Print Publications: Hanging In There?

Print magazines are hanging in there.There’s one thing you can say about print magazines: They’re not giving up without a fight!

The latest evidence of this comes in statistics released by Mediafinder®, a magazine tracking service run by Oxbridge Communications. It turns out that in 2011, there were 239 print publications launched in the United States and Canada. That’s a 24% increase over 2010, when 193 magazines were launched.

And at the other end of the scale, the number of magazines that ceased publishing in 2011 decreased over the previous year: 152 versus 176.

Actually, new magazine startups as well as closings are down significantly from just a few years ago. The worst year was in 2009, when a whopping 596 print magazines closed (but also 275 were launched).

Reviewing the stats, it’s not hard to understand the dynamics as to why print magazines have been on the ropes. For starters, magazine newsstand sales have dropped by nearly 50% over the past decade. And ad pages in consumer magazines fell more than 30% just between 2006 and 2010.

And in 2011 year-to-date, ad pages are continuing to track a smidgen lower (-1%), but at least the trend is now nearly flat rather than steeply downward.

To be sure, magazines have tried different tactics to stem the slide. One of the more interesting moves has been by the publishing firm Meredith Corporation, which announced a plan in the summer to begin guaranteeing that advertisers’ magazine buys will yield an increase in sales for their products or services.

Dubbed the “Meredith Engagement Dividend,” the program represents a new level of accountability for “analogue” media, which long relied on fuzzier metrics like audience reach and before/after market research.

The publisher’s new program is available to advertisers who commit to a minimum level of advertising impressions annually across multiple Meredith magazine titles. It works by correlating Meredith’s magazine readers with Nielsen’s Homescan (National Consumer Panel) service. That’s the same marketing research resource many top consumer products firms use to measure their product sales.

The Nielsen/NCP database of ~85 million consumer magazine readers is used to correlate the effect magazine ads have on resulting product purchase behaviors.

Meredith claims the research shows that advertisers in four key categories – household goods, beauty products, OTC drugs and food – have increased their product sales an average of 10% via ads placed in the Meredith publications. That claim is based on measuring the sales impact of “higher frequency” ad campaigns that ran during 2009 and 2010.

It’ll be interesting to see how the performance of print magazines evolves over the next few years. For now, the steep slide appears to have ended, but there’s no real evidence of a turnaround. The question is whether publishers can adjust their operating models to continue to work within the new, lower level of business activity.

Maybe they’ll succeed. You know … hope and change and all that.

Even with endless gift choices available online … gift cards reign supreme.

Gift cards are bigger than ever in holiday season 2011
Gift cards are forecast to be bigger than ever in holiday season 2011.
The growth of online shopping has been well-documented, and this holiday season is no exception.

And why not? Online shopping so convenient and cost-effective.

Shopping online gives people the flexibility to shop from wherever they are, without having to spend money on transportation. They can shop at all hours of the day or night. Merchandise price comparisons between sites are easy to do. And in many cases, consumers won’t have to pay any sales taxes or shipping charges.

Tack on free gift notes and even free gift-wrapping at many sites, and you have to wonder why anyone would bother to shop for gifts any other way.

In an environment where shopping has become so easy, convenient and cost-effective – and with basically endless merchandise choices – you might figure that holiday shoppers would be finding and buying “just the right gift” for family members or friends.

And so what’s “just the right gift”? Gift cards – to the tune of $28 billion, according to the National Retail Federation’s Holiday Consumer Intentions & Actions Survey, which queried more than 8,500 consumers in early November.

It’s not just that gift cards are the easiest possible gift to buy, with basicaly zero thought going into the purchase. It turns out they’re also the most requested holiday gift on people’s wish lists. (Prior NRF surveys going back five years have found that to be the case, too.)

The 2011 holiday intentions survey found that gift cards are on track to eclipse last year’s performance:

More people plan to purchase gift cards this season (~80% versus ~77% in 2010)

 The average gift card amount will be higher (~$43 vs. ~$41)

The average total spend on all gift cards is predicted to be ~$155 per purchaser. The survey also found that men tend to spend more on gift cards than women.

Speaking for myself, I’m not at all surprised by that last finding. I think I fit the profile pretty well: After “one too many” gift returns made by my wife and daughters, I resorted to gift cards a few years ago and have never looked back.

It won’t be easy street in the home real estate market anytime soon.

Sinking home prices leading to lower home ownership rates in the USAIt’s official: Average U.S. home prices have now “achieved” quite a milestone. They’re right back down to where they were in 2003.

In other words, eight years and a ton of turbulence later, we’re back where we started on home prices. Talk about a nothing-doing return on investment!

But for many homebuyers it’s far worse than an investment with zero return … what’s happened is hardly the same thing as keeping money in a savings account in the bank at a puny 0.5% annual interest. Because as we all know, over this period home prices peaked, then plummeted.

Unfortunately, those who chose to jump in during the midst of the homebuying frenzy find themselves underwater in a big way with those mortgages.

This negative equity phenomenon is a huge issue, according to industry experts. In fact, business intelligence and analytics company CoreLogic is reporting that nearly one in four mortgages is now in a negative equity situation.

Mark Fleming, CoreLogic’s chief economist, goes even further. “It’s not just negative equity that we … focus on, but it’s also insufficient equity. All the people who have those primary loans that are somewhere between 80% and 100% LTV [loan-to-value] also basically don’t have access to the credit markets.”

The vast majority of homeowners who are underwater with their mortgages are continuing to pay on them. So far, so good. But the problem is that most of these owners are really underwater – to the tune of 30% or more based on the latest home value appraisals.

Here’s the stark truth: These owners will be stuck with their homes for years and years … and unable to sell them unless they’re willing to take a big loss. Given the precarious state of family finances in many households, that’s an unrealistic option at best.

It’s also a recipe for housing industry stagnation as far as the eye can see.

What’s the end-game in all of this? Most likely, negative equity is going to get worse before it gets better, as home prices will continue to stagnate – or even fall further in value in some markets.

An interesting parallel to this is the effect the residential real estate doldrums have on consumer psychographics. As people hear never-ending negative news stories and continue to view real estate as a problematic investment, these impressions are only magnified.

At some point, we get to a place where it will take years for those consumer attitudes to change. 2011’s third quarter average home prices reportedly dropped ~4% compared to the same period in 2010, thus continuing the ugly cycle of consumer retrenchment and lower home values. So much for the “hyped and hoped-for” housing recovery.

And what about consumers who may be thinking about becoming homeowners for the first time? Clearly, they’re not fools. Most will wait until the market has truly bottomed out before they jump in.

… Which leads us to this revelation: Not only are housing prices right back where they were in 2003, home ownership rates in the United States are now down to their lowest percentage level since before the U.S. Census Bureau began tracking this statistic back in 1963.

That is correct. After having reached a high of ~70% of the adult U.S. population in 2005, industry watchers like John Burns Real Estate Consulting are predicting that home ownership rates will fall to ~62% by 2015.

So much for attaining the “ownership society” preached by politicians throughout the 1990s and 2000s. But hey, at least a lot of people got a bunch of fee-based income from all the flurry of the real estate transactions …

Yep. “Paper entrepreneurship” at its finest. Too bad it’s all so ephemeral.

Hedy Lamarr: A Hollywood Tale where Truth is Stranger than Fiction

Hedy Lamarr in Hollywood DaysWith rare exceptions, the movie stars we encounter do precious little beyond their acting craft that warrants more than just a “gawk factor” response.

Probably the most famous of those exceptions is Ronald Reagan, who also happened to become one of the 20th Century’s most consequential presidents.

But there are others as well. In 2000, I remember reading an obituary of film star Hedy Lamarr, the bombshell beauty active during Hollywood’s “golden age” of the 1940s. There was a passing reference in the obit about Lamarr collaborating on several important inventions, with patents involved also.

I filed this away in my mind as an “interesting factoid” about a woman who otherwise led a pretty typical life of a Hollywood actress – not least her vampy screen name and her six marriages. (Her full name was a real mouthful: Hedwig Eva Maria Kiesler Mandl Markey Loder Stauffer Lee Boies!)

Now we have a new book that’s just been published, and it sheds fascinating light on the “inventive” aspects of Lamarr’s life. As explained in Richard Rhodes’ book, Hedy’s Folly: The Life and Breakthrough Inventions of Hedy Lamarr, the Most Beautiful Woman in the World, it turns out that even as Lamarr was wowing her movie audiences, she was also deeply involved in the invention of the frequency-hopping spread spectrum radio.

“What’s that?” you might ask. It’s technology that harnesses the rapid switching of communications signals among a spread of different frequencies. And it’s the basis for what gives us the functionality of the digital gadgets we use today, from cellphones to GPS units and barcode scanners.

How this came about was due in large part to Lamarr’s background. Instead of being a product of America’s small towns who traveled to California to make it big in the film industry, Hedy was from cosmopolitan Vienna – born into a prosperous family during the waning years of the Austro-Hungarian Empire.

As a girl, Hedy had a natural aptitude for math and science, finding these subjects most interesting of all. But educated in the arts (ballet) and music in accordance with a young girl of her social standing, Hedy then began working with film director Max Reinhardt in Berlin, eventually starring in major roles. A few of these, such as Gustav Machatỷ’s steamy film Ecstacy, tested the limits of censorship, earning her a certain notoriety.

In 1933 – barely 20 years old – she married Friedrich Mandl, a Viennese munitions magnate who became involved with supplying arms to the German government shortly thereafter. Mandl objected to Hedy’s film career – effectively banning her from the industry in favor of being the head of household at Schloss Schwarzenau, the family’s castle-compound.

Mandl also took her to meetings with technicians and business partners, which is where she began to learn about munitions and the technology behind them.

As a well-educated intellectual and individualist – as well as a person with Jewish lineage – Hedy was strongly opposed to what was occurring in Austria politically. The formal Anschluss with Nazi Germany would come about in 1938, but even before then, close collaboration was developing between the two countries.

Hedy would depart Vienna prior to the union of Germany and Austria, but not before doing two things. First, in true pillow-talk form redolent of a Hollywood thriller, she learned as much information from her husband about munitions and weapons as she could. Then she ditched the country for Paris (taking her expensive jewelry with her), and proceeded to divorce him.

It was in Paris that she met Louis B. Mayer, who convinced her to join MGM in Hollywood where he gave her the screen name “Hedy Lamarr.” She would go on to make 20 films during her Hollywood career, the most successful of them being Samson & Delilah.

But it was also in Hollywood that Lamarr became involved with inventions. At a dinner party, she was introduced to George Antheil, the infamous enfant terrible of avant garde classical music in America. One of Antheil’s most notorious and controversial compositions was the Ballet Mécanique, a music score that utilizes a bank of player pianos operating simultaneously.

In conversations, the two discovered their mutual interest in technology … soon realizing that they could pool their knowledge and apply for a patent on a “secret information system.” The patent utilized a piano roll as a device to change between 88 frequencies, thereby making radio-guided torpedoes harder for enemies to detect or jam.

Although the patent was approved in the early 1940s, the idea wouldn’t be implemented until 1962 during the Kennedy Administration’s Cuban blockade.

More importantly for us, the frequency-hopping concept served as the basis for the advent of spread-spectrum communications technology. Lamarr would finally be given public credit for her invention in 1997 in an award bestowed on her by the Electronic Frontier Foundation (co-inventor Antheil had died in 1959).

In later years, Lamarr moved away from Hollywood and essentially shed the limelight, living quietly in Florida where she died in 2000. In accordance with her wishes, her ashes were returned to Austria and scattered in the Vienna Woods, — the storied grounds memorialized in the sweet melodies of Johann Strauss Jr. and Rudolf Sieczyński … but that had also borne silent witness to so much of Europe’s 20th Century turbulence and strife.

It was a fitting ending for a life that was likewise noteworthy – even by Hollywood’s own outré standards!

The Google+ Social Network: Net Plus or Net Minus?

Google Plus, Google+What’s the latest with Google+? The big splash predicted when the new social platform hit the web has been more of a ripple instead.

Underscoring this, recent news reports have suggested that Google basically missed the boat on social media … and that rival Facebook is far too well-established to face anything more than just token competition going forward.

It’s true that many people find the prospects of building and engaging in yet another social media channel a wearying thought, to say the least. There are, after all, only so many hours in the day.

But Google doesn’t want to cede the social media marketplace to Facebook without a fight. That’s understandable, considering the billions of dollars in potential advertising revenues that come from being able to serve ad messages to people who are connected to others who “like” a product or service.

The results charted to date on Facebook confirm that displaying friend “likes” adds an extra measure of credibility to advertising. That’s manifested in a clickthrough rate that’s three times what’s typical for other advertisements on the social platform.

The launch of Google+ this past summer hasn’t resulted in huge user adoption, that much is clear. The Google+ social platform has managed to nab ~40 million users, which isn’t a shabby number in and of itself. But it pales in comparison to the more than 800 million active users on Facebook.

But despite this less-than-stellar performance, we see clues as to where Google is going with its social platform. That’s because Google’s equivalent of the “like” button – the “+1” notation that shows up on Google’s search engine results pages – goes further than simply communicating the news to those in someone’s own Google+ network. Google is also mapping that information through to its Gmail account base.

Google’s Gmail service has hundreds of millions of users, and those who use the site regularly have accumulated dozens or hundreds of contacts. So when a user clicks +1, Google can show that result not just to the user’s social friends on Google+, but also to his or her contacts in Gmail.

[For those who cry “foul” on privacy grounds, Google maintains that clicking the “+1” button is a public action and therefore not subject to privacy considerations.]

The jury’s still out on what the social map will look like in a couple years. There’s little doubt Facebook will still be the biggest guy on the block. The question is, to what extent will Google have taken the 600 pound gorilla down a notch? Stay tuned …

Dealing with a Deluge of Marketing Data

Marketing analytics in the era of social mediaBelieve it or not, there was a time not so long ago when marketing professionals actually complained about a lack of data when it came to determining the success of sales, advertising or promotional initiatives.

Clearly, those days are long past. With the inexorable rise of digital and social media, many marketing managers now believe they can’t analyze and react to the sheer volumes of data that are now available.

That view comes through loud and clear in IBM’s Global Chief Marketing Officer Study, released in October 2011. In this large survey, IBM interviewed nearly 1,750 CMOs across nearly 20 industries in more than 50 countries … and ~70% of them revealed that they felt incapable of analyzing and responding to all of the data available to them.

For example, only about one in four CMOs in the survey reported that they are tracking blog content.

On the other hand, only ~36% reported that they still focus primarily on traditional sources of marketing information. Even so, ~80% continue to use certain forms of traditional management techniques to measure their success, such as competitive benchmarking and market research surveys.

As the newest activity – and perhaps the thorniest to measure – social media is a particular struggle, according to these CMOs. While just over 55% believe that social platforms represent a “key engagement channel,” an equal percentage say they’re not prepared to be held accountable for social media ROI.

Calculating the return on investment for acquiring Facebook fans, YouTube followers or LinkedIn company connections is really challenging, these respondents report. Instead, metrics that are typically tracked are new account signups, exits and cross-selling activity. For now at least, the commitment is to engage customers using social platforms without agonizing over ROI factors.

Thankfully, the hard-dollar advertising costs of using social platforms are modest … even though marketing departments must devote significant personnel resources to support the effort properly.

Monitoring social discussions, product reviews and other anecdotal information — and then compiling the data into actionable reports — requires daily focus and attention. But those actions are key to triggering timely alerts if something is amiss or there’s a change in the competitive picture.

What’s the prognosis for marketing data in the future? (Much) more of the same. For companies, the deluge – if not the fun – is just beginning.

The Rise of Siri: Getting Set to Revolutionize Web Search?

Siri digital personal assistant on the Apple iPhone 4SSiri, the digital personal assistant that’s been integrated into the new iPhone 4S from Apple, is generating substantial buzz. That’s because it’s so much more accurate than earlier iterations of voice command platforms. (Google’s digital personal assistant on the Android operating system has generated far less accolades by comparison.)

The question is, what will Siri do to change the traditional ways people interact with the Web? Because Siri is far more than just voice recognition. It’s what it does with the voice it recognizes that’s so interesting.

Siri can update your calendar, set reminders, play music, write e-mails and text – indeed, it’s a personal assistant in every sense of the word.

Users of the iPhone 4S are using Siri to send texts and e-mails. They’re tending to open fewer apps, since Siri is very effective in deciding which app, service or site will best handle the needed tasks.

In search, this means that Siri may supplant what users might have done previously: namely, open a browser window and search using Google or Bing. If a user is asking Siri to find the closest good-quality dry cleaning establishment, for example, the result may be based on more than the top spot on Google Places … it may also be based on customer ratings on Yelp or “likes” on Facebook.

That’s because Siri navigates a variety of application program interfaces, pulling not only your information, but also information provided by others.

The rise of social media platforms has already alerted us to the fact that simply having a highly relevant, well-optimized website is no longer enough. The “endorsement” of sites, the incidence of positive customer reviews and the degree of “engagement” with visitors are playing a bigger role now, thanks to Facebook, Google+1 and various rating sites.

But now, with Siri and digital personal assistants entering the scene in a major way, we may well see people migrating away from accessing search pages and simply using the friendly voice in their mobile device to send them where they want to go.

… It’s yet another example of the constant state of change that’s a fact of life in the world of digital marketing.

Adult Children Today: Dependency Redefined

Adult kids financially dependent on their parentsThose of us with children who are recent college graduates might wonder if we’re the only ones continuing to support them financially in a big way.

It turns out, we’re far from alone. In fact, a recent consumer survey by Vibrant Nation, an online community focusing on Baby Boomer women, finds that parents are supporting their adult kids (defined as up to age 30) in all sorts of ways:

 Paying for cellphone service: ~60% of parents are supporting
 Paying for insurance: ~53%
 Paying for rent: ~39%
 Paying for non-school related trips and travel: ~38%
 Paying for clothing: ~36%
 Paying for cars and computers: ~33%

Looking down this list, it’s no wonder so many “empty nesters” feel like their child-raising years are far from over!

[But thank goodness for small favors: At least it’s only a minority of parents who are buying their adult kids automobiles and computers.]

Thinking back ~35 years ago when I finished my college studies, there wasn’t one thing on the list above that my parents covered for me (although they were helpful when it came to loaning me money for the down payment on my first home purchase — barely three years out of school).

So at first blush, it’s quite startling to see these numbers. Then again, considering the ugly employment situation for today’s recent college graduates, perhaps it’s not so surprising after all.

And there’s another interesting twist to the “new dependency” as well. In the past, once adult children left home – financially as well as physically – it was much easier for them to break the ties of parental influence and control. I don’t recall asking my folks for their opinion about much of anything in those years following school.

Today, with kids so financially dependent on their parents for pretty much anything of consequence, it’s much easier for parents to exert that influence.

Let’s just say, our opinions carry a lot more weight.

How about you? In what ways are you continuing to support your adult kids? And is there a downside?

Are Mobile Communications Taking Over the World?

Mobile communications taking over the worldHow hot is mobile communications these days? Extremely, according to Internet marketing über-specialist Aaron Goldman, who recently cited a number of information factoids to back up his contention:

 There will be ~5 billion mobile devices in use by 2012. That’s the equivalent of ~70% of the world’s entire population.

 Penetration of smartphones has now reached ~38% in the United States … and higher in Europe and Asia.

 The average smartphone user in the U.S. and U.K. has 23 mobile apps on his or her phone. (In Japan, it’s even higher at 45 apps.)

 Four out of five smartphone users use their phone to shop or research purchases while they’re in the store.

 Even more interestingly, ~43% of mobile Internet usage actually happens at home. Evidently, the desktop being mere steps away isn’t as convenient as whipping out the phone to get the needed information..

 Mobile makes up ~20% of all searches on Yahoo, which translates into ~528 million Yahoo searches on mobile devices every month. (Google isn’t far behind, with ~15% of its searches on mobile.)

 Mobile is clearly making strides in the local market; just under 30% of all mobile search queries are ones with “local intent.” For desktops and laptop PCs, only about half of that proportion are “local.”

And Goldman has another interesting stat to share: Nearly 40% of smartphone users access the Internet while using the lavatory.

Now, when Internet surfing takes over from bathroom reading … that’s proof above all else that mobile has definitely arrived!

Airlines Continue to Struggle with Customer Relations

Virgin America AirlinerI’ve blogged before on commercial airlines and their penchant for treating customers in a careless fashion. Everyone understands that the air travel industry is a challenging business – and a far cry from the halcyon days of yesteryear when traveling by air was an enjoyably memorable experience. Sure, tickets were pricey. But crowds were few, the atmosphere pleasant, and people felt pampered and special.

Now, commercial airline travel is more like a trip on an overcrowded city bus or, worse yet, being in the middle of a cattle call.

On top of this, it seems that airlines are their own worst enemies when it comes to customer service.

Take Virgin America, for example. It’s only the most recent example of airline customer relations that are essentially in the toilet. Recently when the airline changed over to the Sabre reservation system – no doubt to save money as much as for any reasons pertaining to improved operational accuracy – it did so in a way that left consumer satisfaction completely out of the mix.

When the switch was flipped over to the new Sabre system, many customers couldn’t access the website … and many of those who did were provided wrong boarding passes or other inaccurate information.

Even the airline’s own crew members were given incorrect information about when to show up for work.

Billing procedures? They were equally compromised. Some customers found themselves being invoiced multiple times for the same flight; the most egregious example was one woman who ended up with nine separate charges for the same flight.

The phone system was totally overwhelmed, as would be understandable. With the crush of customers attempting to call the airline to work out scheduling snafus, people found themselves being placed on hold for hours at a time – then mysteriously cut off.

Wouldn’t interfacing with customers be a situation tailor-made for harnessing the power of social media? In the abstract, yes. But in the case of Virgin America, they bombed on this score as badly as everything else.

To begin with, the company’s PR posture was that customers were experiencing only minimal problems with a “smooth transition” to the Sabre reservation system. But consumers were telling a completely different story on Twitter and Facebook.

When things like this occur, smart companies monitor social media platforms diligently and jump in to respond to individual and group concerns immediately. They understand that a disgruntled customer can be turned into a brand evangelist if “service recovery” is done effectively.

Doing this well means two fundamental things:

 Validating customers’ concerns by acknowledging that the problem exists, and taking responsibility.

 Providing real relief. Refunds, discounts, rewards, additional air miles – it’s all part of the arsenal of offerings that Virgin America could use to “turn lemons into lemonade.”

It’s wise to take social media seriously. That means assigning people with brains and a sincere interest in customer care to take charge of social media, and also giving them the authority to respond with honesty, integrity and empathy.

From the looks of things, it appears Virgin America did it all wrong. It quickly became apparent that the true details of the Sabre conversion were at major odds with the “happy face” posture and the company’s claims.

But what happened to customers who voiced their real concerns via social media? They found their posts being deleted. Failing to address customer complaints, while dissing them by kicking them off your Facebook page: How is that a recipe for success?

Consumer research tells us again and again that when companies lose customers, it’s because of what happens “on the ground.” Like Virgin American, they may spend millions on advertising, but those ad dollars are often better spent to improve customers’ personal experience.

Satmetrix, a San Mateo, CA customer experience research and software company, found recently that consumers stop doing business with a company for a variety of reasons … but product or service quality concerns represent a distinct minority of the cases:

 Rudeness or dishonesty: ~34% cited for stopping relationship
 Unexpected charges or fees: ~20%
 Product or service quality: ~20%
 Unfavorable return or refund policies: ~3%

But back to Virgin American. When the airline was first announcing its shift to the Sabre reservation system, it came up with a catchy, irreverent tagline: We’re shaping up our back end. How ironic does that all-too-cute messaging sound now?