPA is dominated by large consumer publishers that tend to go it alone.

And I can't imagine the other large circulation-auditing organization, the Alliance of Audited Media, attempting something like this. It's not in their DNA to go beyond the auditing role and act like a trade association. 
Adwanted can streamline negotiations.

Q: Didn't Time Inc. introduce programmatic print buying to the U.S. three years ago? 
A: Good old Time Inc., a master of tooting its own horn, even when it didn't have much of a tune to play. Within months of Time's big announcements, no mention of the program was to be found on the company's web sites. And new owner Meredith doesn't seem to have resuscitated the project.

Time’s program was only for Time’s titles, so it was a closed system rather than a robust marketplace. It offered advertisers such choices of readers as "women" and "affluent" -- not exactly the kind of hypertargeting they can get from niche B2B and enthusiast titles. 

For advertisers, Time's program probably looked more like a gimmick searching for a problem rather than the solution to a problem. I suspect they gave it the once over and decided there wasn’t much “there” there.

Q: You're making it sound as if this BPA-Adwanted deal is the best thing to happen to magazine advertising since invention of the three-martini lunch. How much are they paying you?  

A: Nothing. I do admit to a bias: I work in the magazine industry, love magazines, and want to see them thrive. I've been worrying and complaining for years about how we've fallen way behind competing advertising media when it comes to ease of doing business. I was hoping the BPA would rise to the challenge, and it has -- with what looks like a well-conceived solution.
 
Here's the press release:


BPA Worldwide announces alignment with Adwanted.com to expand automated ad buying to members’ offline media 

Shelton, CT May 9, 2018 – BPA Worldwide, a global leader in media auditing, today announced it will enable its members to add automation to the media buying process beyond online display ads.

When it launched the B2B Media Exchange, the private digital ad marketplace (PMP), BPA’s members asked if the PMP could also provide access to offline media buying, including print, e-newsletters, events, directory placements, in addition to digital ads. BPA has now aligned with Adwanted.com to bring those capabilities to its members. 

Leading up to the launch of the B2B Media Exchange, we conducted a ‘Listen & Learn’ tour regarding our members’ top industry priorities, and the efficiency of automating offline buying was listed as the next step once the B2B Media Exchange was up and running. It is designed to provide greater buyer access, quality data and efficiency in buying online and offline media,” explained BPA President and CEO Glenn Hansen. “We want advertisers to be able to come to the BPA site, evaluate media and ‘Buy Now’ with a click to enter into a transaction – be it online, print or face-to-face.” Publisher members will be empowered to offer the same “Buy Now” option on their own sites and in digital media kits.

"When we established the vertically focused PMP comprised of BPA’s members’ audited sites, individual members were not able to reach scale on their own to justify the ad tech expense; however, when put together, BPA’s B2B membership creates a significant impact in the marketplace,” Hansen continued. “Adding the ability to buy all media with the aid of automation is a logical extension of what we created for the online world.” 

For years, B2B publishers have assured their advertisers their media offerings were compelling, based (partially) on the fact that their audience had vitality and was supported by an audit statement. Advertisers would depend on the audit statement and advertising would be placed.

Adwanted.com’s core product automates the buying and selling process of advertising for legacy publishers and their media buyers. Adwanted.com, operating in Paris*, is now bringing its software platform to the US and Canadian markets.

Adwanted.com’s platform allows publishers and media buyers to efficiently transact. Data sources on the platform include pricing/rate cards, marketing insights and circulation information in the form of audit statements. The platform handles the entire process from media selection, agreeing to terms and conditions, to issuing insertion orders. Once a publisher is on the Adwanted.com platform, it is simple to provide a “Buy Now” link.

BPA has worked with Adwanted.com to create a specific offering for BPA members. BPA will offer a “Buy Now” link to their publisher members and will be featured on the BPA website in the User Tools section in three different places (Reports Library, Brand Compare Tool, and the Audited Site Tool) thereby providing attribution. “We have always known that advertisers rely on BPA to provide assurance. Now we will be able to show actual engagement, too,” Hansen said.

“When we first met with BPA, we were impressed with the thinking which drove the creation of the first B2B programmatic marketplace, the B2B Media Exchange” said Adwanted.com CEO, Emmanuel Debuyck. “Our platform’s ability to drive automation and digital empowerment and measurement for legacy publishers was a perfect match to help with BPA’s member efforts.”

If interested in learning more, please contact Glenn Hansen at ghansen@bpaww.com or by voice at 203-447-2801.

*In France, Adwanted.com is working with publishers such as Lagardere (Elle, Paris Match, etc.), Group Marie Claire (Marie Claire, Cosmopolitan), Mondadori (Grazia, Auto Plus), as well as Le Monde and Les Echos.



 # # # 

About BPA Worldwide. BPA Worldwide is in the business of providing assurance. For 80+ years as a not-for-profit assurance service provider, BPA was originally created by advertisers, advertising agencies and the media industry to audit audience claims used in the buying and selling of advertising. Today, in addition to auditing audience claims, through its iCompli service, BPA verifies compliance to defined government, industry, and organizational standards as well as adherence to privacy, data protection and sustainability guidelines and best practices. Performing nearly 2,600 annual audits of media channels in over 25 countries, BPA is a trusted resource for compliance and assurance services. For more information on BPA and its services, please visit the website.

About Adwanted Group. Adwanted.com offers Legacy media companies (offline- Print- Outdoor- Cinema- Radio) a quick and easy way to market their advertising space; and advertisers and their agencies to get access, book and purchase these advertising space online. Adwanted Group through its subsidiaries, Adwanted.com, Affinity Media, Audience Media, Media Opportunities and Access Outdoor, Adwanted Group is present in Europe, Asia and the United States.

For more information on Adwanted.com contact Joe Lagani (President US Sales) at jlagani@Adwanted.com.

Sunday, May 6, 2018

Big News Coming This Week for U.S. Magazines

UPDATE: Here's the announcement, released on May 9, along with some analysis: "Magazine Advertising Entered the 21st Century Today"

An announcement is scheduled for this coming week that I think could end up having huge -- and very favorable -- implications for the U.S. magazine industry.

I've been given an advance briefing about the subject of the announcement, and I'm quite impressed by what I see and the thinking behind it.

It addresses one of the biggest weaknesses and challenges faced by magazines -- an area where we've fallen way behind competing media, much to our detriment.

And one of the organizations involved in the announcement is exactly who I had in mind as the best positioned to address the problem.

At first blush, the announcement will look relevant only to certain publishers and to a particular segment of the industry. But if this venture takes off -- and it already seems to have the backing to do so -- it could become a catalyst for significant, positive developments that could spread throughout most of the industry.

Here's a hint, an excerpt from an article I wrote for Publishing Executive in late 2016:

Why does it take so long and so much freakin’ bureaucracy to buy a simple ad page? With a few mouse clicks, an ad buyer can book a digital ad that will run on the websites of 100 magazines. But try placing an ad in the next issue of those same 100 magazines. By the time you’re done, the following month’s issues will already have been published.

Stay tuned.

Tuesday, April 10, 2018

Wait! Don't Kill That Magazine: 4 Ways To Rescue A Struggling Publication

As if plummeting ad revenue and rising paper prices weren’t bad enough, now the threat of skyrocketing postal rates has successful publishers like ESPN and Meredith talking about shutting down magazines.

But euthanizing money-losing titles isn’t always the best answer.

Just because your accounting system says the magazine is unprofitable doesn’t mean you’ll be better off ceasing publication. (I explain that more in a new article for  Publishing Executive, "Is It Time to Put Your Magazine Out of Its Misery?".)

A better option may be radical surgery – dramatically scaling back your magazine’s footprint to make it more sustainable for the long haul. Here are four examples:

Reduce Frequency
Turning two 80-page issues into one 160-page double issue can cut your production and distribution costs by one-third. For example, well over half the postage for most titles is related to the number of copies mailed, not the weight of those copies.

You can’t get that kind of savings from the usual, less radical tweaks. And, unlike trimming page counts or shifting to cheaper paper, doubling up actually yields a better product.

A double issue doesn’t have to be double-sized. Typical practice is to increase the page count by about 50% -- enough to give the readers noticeably more than they would get in a normal issue.

Reducing frequency enables you to continue publishing the issues that attract the most advertising while euthanizing the dogs of summer – those issues with poor ad sales.

A bonus: Double issues really do count as two issues. A recent promotion for TV Guide Magazine offered a special deal for a “1 year (52 weeks)” subscription, with fine print stating “will be delivered in the form of 26 double issues”.

Pare Your Subscription List
Letting people subscribe for less than the cost of printing and mailing their copies might have made sense when ad dollars were rolling in. But with that subsidy gone, sustainable publishing now means getting readers to pick up more of the tab.

Consumer magazines typically have a wide array of subscription price points – from airline-rewards miles to long-time customers who pay list price. (Are we the only industry that charges our best customers the highest prices?)

You can save money by eliminating negative-remit subscriptions and unprofitable promotions. Replace them with free copies distributed to such “public places” as hair salons, hotel lobbies, and doctors’ waiting rooms. Choose locations likely to be of interest to your advertisers or to have prospective subscribers. (Money-saving hint: Select regions in which your postage is most efficient.)

You can generate even larger savings if you’re willing to let your circulation shrink. That frees you, for example, to drop those 50-cents-per-copy subscription promotions, as well as subscription sources with poor renewal rates. And to stop offering renewals that don’t at least cover the cost of printing and mailing.

Factor in the impact on ad revenue; fewer subscribers means lower rates per page. But circulation reductions aren’t as big a deal as they used to be with advertisers, who now look to print media for highly engaged audiences, not masses of eyeballs.

Take a critical look at newsstand 
Magazine retailers and wholesalers focus on maximizing sales, not publishers’ profits. That means distributing lots of copies that don’t sell, which is OK for the channel partners but not so great for publishers that bear the printing and paper costs.

You’d think wholesalers would stop distributing your title to convenience stores that sell only 10% of the copies, but it never seems to work that way. Be willing to ban your magazine from retail chains with the worst sales.

Look especially at whether in-store promotions are paying off. And don't buy what you can't monitor: Non-compliance has become epidemic. (Hint: If you have copies in airport stores, there’s a good chance you're losing money on them because of "pay to play" promotional fees.)

Get more love for your digital edition 
Rising paper and postal prices don’t, of course, affect the costs of digital editions. Unfortunately, people haven’t exactly been beating down the doors to read our e-magazines.

But what if we gave them more reasons to take a look, whether via price discounts or bonus content? If you sell bookazines, give all of your subscribers access to a free digital edition. Or create a digital compilation of your best stories from the past year or on a specific topic.

Leveraging our digital editions more in promotions, such as providing free access to an issue, can gradually increase the share of digital-only subscribers. And it’s an inexpensive way of getting the email addresses of prospective subscribers.

The goal is not to get rid of print altogether but rather to replace our least profitable print copies with digital distribution.

Other Dead Tree Edition articles about magazine publishing include: 

 

Wednesday, March 28, 2018

A Spanking-New Savior for Printed Magazines: Stormy Daniels

Stormy's booty basher?
The U.S. magazine industry got a real shot in the, um, arm Sunday night when Stormy Daniels confirmed that she had spanked future-President Donald Trump with a magazine that bore his picture on the cover.

Her revelation on “60 Minutes” broke the Internet, as millions of Americans who had abandoned printed magazines suddenly clamored for a UV-coated tush whacking.

Egotistical millionaires (is there any other kind?) this week have been offering to pay out the – uh, big bucks – for publishers to put their faces on a cover. Inspired by The Donald, they’re having their own #MeToo moment, desperate to drop trou for an “adult sophisticate” star who will give their porculent posteriors a periodicals paddling.

Confused Trump fans are joining the craze, buying up any magazine that looks as if it might have details on how Stormy toasted the underwear-clad Fuehrer’s buns.Wait ‘til they find out that North American Whitetail is about deer, not derrieres.

Not whacking material
Publishers seeking to capitalize on the excitement are already engaged in a race to the bottom with rebranding campaigns. Car buffs will soon be able to get their rear bumpers bashed with Road & Whack.

Anagram-loving golfers will be rolling up Flog Digest, while red-cheeked adventurers peruse Conde Nasty Traveler. Christianity Today will publish Christianity OK, for all those evangelicals who’ve forgotten the Ten Commandments and see no evil in Trump's actions.

Forbes is rushing back to press, my sources tell me, with the 2006 issue that Stormy supposedly used to deliver the news. Melania has pre-ordered a special edition that comes with an embedded Taser.

But with new evidence that Stormy’s ham slammer was actually a copy of Trump magazine, plans are already being made to relaunch the defunct title as tRUMP.
The real tRUMP buster?

Mr. Tree is especially ecstatic to report that the ill-fated Rosie magazine will be back, this time as Rosie Cheeks. That’ll get my spank on.

There’s even talk of a certain yellow-bordered magazine-media icon becoming National Pornographic.

(Editor’s note: With its stiff paper and tight binding, National Geographic is hard to roll into a proper crack plasterer. Those with tiny hands – I’m not naming any names – will prefer something thinner like Shorts Illustrated for delivering the blessed moonshot.)

Magazines – real, printed magazines – are of course the perfect tool for smackin’ the donkey. You can’t roll up a book the way you can a magazine.
Spank me, Rosie!

Newspapers are too flimsy. Besides, the ink tends to rub off, leading to messy fingerprints, which could be a real problem if you decide to, say, declare Chapter 11 four times and then run for president 10 years from now.

(Some newspapers claim to use low-rub ink. I’m all for low rubbing – but with ink?)

The web has been kicking magazines in the can for more than a decade. But now that Americans are rediscovering the joys of a four-color thwack on the gluteus maximus, we’ll be able to show that digital whippersnapper who’s the boss.

A real knockout
There is one downside: There may be calls to include warning labels on magazines. Consider that Stormy said she “just gave him a couple swats,” but “from that moment on he was a completely different person.” That sounds good at first.

But considering Trump’s increasingly erratic behavior, I’m thinking Stormy must have slapped his booty so hard it gave him a concussion.


Further proof that Mr. Tree has perverse fascinations with magazines as sexual objects, magazines about Trump – and with Rosie:
 

Sunday, March 11, 2018

Game Over: Postage Rate Hikes Would Shut Down ESPN Magazine


http://insider.espn.com/insider/espn-the-magazine/

A plan to increase publishers' postage rates drastically over the next five years would cause ESPN The Magazine to cease publication, an ESPN official indicated Friday.

If the Postal Regulatory Commission follows through with its plan "to increase our postage rates 40% over the next 5 years then ESPN will not produce a paper Periodical mailed through the USPS," Dennis Farley, the magazine's distribution director, said in a statement filed with the PRC.

"The content will be delivered via the many other means we now use to deliver our content," Farley added, in emphasizing that ESPN would continue as a popular cable network and web site.

In theory, Farley's statement left open the possibility of using other means to deliver the magazine to its 2 million paying subscribers. But that "other means" doesn't exist for a printed magazine, and digital magazines have mostly failed to catch on with consumers.

The PRC, claiming it has the power to override the inflation-based cap on most postage rates, put forth a plan in December to bail out the U.S. Postal Service with a series of rate increases. The Periodicals class, on which the USPS supposedly loses money, would be hit especially hard.

More than 100 organizations have filed comments with the PRC opposing the plan. Among those was the nation's largest magazine publisher, Meredith Corporation, which recently projected that the rate hikes would force it to stop publishing some titles and reduce the number of magazines it mails by 32%.

Ironically, even under the Postal Service's questionable accounting, ESPN The Magazine is probably a profitable customer for the USPS. The fortnightly is dropshipped entirely on pallets to 175 postal facilities, Farley said, with 83% of the copies in carrier-route bundles.

The Postal Service does well with such efficient mailers while tending to undercharge inefficient Periodicals mailers.


Friday, March 2, 2018

Meredith Warns PRC of Massive Magazine Cutbacks

A plan to jack up postal rates over the next five years would force the nation’s largest magazine publisher to slash its print offerings, according to the company’s CEO.

Meredith Corporation would “pursue magazine closures, circulation cuts, issue frequency reductions, conversions to digital only formats and alternative delivery for some magazine subscription copies,” Tom Harty, the company’s president and Chief Executive Officer, wrote in comments filed Wednesday with the Postal Regulatory Commission.

32% fewer magazines
“We conservatively estimate that the PRC’s proposed rate structure will result in a 32% reduction in the number of periodical pieces mailed by Meredith (a loss of approximately 310 million pieces annually),” Harty wrote. “At this level of volume decline, the Postal Service will receive less revenue, not more, from Meredith than it does under the current CPI [Consumer Price Index] cap system.”

He said the company spent nearly $322 million on postage last year. (He didn’t clarify whether that number included last year’s postage bill for Time Inc., which Meredith purchased a month ago.)

The PRC acknowledges that its package of proposals could raise Periodicals postage rates by more than 40% over the next five years. And that's assuming the inflation rate remains at 2%.

Meredith's corporate headquarters
Meredith is among more than 150 organizations that have submitted comments, mostly unfavorable, about the proposal. A variety of mail-dependent businesses and non-profits are challenging the PRC’s claim that it can enact the rate hikes without Congressional approval.

And the move to bail out the Postal Service with rate hikes is also unnecessary, some have noted. The billions of dollars the agency is supposedly losing every year are a figment of inept government accounting procedures. A recent analysis noted that the USPS closed out Fiscal Year 2017 with “$10.5 billion in cash and cash equivalents, more than it has possessed in the last 15 years.”

Of each dollar Meredith spends on producing and distributing magazines, 40 cents goes to the USPS – up from 24 cents in 2006, Harty said. And that’s “despite ongoing presort and drop ship optimization by Meredith” that should have reduced the costs of delivering those magazines.

Shooting itself in the foot
Harty also pointed out that Postal Service mismanagement has hampered efforts to make Periodicals mail more efficient. The USPS, for example, keeps decreasing the incentive to place copies into carrier-route bundles even though doing so significantly reduces the agency’s mail-handling costs. With better incentives, he said, publishers would do more to reduce the Postal Service’s costs via co-mailing and other measures.

He also noted that the Flats Sequencing System, which was supposed to reduce the Postal Service’s costs of delivering flat mail, has been an abject failure – and is getting worse.

“The total cost processing and delivery cost for an FSS flat exceeded that of a Carrier Route flat by 14.7 cents/piece in FY2015, 16.8 cents/piece in FY2016, and 19.9 cents/piece in FY2017,” Harty said. “The PRC’s proposal . . . will do nothing to incent the Postal Service to fix (or abandon) the FSS debacle.”

Related articles:

Sunday, February 18, 2018

Boondoggle: The FSS Goes from Bad to Worse

The USPS's recently released annual FSS Scorecard

The U.S. Postal Service’s money-losing Flats Sequencing System is becoming even less productive and more problematic, according to the USPS’s own statistics.

In the past two years, the average number of mail pieces processed per machine hour has decreased by 8%, and the proportion of “mail pieces at risk” (such as copies that are jammed in the machinery) has risen by 8%, according to information the USPS file recently. (See pages 2-4 of this PDF containing responses to Postal Regulatory Commission questions.)

Meanwhile, the proportion of FSS-zone flats that get fully sorted by the football-field-sized machines has declined nearly 10%. That means that nearly half of FSS flats end up being processed on an automated flat sorting machine (AFSM) and/or sorted manually.

The USPS spends 40% more to deliver flat mail that is addressed to FSS zones than to non-FSS zones (which use less automated methods), an expert’s study concluded last year. That indicates that the system wastes several hundred million dollars annually – not counting the initial $1.3 billion purchase price of the 100 machines.

But postal officials have resisted calls to scrap or rethink the FSS. A year ago, the USPS said it is still learning how to optimize the machines, stating that the technology “is in its relative infancy.” But, clearly, this baby is failing to thrive.

Instead of developing a Plan B for flat mail, postal officials and the PRC are pushing for Postal Service bailouts that in essence would force mailers of catalogs, magazines, and other flat mail to cover the FSS’s added costs. Dead Tree Edition has dubbed that the Stupidity Tax -- making mailers pay, in the form of higher postal rates, for the USPS's stupidity and stubbornness in moving forward with its FSS investment despite numerous red flags.

The PRC’s tentative plan, for example, would punish Periodicals and non-carrier-route Standard flats – because the USPS allegedly loses money on them – with five years of required rate hikes that could easily total more than 40%.

Related articles: