Dead-Tree Editions Are Dying, But Dead Tree Edition Lives

The pandemic has been death for dead-tree-edition periodicals, but other types of print are doing just fine. 

Direct mail, for example, is as relevant as ever, as I explained in an article published last week by Printing Impressions. (Yes, it really is based on a true story.) Marketing mail can do things that other media, whether old or new, simply cannot match. 

The “hoax” that will disappear as soon as warm weather arrives has kept things busy at plants that print books, boxes, and floor graphics as well. Likewise, Dead Tree Edition is undergoing a transformation. Turning over a new leaf, you might say. The seed dies, but from it springs new life. 

My six-year stint writing the monthly View from the Tree column for Publishing Executive has come to an end. Almost simultaneously, PubExec and its rival, Folio:, went silent at the end of June, both victims of their heavy reliance on live events. 

When the two publications went all digital a few years ago, we mourned that there was no longer a magazine that covered the U.S. magazine industry. Now there’s no longer even a web publisher that focuses solely on the U.S. magazine-media industry. 

But Mr. Tree is just fine. I’ll now be writing regularly for Printing Impressions, the leading trade publication for the U.S. printing industry. I’m no stranger to its audience because it has often republished my articles that first appeared in it sibling, PubExec. 

In fact, four years of my PubExec columns have now been re-posted at Printing Impressions. The last one was about the U.S. Postal Service; I have a feeling I'll be writing a few more of those.

Those who are gluttons for punishment can still find the full collection, stretching back to 2011 before the column became a regular gig, at PubExec.

Need a Loan? Subscribe to a Magazine

Thanks to the big-data revolution, subscribing to a magazine may help you overcome a weak credit score.

Many lenders are looking beyond credit scores to determine the credit-worthiness of consumers who have limited or somewhat checkered credit histories, according to a recent article in The Wall Street Journal.

About 53 million U.S. adults have no credit scores and another 56 million have sub-prime scores, writes the Journal’s AnnaMaria Andriotis.

“Now, revenue-hungry companies are considering metrics both mundane and peculiar, like whether applicants shop at discount stores, subscribe to magazines or pay their phone bills on time.”

That’s the power of data analytics at work – identifying more people who can be loaned money to buy stuff they can’t afford.

Think big! Live large! File Chapter 11!

“TransUnion says it sells alternative data to U.S. lenders that can include whether consumers subscribe to and pay for magazines. ‘It’s an indicator of stability,’ said Mike Mondelli, senior vice president of global data strategy.”

Now you may be wondering, “Do my favorite magazines really sell information about me that helps the banks poke into my spending habits?” Mr. Tree pleads the Fifth.

There’s no indication whether only print subscriptions count as an indicator of stability. But it doesn’t really matter because no one buys digital magazines.

(Editor’s note: Mr. Tree, as usual, is exaggerating. After all, Meredith Corporation, the largest magazine publisher in the U.S. and a leader in the shift to digital magazines, recently reported that subscriptions and single-copy sales for its digital editions represent a whopping “4.5% of our total rate base.” So there actually are a few people who buy digital magazines.)

Quiz: Which of these titles are still in print?

If you're hoping that signing up for a magazine will help you get your hands on that Jaguar you’ve been eyeing, act fast. This gravy train will screech to a halt once the big-data analysts realize that magazine subscription lists have been invaded by the unstable, phone-reading, print-is-dead, ad-blocking, paywall-hopping hordes.

So quick, subscribe to five print magazines (before they shut down), pay your phone bill, and run to the dollar store.

Pop quiz: Of the 11 magazines depicted in this article, which five are no longer in print? Leave a comment with your answer.

Dead Tree Edition's off-the-wall, slightly more offensive commentary on the magazine-media business includes:

• All the news that's fit for spanking
• A kick in the listicles
• The "Bite me" strategy

 

Meredith's Time-Management Problem: The Largest Magazine Publisher Has Some Explaining To Do

Tom Harty sounds like a guy who thought he’d bought a shiny new car, only to find out the engine had been removed right before he wrote the check. And who then failed to report the theft to his insurance company in a timely manner.

Earlier this month, the Meredith CEO made some revealing statements about the mess Meredith inherited when it acquired fellow publisher Time Inc. (My article for Publishing Executive, Meredith Stumbles with Time Inc. Purchase, provides additional explanation and insights about Meredith’s announcements.):

• “They were holding cash and not investing in the business.” 
• “We had two years before we acquired it with their mismanagement, the business was down 25% year-over-year in print advertising,” Harty said. “And so the base of that advertising business is much lower than what we had expected at the acquisition.” 
• “It has taken longer than we initially expected to elevate the print and digital performance of the Time Inc. assets.” 
• “We acknowledge the challenges we face that resulted in a reset of EBITDA expectations for fiscal 2019 and going forward. Foremost, it took longer than expected to turn around advertising performance with the legacy Time Inc. brands.”

The trouble is that these revelations and acknowledgements came more than 18 months after Meredith plunked down $2.8 billion to buy Time Inc. and become the U.S.’s largest magazine publisher.

When Meredith released a revised forecast on Sept. 5 that announced the Time-acquisition troubles, its stock price dropped more than 26% in a matter of minutes, Wall Street cried foul, and trial lawyers started circling like sharks.

Meredith headquarters

“The Company made false and misleading statements to the market,” charges one of the many law firms that have announced or are considering class-action stock-fraud lawsuits. “Meredith overinflated the profitability of the Time Inc. merger. In fact, the Company was forced to make significant investments in the Time business to improve it. These investments negatively impacted the Company’s earnings.”

Most of Meredith's previous comments about the Time deal were far rosier. Ten months ago, Harty said, “We continue to expect to achieve our goals of reducing debt by $1 billion by the end of fiscal 2019 and generating $1 billion of adjusted EBITDA in fiscal 2020, meaningfully contributing to total shareholder return.” In the Sept. 5 announcements, Meredith dialed down its FY2020 EBITDA (earnings) forecast to the $640 million to $675 million range.

Just seven months ago, Meredith’s CEO said, “We are off to a strong start in fiscal 2019, delivering results that exceeded expectations. He added that, “We delivered significantly improved year-over-year adjusted EBITDA and margins, which we expect will continue through fiscal 2019.” There was no breakout of the former Time Inc. properties’ money-losing performance or references to the sad state of their ad-sales efforts and magazine-subscription lists.

Meredith now faces a few key questions about the Time Inc. acquisition:

Savings delayed or savings lost?
Meredith had projected $550 million in “synergy” cost savings from combining the two companies. Have those gains gone “poof,” as one stock analyst charged last week, or is it just that they will come later than originally projected?

Did Meredith understand what it was buying?
Some stock analysts now question whether Meredith conducted proper due diligence. I suspect much of the trouble happened after Time realized its sale was imminent, causing it to focus on short-term gains (by shrinking its sales staff and shifting to a cash-upfront subscription strategy, for example) rather than the long-term health of its titles.

Could it have prevented Time Inc.’s deterioration? 
Because it was purchasing Time with cash and not stock, it should have realized that Time no longer had an incentive to manage for long-term sustainability. But could it have built safeguards or incentives into the deal to ensure the Time titles didn’t deteriorate while awaiting new ownership?

What did it know about Time Inc.’s troubles, and when did it know it? 
Meredith dropped the first hints of trouble with the Time deal just three months ago, when Harty said, “We believe it will take longer than originally anticipated to achieve the remainder of the synergies.” But even then he added, “we remain confident we will achieve our $550 million cost synergy goal by the end of fiscal 2020.”

In hindsight, it’s easy to say that Meredith should have realized, and revealed, months ago that there was trouble in paradise. But the acquisition was massive and complex – Time Inc. after all was bigger than Meredith – and there was the difficult matter of splitting off the operations of titles like Time and Sports Illustrated for sale to other parties.

Could Meredith have been so consumed simply with keeping the newly acquired titles running that it didn't at first notice that in Time's last days advertising sales had been neglected and many multi-year, low-profit subscriptions had been sold?

Meredith’s Fiscal Year 2019 annual report, released Friday, said that it recently discovered “incorrect coding of certain magazine subscriptions by Time” – more than a year after it acquired Time. That gives you some idea of the challenges it faces in combining the two companies’ operations, systems, and data.

Did Time cheat Meredith?
Meredith has referred to Time as a sick “patient” that was mismanaged, but it hasn’t given any indication that Time violated the terms of the acquisition deal. Still, you have to wonder whether there will be claims that Time failed to disclose information or violated terms of the deal by allowing its business to deteriorate.

Stay tuned in the coming months (and years?) as high-powered lawyers for Meredith and its investors attempt to answer these questions.

Other Dead Tree Edition articles on Meredith and the magazine industry in general include: 

• Wait! Don't Kill That Magazine: 4 Ways To Rescue A Struggling Publication
• Meredith Warns PRC of Massive Magazine Cutbacks
• This Magazine Subscription Has No Co-Pay

 

Justice Department Seems "Open-Minded" on Quad-LSC Deal

A printing-industry expert believes the federal officials who questioned him about the proposed merger of printing giants Quad and LSC Communications are unlikely to “rubberstamp” the deal.

“They were pretty open-minded,” said the expert, who was recently interviewed by a team from the U.S. Justice’s antitrust division. Although they kept their cards close to the vest, he says, they seemed genuinely interested in understanding claims that the two companies would have several monopolies or near-monopolies in what at first blush looks like a highly fragmented industry.

The printing expert, whom I know to be a reliable and knowledgeable source, spoke to Dead Tree Edition on condition of anonymity.

Silent publishers
Justice’s apparent open-mindedness comes despite no public opposition from publishers or other printing customers.

A publishing company executive tells me that a paper company contacted him in March as part of an effort to get publishers to object to the deal. It found that publishers were reluctant to speak up for fear of angering two key suppliers, he was told. (Also, it’s hard to get senior executives at magazine-media companies these days to even think about printing or anything else that’s not new and shiny.)

The printing expert mentioned to the Justice team the case of Verso and NewPage, two paper giants that Justice allowed to merge in 2015 on condition that NewPage first divest two mills.

At least one member of the Justice team was familiar with that case and indicated the same tactic had not been ruled out in the Quad-LSC case, the expert said.

The expert’s observations are in contrast to recent speculation from Peter Schaefer, a veteran of printing-industry mergers and acquisitions.

“My best estimate is I don’t think there’s going to be an antitrust issue” because the regulators tend to see printing as a single market, he told Printing Impressions last month. “Combined, they [Quad and LSC] are still going to be a small percentage” of the entire U.S. printing industry.

The only formal, public objection to the merger has come from a coalition of two authors’ organizations and an anti-monopoly advocacy group that pointed out how Quad (known until recently as Quad/Graphics) and LSC already dominate the long-run publication market.

The two companies reportedly have 100% share of the U.S. market for the printing of best sellers and certain other types of books. They also own all of the country's rotogravure presses that are typically used to produce catalogs, magazines, and free-standing inserts that have print orders of 1 million or more.

In addition, the two companies dominate the transport of magazines, do the vast majority of co-mailing of magazines and catalogs (to gain hefty postal discounts), and probably own a sizable majority of the large publication presses in the U.S. that are best suited for print orders in the hundreds of thousands.

Related articles:

• There’s No Such Thing as a Printing Industry 
• The Not-So-Secret Secret Behind the Quad-LSC Deal 
• Rival Print Giants Donnelley and Quad Not Looking To Get Hitched

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:

• Wait! Don't Kill That Magazine: 4 Ways To Rescue A Struggling Publication 
• Books: Amazon's Big Mac 
• A Funny Thing Happened on the Way to the Magazine Shelf . . . 

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:

• Magazine Advertising Entered the 21st Century Today

• 6 Growth Opportunities for Publishers in 2018

• 6 Ways to Grow Revenue With Digitally-Printed Magazines

• A Spanking-New Savior for Printed Magazines: Stormy Daniels 

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.

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.

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: 

• A Magazine Resurgence? The Numbers Say No

• This Magazine Subscription Has No Co-Pay

• Which of These Headlines Is Defamatory?

 

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:

• Sexy Slogans With a Bite 
• Censor Me: The Magazine Slogans That Were Too Hot for Publishing Executive 
• For Magazines, This Will Be the Summer of Trump 
• Rosie's Great Speckled Bird 

 

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:

• USPS Bail Out Could Hike Postal Rates 41% in Next Five Years 
• Boondoggle: The FSS Goes From Bad to Worse 
• Mail-Industry Leaders File Joint Comment in Opposition to Massive Postal Rate Increases

The FSS: A Hopeless Case

With FSS, things don't always go as planned.

Buried in two recent U.S. Postal Service reports are data and statements persuading me that the USPS's Flats Sequencing System will never end up saving money, much less recoup its $1.3-billion investment.

I explain why in an article that Publishing Executive published today, which also points out that the combination of the FSS fiasco and a Trump presidency could be yugely expensive for Periodicals publishers. To provide more depth to that discussion, here are the relevant excerpts from the two reports.

The first is the brief "FSS Scorecard" section of the agency's Annual Compliance Report. It reveals that the already slow and erratic FSS machines ran even slower and worse last year -- despite various "tiger teams," machine tweaks, and changes to mailing rules that were also focused on making FSS work:

FSS Scorecard

Chart from USPS FY2016 Annual Compliance Review

The Postal Service continues to measure critical aspects of FSS performance at each processing location. The resulting scorecard is utilized to develop a list of specific sites with the greatest opportunity for improvement. The table reflects the Postal Service’s performance on the key metrics utilized by the scorecard.

The DPS percentage metric represents the percentage of all flats destinating in FSS zones that was sorted to DPS using FSS for city carrier delivery. Flats volume outside of the FSS DPS percentage is either processed on the automated flat sorting machine (AFSM) or in manual operations.

The Mail Pieces At-Risk percentage identifies the percentage of mail that does not follow the prescribed path of sortation through a machine-based operation (e.g., on the FSS). These pieces, while not representative of service failures, require some additional handling in order to ensure they meet service expectations. At-Risk metrics enable the Postal Service to identify operational processes and machine elements that need to be reviewed for possible improvement. The metrics are broken down into three groups – Maintenance, Operator, and Shared (both Maintenance and Operator) – based on the ability of that group to affect the metric being tracked. Data supporting these metrics are gathered from machine End-of-Run (EOR) statistics. The Postal Service uses raw event indicators from the machine, such as the number of jams, and extrapolates the potential number of pieces that have fallen outside normal processing. Proper maintenance and adherence to operational guidelines minimizes the pieces at risk, hence decreasing the indicator.

Below are two excerpts from the "FSS Pricing and Passthrough" section of a USPS report on Periodicals pricing that include a couple of interesting revelations: 

1) After eight-plus years, postal officials are still trying to figure out how to make the "infant" FSS process work. In other words, not only is the system not working, the USPS doesn’t have a plan yet for getting it to work. 

2) The original idea was that FSS copies would cost the USPS no more than carrier-route copies, but now the vision is for the savings on non-carrier-route copies to make up for the “slightly” higher costs of carrier-route copies. With carrier-route copies now constituting more than 70% of non-FSS flat mail (and likely to rise because of better incentives in the rates that will take effect later this month), it’s difficult to see how a system with such long-term underperformance will ever make that work:


The Postal Service’s experience with the FSS is in its relative infancy, and the Postal Service is still learning about which operational flows will minimize the cost of FSS processing. Currently, the presumed efficient preparation for FSS sites is governed more by mailing rules than by pricing incentives. ... 

The premise of the FSS program is that increased mail processing costs (possibly substantial increases for pieces that previously qualified for Carrier Route rates) would be offset by reductions in delivery costs. The net reduction is intended to be systemic, meaning that while overall costs are reduced, some individual components may decrease substantially (mail previously prepared as 5-Digit, 3-Digit, ADC and MADC), while some individual components may increase slightly (Carrier Route). The dilemma is that there is not a practical way to set rates to reflect the fact that, in FSS zones, there is no cost distinction between mail previously paying Carrier Route rates and mail previously paying 5-Digit rates. This dilemma is further complicated by the fact that mailers previously paying predominantly Carrier Route rates do not want higher prices for their Carrier Route pieces.


I’m told that postal officials won’t even discuss the possibility of scrapping the FSS or radically repurposing the machines. (Could the machines be used to sort inefficient mail pieces into carrier-route bundles? Could machines located near major printing plants be turned into giant co-mail machines?)

One issue is that casing units (which carriers use to sort flats into delivery sequence) have been removed from so many delivery units served by the FSS. In other words, before waiting to see whether the FSS would work as planned, postal officials “burned the ships.” Now they’re saying, “Shit, we have no way to get out of this God-forsaken place. Who knew?”

The floor space once devoted to casing units often gets turned over to the growing parcel business. And the wave of recently hired carriers doesn’t have the experience or route knowledge to case efficiently. (With the FSS failing to sort nearly half of the flat mail assigned to it, by the way, there’s still plenty of casing going on. But it’s increasingly being done by inexperienced people using inadequate space.)

So I can understand the reluctance to ditch the FSS. But why are postal officials wanting to throw good money after bad by subjecting yet more areas of the country to FSS processing?

Related articles:

• USPS Needs a Plan B for Flat Mail, Coalition Says 
• There's Inadvertence, and Then There's Postal Inadvertence 
• USPS Cost Cutting Ain't Cuttin' It, Mailers Group Says