Old News Is Good News for Businessweek

Bloomberg Businessweek is using five-year-old news to sell subscriptions. The practice isn’t as crazy as it sounds and provides insights into direct-mail marketing and how consumers think about magazines.

“When we recently announced that Bloomberg L.P. had purchased Businessweek the business world was taken by surprise,” begins a flyer headlined “The business magazine, reinvented” that was distributed last month. “NEW: Behind the merger of Bloomberg, L.P. and BusinessWeek” proclaims the flyer’s other side.

“Recent” in this case means October 2009. The piece I saw was inserted into an envelope with a subscription offer, which was polybagged with the May 12-18, 2014 issue of the magazine. Did someone mistakenly use an out-of-date insert? I don’t think so.

Sophisticated, high-volume direct mailers are constantly testing – trying, for example, an additional insert, a different envelope size, new copy, or even revised color schemes. But they always compare the results to those of their “control” – the direct-mail piece that has recently had the best response.

Logic says that “The business magazine, reinvented” piece should be replaced by something more up to date. And in fact some people may have received BBW’s May 12-18 issue polybagged with a different message.

But direct marketers care about data, not logic. As long as the control gets better response than the test packages, you can be sure Bloomberg Businessweek will continue using it, no matter how dated it seems.

Perhaps the piece works because consumers aren’t aware of, or forgot, how long ago Bloomberg bought the magazine. Or perhaps they don’t care. Maybe what really resonates with them is that Bloomberg Businessweek has a deep-pocketed owner with a demonstrated willingness to invest in reviving the once-struggling magazine.

Consumers, after all, have this nasty habit of defying both logic and expectations.

Related articles -- in this case, other Dead Tree Edition attempts to probe the thinking of magazine circulation departments, even though some of my production colleagues claim that any phrase involving “thinking” and “circulation department” is an oxymoron -- include:

• Is Ratebase the Magazine Industry's Crack Cocaine? 
• Why Has Magazine Circulation Declined? Blame Advertising 
• What Magazine Publishers Can Learn From "The Da Vinci Code" Giveaway

Junk Journalism and the Bogus Postal Statistic

When a respected magazine's cover story cited a statistic, I used to assume the number had at least some connection to reality. Not any more -- not after reading Bloomberg Businessweek's recent piece on the U.S. Postal Service.

Here's the stat that really stumped me: "In the last quarter of 2010, junk revenue climbed 7.1 percent," with the added statement, "Unfortunately for the USPS, junk volume has since plateaued."

Nowhere does the article define "junk mail", though it uses the phrase liberally. It's certainly a term you won't find in any USPS reports.

"Junk mail" is a bit like "pornography": It's hard to define, but you know it when you see it. I think most people would agree that it's mail that is both unwanted and irrelevant to you -- something that goes directly into the recycling bin or garbage can.

Businessweek's definition of "junk mail", however, is apparently Standard-class mail -- all Standard-class mail. Standard's revenue in the last quarter of calendar year 2010 increased by the magic 7.1%, which was true of no other class or subclass of mail. It grew only 0.9% in the 1st Quarter of this year.

According to the magazine's unstated definition, your favorite catalog is junk mail. That Red Cross plea to help the folks in Joplin, MO? Junk. The reminder notice about your class reunion, the annual reports for your mutual funds, and that parcel with the item you ordered on the Web? All junk. A subscription solicitation for a certain weekly business-news magazine? Yep, Junk City, baby.

Here's another head-scratcher in the article: "The USPS has historically placed the interests of its unions first." That's news to those who have followed the Postal Service's at-times acrimonious relations with its unions. Yes, postal executives must try to appease the unions, but only because Congress has put the unions in such a strong bargaining position.

The article goes on to suggest that the recent labor contract with the APWU is just another union giveaway. But even APWU members who grumble about the contract's "eating your young" provisions have written to me acknowledging it was a brilliant, money-saving deal for the Postal Service.

One more complaint: I had to flip past a lot of junk pages for companies like Verizon, JPMorgan Chase, and Siemens to get to the article. Oops, I forgot: Businessweek doesn't call those "junk pages"; it calls them "advertising".

Giving BusinessWeek the Business

The Web site that urged BusinessWeek to close its print edition and “go digital” this summer took a less radical tack yesterday, suggesting that the publication go bi-weekly.

Though flawed, the latest post from 24/7 Wall St. is still an insightful look at the choices that dead-tree-edition magazines have when facing the twin monsters of economic recession and loss of print advertising to the Web. Douglas A. McIntyre points out that the three to four days required to get the magazine to subscribers (the actual range is two to five, I think) is nearly an eternity in the financial content industry.

So why not go bi-weekly, he wonders, thereby saving about $20 million annually (in the ballpark, but a bit high if we assume each issue would have more pages and that editorial staff isn’t reduced) and probably losing few advertisers. As a biweekly, BW would have to focus more on features than on breaking news, McIntyre notes.

“BusinessWeek would have to drive a larger and larger portion of its readership to its website,” McIntyre says, revealing a fatal flaw in his plan. BusinessWeek is probably one of the best in the business at luring its readers online, but that probably only means it’s getting a small fraction of its print readers to go to its Web site rather than the minuscule portion that most other publishers get.

Typical readers don’t think in the print-versus-Web terms common among industry pundits these days. They go to print for certain things (longer reads, something to do on the train or toilet) and to the Web for others (breaking news, specific searches). They’re smart enough to realize that BusinessWeek is the place to go for thumb-sucker articles exploring counterfeit computer chips or trends in corporate innovation but that at least 20 Web sites do breaking business news better than businessweek.com.

Like most outsiders, and many insiders, McIntyre overstates the case for the Web and understates it for print (though he no longer advocates that BW "move completely to the internet," as he naively wrote in July). BusinessWeek’s nearly 900,000 subscribers are probably worth a few dollars per month each in advertising, while the 3 million unique monthly visitors to businessweek.com are probably worth far less. The Web site is nowhere close to supporting the 150 people (McIntyre’s count) on BW’s editorial staff.

He also pegs the average cost of producing and distributing a dead-tree copy at 75 cents and maybe close to $1. Even 75 cents seems high for a 96-page magazine on skimpy paper. (Close to $1? I’m giving up blogging and becoming a cost-reduction consultant.)

Nevertheless, McIntyre may be on target when he writes that it is “hard to make a case for the long-term survival of the print edition of BusinessWeek." In an age when even daily newspapers seem slow to market and business magazines are no longer bursting with ads, BW must rethink how it presents news, whether to trim its circulation, and even how often it prints. Maybe it should be called BusinessFortnight.