Media

Mag Drag: The midyear report on magazine closings says it all.

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The “gone for good” list has been compiled for the first half of 2009 … and it looks pretty grim for the magazine industry. In fact, Oxbridge Communications’ Media Finder, a database that tracks U.S. and Canadian periodicals, reports that a record 279 magazine titles ceased publication during the first half of the year.

The news that 187 new magazines were actually launched over the same period is little consolation. The net loss of 92 magazines is more than ever, and demonstrates all too clearly how the recession has hit key market sectors particularly hard – finance, automotive, fashion and several others that have traditionally been major contributors of advertising revenue to print publications.

Which categories of magazines fared worst over the past six months? Media Finder’s data show that “regional interest” publications suffered the most casualties, with 27 magazines in that category folding. “Lifestyle” publications were also hurt, with 14 titles biting the dust. And magazines catering to the construction business and related segments were also hit hard, no doubt reflecting the depressed real estate and housing market.

What’s particularly interesting about the YTD 2009 list of shuttered magazines is that many of them were well known in their category and boasted significant circulation. Certainly, periodicals like Country Home, PR Week, Portfolio, Nickelodeon, Hallmark Magazine and Teen weren’t slouch publications by any means.

What can we expect for the rest of 2009? Is the worst over? Seeing as how the economic recovery is (optimistically) still months away, you’d have to bet on additional magazine titles folding during the second half of the year – including a few more of the big ones.

And we’re certain to see editorial format and other changes being made to some of the more famous publications (such as Newsweek’s recent makeover) in a bid to reestablish their relevance and maintain their financial viability.

Twitter’s Law of Unintended Consequences

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As I’ve outlined in a recent blog post, where Twitter has shown it has “legs” isn’t in the area most hyped by its founders.

As it turns out, “What are you doing?” hasn’t been much of a foundation for building a money-making social media platform. And in fact, the inevitable media backlash has now set in — even as the number of new Twitter users have begun to plateau and the majority of current members use the service hardly at all.

But hard on the heels of the Iranian and Moldovan unrest, in which Twitter played an important role facilitating the organizing of anti-government public demonstrations, comes another use of Twitter that few could have foreseen.

A recent article by Steven Sears in Barron’s Magazine outlines how Twitter is being used to affect the share price of stocks. According to Sears, “Before the market opens and throughout the trading day, Twitter lets you tap into market-moving news .. and link through attached URLs to more detailed analysis … You can control your information streams by deciding who to follow, and who can follow you.”

That’s hardly revolutionary behavior. But here’s the interesting part: By law, brokers must save instant messages and e-mail correspondence, but no such mandate exists for tweets on Twitter.

What this means is that some of the more sensitive information or speculation about a company makes it onto Twitter long before it’s broached elsewhere.

One example noted in the Sears article was Matrixx Initiatives, the manufacturer of Zicam nasel spray. Speculation that using Zicam might damage people’s sense of smell started to circulate on Twitter. The result? The stock price fell dramatically from $19 to $13 … and those following the news about Matrixx on Twitter were “in the know” a lot sooner than others.

So here we have yet another example of the unintended consequences of adopting new communications techniques. Twitter is effectively replacing instant messaging capabiliites — without the attendent legal paper-trail requirements.

I wonder what’s next?

Spam-a-lot? You Bet-a-lot.

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It’s no secret that corporate inboxes are stuffed with e-mail messages that are – let’s be kind here – unneeded or unwanted. And the latest report from anti-virus software maker Symantec Corporation confirms this in spades.

The report, covering April activity, claims that unsolicited e-mail makes up nearly 91% of messages on corporate networks. And it turns out this is nothing unusual, as earlier surveys have shown that spam makes up anywhere from 80% to 95% of all e-mail volume on the Internet.

So when you look at your own inbox, you might be pleased if your spam volume isn’t that high. And probably it isn’t, because corporate spam filters are blocking a big volume of e-messages before they ever hit your own inbox.

So where is all of this spam coming from? Symantec reports that nearly 60% of it comes from botnets, which are networks of hacked computers that can do all sorts of mischief – not only e-mailing spam, but also swiping financial information or launching cyber attacks. The “worst of the worst” are donbot spammers, which are computers that are available for rent on the black market. According to Symantec, those represent more than 18% of all spam e-mail volume.

But of course, nothing stays the same for long in the cyber environment. A new, even more alarming trend is being noted with an increase of non bot-driven spam. In those cases, spammers are renting legitimate network services (usually located offshore) and blasting huge amounts of spam at large individual Internet service providers. The objective is to push as many messages as possible onto the network before the ISP’s filtering software is able to detect it.

How much of this is going on? Hundreds of thousands of messages each day, and getting greater all the time.

And if that wasn’t enough, just like flies at a Fourth of July picnic, spammers have now discovered social networks, taking over an alarming number of Facebook and Twitter accounts and phishing for user passwords. These swiped passwords are then used to spam the friends of victims with obnoxious unwanted promotional mail about various products let’s just refer to euphemistically as “personal” or “intimate.” Experts say these types of attacks are particularly effective because they can’t be filtered at a corporate firewall level, and because any such message looks like it’s been sent by a friend of the recipient.

So if you’re on any of these social networking platforms, despite their apparent safety, the watchword should still be: “Caution.”

Yes, even the Reader’s Digest …

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Reader's Digest logoAs print magazines have been hammered by falling advertising revenues and as eyeballs have shifted from paper to PCs, the one publication one might think would be spared much of the fallout is Reader’s Digest. With its readership skewing older along with its strong popularity across the entire income spectrum — not to mention its 8 million domestic circulation — it would seem to be the media property best able to maintain a strong position in the current environment.

Well, you can burst that bubble. This past week, Reader’s Digest announced plans to shed some 2.5 million subscribers. It also announced that it is reducing its frequency from monthly to just 10 issues per year.

Plus, like other consumer magazines, Reader’s Digest is expanding its digital presence. Just listen to how Eva Dillon, Reader’s Digest president and group publisher, puts it (in florid language): “As one of the world’s largest producers of original content, we will continue our transformation into an innovative, multimedia brand by delivering content to users whenever and by whatever means they want, through expanded digital and print investments and the development of new mobile, video and multimedia applications.”

Translation: The print model isn’t working anymore, so we’re trying what everybody else is doing. We’ll see how it goes.

Of course, let’s not forget that Reader’s Digest is the world’s largest transnational magazine brand. When you add up its 50-odd country editions around the globe, its circulation tops 14 million.

So this brand isn’t going away anytime soon. But it is interesting to see that despite its unique (and enviable) position in the publishing world, Reader’s Digest is having to deal with the very same issues as everyone else in the industry.

Hype and Hope: The Twittering Machine in Action

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Twitter logoOver the past few days, we’ve heard reports of how the post-election demonstrators in Iran have been using Twitter as a means for organizing protests, moving crowds from neighborhood to neighborhood to keep one step ahead of the armed authorities … and to upload images and video clips of the demonstrations to broadcast to the rest of the world. Twitter has played an important (and successful) role in engineering a “grand workaround” scheme, thwarting a government-ordered news blackout.

We saw the same phenomenon play out in the Eastern European country of Moldova just a few months back.

Viewed from this perspective, Twitter seems to be living up to its billing — in spades.

But there’s also research that shows another side of the coin. A just-completed Harvard University study of 300,000 Twitter users has found a classic rule of behavior in force: just 10% of users are generating more than 90% of the content on Twitter.

It goes even further than that. The average Twitter user “tweets” about once every 75 days … or even less frequently. And the median number of tweets made per person is … One!

That’s right. More than half of the 300,000 people in the Harvard study have sent just one tweet ever. It was with dry understatement that Bill Heil, the Harvard Business School graduate who carried out the study, reported, “Based on the numbers, Twitter is certainly not a service where everyone who has seen it has instantly loved it.”

I have an additional explanation to offer: Perhaps most people haven’t (yet) figured out what to do with Twitter to make it meaningful in their lives.

It didn’t help that Twitter itself set the bar at a pretty low level right from the start by suggesting that users answer the question: “What are you doing?” How inconsequential is that?

As it turns out, the trivial isn’t where Twitter has found its true voice.

Indeed, ask the Iranians or Moldovans whether Twitter has been meaningful in their lives. You’ll get a life-and-death answer in the affirmative.

Bing Search: Pike’s Peak … or Halley’s Comet?

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Well, it didn’t take long for the marketplace to render its verdict on the Bing search engine phenomenon. Fueled by a multi-million dollar advertising rollout plus an aggressive PR push, web tracking service StatCounter has reported that Bing actually vaulted past Yahoo to become the #2 search engine … for one day.

That’s right. According to StatCounter’s data, on June 4th, Bing captured over 15% of the U.S. search share market, while Yahoo had only around 10%. By the next day, Bing’s share had dropped below 10% while Yanoo notched up a point to 11%. And by Day 3, Bing’s share had fallen still further to just under 7%.

Think it couldn’t get worse? The day after that, Bing was mired below 6% share.

Similar results were recorded worldwide.

What’s behind the primal shrug that Bing seems to have met in the marketplace? Certainly, all the PR hype was successful in getting people curious enough to click through and do a bit of tire-kicking. But it’s obvious that most weren’t particularly impressed by what they experienced, despite the fact that Bing does provide some user-friendly features not available over at Google.

But that’s not nearly enough for success. Google’s users are, by and large, quite satisfied with the search experience. It’s what they know. It’s comfortable. And unless there’s a compelling reason to switch — to change deep-seated habits — most people simply aren’t going to play ball … whether you put millions of dollars in advertising behind your pitch or not.

The folks at Google might have been shaken a least a bit on June 4th when their market share of search dropped to 72%. But they needn’t have worried. Four days later, Google’s share was back up to 80% — where it had been to begin with.

Next case, please?

More Action on the Search Engine Front

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Bing logo designWolfram Alpha logoDespite the fact that Google has proven itself to be all but immune from threats posed by competing search engines, hope springs eternal. Within the past couple weeks alone, two new challengers have emerged, accompanied by much fanfare in the business press.

Microsoft takes yet another swipe at Google with its new Bing search engine. Based on an earlier one called “Kumo,” some industry observers — though not all — believe it is a pretty good competitor. Reviewers are particularly pleased with the presentation of refined versions of search queries. Bing also features a rollover display of each link’s content, allowing you to see how useful it will be before clicking through to the site.

The search engine also appears to index more recent “breaking news” items, whereas with Google, those results are not shown unless you click through to Google News — an extra step.

The big question is whether Bing will be able to wean web users away from their habit of searching on Google as their default choice. Certainly, Microsoft is putting some serious promotional dollars behind the launch — upwards of $100 million according to Advertising Age magazine. But based on the tea leaves, a wholesale change in search behavior seems unlikely. Search habits aren’t going to change dramatically unless there is a dramatic improvement in the effectiveness and speed of search activity. Fom what we see of Bing so far, we’re talking about improvements nibbling around on the margin rather than big sweeping change.

But “big sweeping change” just might be the recipe for Wolfram/Alpha, the other new entrant in the search engine sweepstakes. That’s because W/A isn’t actually a search engine in the classsic sense. Instead, its developers refer to it as a “computational knowledge engine” that uses complex algorithms to search databases to come up with answers to questions, rather than presenting a list of sources where the answer might be found. It can report some really cool factual results just based on the user typing in, for example, a date range, several city names, or an animal species.

The key difference between Wolfram/Alpha and Google is that W/A does not index web pages. Instead, it draws answers from a wide range of information-packed databases. So if you want to know the number and magnitude of hurricanes hitting North America in the past 15 years, you’ll get a specific answer rather than being presented with a series of web links wherein you might find the answer to be hiding.

Some observers see the potential for W/A and Google to team up rather than compete against one another. After all, what they do isn’t directly competitive, but in more respects complementary. And in an interesting twist, it turns out that Stephen Wolfram, the ~50-year-old computer scientist and developer who created the software platform upon which W/A is based (called “Mathematica”), once supervised a summer intern by the name of Sergey Brin — who would go on to develop Google with partner Larry Page.

Sergey and Stephen teaming up once again would be quite the coincidence … or would it really?

Even John Q. Public doesn’t believe newspapers are going to survive …

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It’s not just inside observers who are predicting the demise of the printed newspaper. The “Great American Public” seems to be well clued in to the problems of newspapers also. In fact, a poll released by Rasmussen Reports on May 12, 2009 reports that fully two thirds of adult Americans believe daily papers will disappear within the next ten years.

Even more dramatic, nearly one in five respondents think that it will happen within three years.

When two thirds of all adult Americans predict daily papers will go the way of the dinosaur within the coming decade, that’s big news. No longer is this just a discussion among industry insiders … it’s crept into the popular culture. That’s yet another big danger signal for the papers.

All of this is underscored by Rasmussen’s findings that a majority of Americans (56%) purchase a paper once per week or less — and 37% rarely or never buy a print version of their local paper.

In a possibly related development, Rasmussen’s surveys report that the credibility of newspapers and other media has declined in the public’s eyes. For example, only about one in four respondents has a favorable opinion of the New York Times. That may be a new low for a paper that likes to think of itself as America’s #1 print news source.

The most recent Newspaper Association of America’s financial figures are showing that newspapers have lost a whopping $18 billion over the past three years in their print operations. And while many papers have been counting on their online operations to counterbalance all of this red ink, total Internet revenues over the same period amounted to ~$9 billion — not nearly enough to erase the losses on the print side.

Of course, as this is 2009, the story would not be complete without government officials coming to the rescue, offering their share of interesting proposals. But how does the public feel about these efforts by politicians to save the newspapers? Nearly 40% favor federal government subsidies to keep newspapers in business … but slightly more than half feel it’s better simply to let them go out of business.

It will be interesting to see what the federal and state legislatures actually end up doing — whether it be turning newspaper companies into not-for-profit entities as Senator Ben Cardin of Maryland has suggested … or providing special business tax breaks for the industry as has been proposed by Washington’s governor Christine Gregoire.

Whatever is attempted, my prediction is that it won’t have nearly the positive effect its proponents hope for. The sweep of change in the communications arena is simply too broad and deep for that.

Loyalty? … What Loyalty?

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Godiva's newly announced customer loyalty program is a yawner.
Godiva is a late entry in the customer loyalty program sweepstakes.
Godiva Chocolatier has just announced its first-ever loyalty program for customers. It promises to ply chocoholics with all sorts of goodies — from free in-store confectionery gifts to free shipping on online orders. Anyone over age 18 is eligible to sign up with no obligation to purchase … and for those who activate their loyalty membership before June 13th, there’s even a chance to win a complimentary “chocolate party” for up to 25 friends at their nearest company-owned Godiva boutique store.

How wonderful. Now, pardon me while I stifle a big yawn.

For a program that seems pretty decent actually, how come it all sounds so predictable … so mundane? That’s because everybody’s doing it. (And Godiva is really, really late to the party.)

A recent report issued by consulting firm Colloquy contains some interesting statistics about loyalty programs. With more than 1.8 billion loyalty memberships on the books, the numbers have never been higher. (This translates to a whopping 14 loyalty program memberships per U.S. household.)

These stats underscore the fact that loyalty programs have migrated well beyond the original airline frequent flyer and hotel frequent stayer programs to encompass seemingly every corner of consumer activity today.

But according to Colloquy, fewer than 45% of all loyalty programs are actually active, in that they’ve had at least one instance of activity in the preceding 12 months. “The relative ratio of active to inactive loyalty program members suggests that more than half of all program memberships are merely names in a database,” the report states. “The implication for marketers is clear — the era of growing membership rolls just for the sake of growth is over.”

What this suggests is that companies have done a better job of signing people up for loyalty programs to begin with … but not nearly enough to keep them engaged as regular customers over time.

Could it be that the single most popular tactic — offering a one-time 15% or 20% discount on purchases as a “sign on” incentive — has attracted customers who cheerfully take advantage of the special activation offers, but have no compelling reason (or even any intention) to participate over the long haul?

If that’s the case, the loyalty is only skin deep … and the current economic conditions will likely spark even more instances of lax participation.

But what if companies tailored loyalty programs to individual customers based on their unique profile and actual purchase history? Would better customer conversion result — along wth improved ROI?

It’s more challenging to run a tailored loyalty program … and it requires more focus and attention than many marketing department personnel are willing to devote to it. Moreover, there’s no guarantee that consumers won’t simply “take advantage,” without spending any more on merchandise than they would have done without the loyalty program being offered in the first place.

But with the sorry participation rates currently being experienced with loyalty programs … it’s certainly worth a shot.

Marabel Chanin: A Symbol of a City

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Marabel Chanin, speaking to reporters outside her home in Detroit's North End in summer 2008.
Marabel Chanin, speaking to reporters outside her home in Detroit's North End in summer 2008.
One of the sadder stories to hit the television airwaves in recent days concerns Marabel Chanin, an elderly woman living alone in an urban “ghost” neighborhood. When Marabel, a single woman, moved to Detroit’s North End back in 1964, the area, adjacent the Palmer Park Golf Course, was a beautiful, established Detroit neighborhood graced by roomy, circa 1920s single-family homes and lush landscaping.

Moving forward some 45 years later, Marabel was the last person on her block of Robinwood Avenue, living in daily (and nightly) fear of break-ins, gunfire, or worse. Complaints to police went nowhere, so her phone call to the local Detroit Fox News affiliate TV station (WJBK’s Problem Solvers) was a last-ditch attempt to find a solution to her dilemma.

Marabel’s story, profiled by the station last summer, brought the issues of crime & grime, urban decay and danger down to the most personal level and struck a nerve with viewers across the Detroit viewing area. The story ended up on the Internet, where I viewed the news clip on YouTube while researching my blog entry on the city of Detroit’s decline. It was so moving, I felt compelled to contact WJBK-TV, hoping to hear a good end to the story.

Unfortunately, as was chronicled in a follow-up report by the station broadcast last week, there was no good end. In fact, Marabel passed away in her home right around Christmas and was discovered days later. And now, five months on, her body remains at the county morgue, claimed by no one. Because of severe budget shortfalls, there are no funds to bury her or the nearly 100 other unclaimed bodies that are being kept there.

A story like this is gripping enough on a purely personal level … but it is also powerful in a larger context. To what degree does someone like Ms. Chanin — a single person of middle-class means but without close relatives — bear the blame for allowing herself to become the last person living on her city block in a trashed neighborhood? Or are there also larger forces at work that overwhelm the ability of someone of modest means (and elderly as well) to figure out a solution and act on it?

It was the southern agrarian writer Andrew Lytle who wrote in an essay years ago about the potentially dehumanizing effects of urban living. Lytle believed people were meant to live in smaller communities, where folks know each other and look out for neighbors in need. He also warned against large-scale industrialization, arguing that economic downturns lead to massive unemployment and thus dislocation of workers, whereas people who work the land usually can get by in a bad economy.

Of course, Lytle did not anticipate the advent of “industrialized agriculture” and the effect that would have on small farmers. But when you consider the economic landscape in 2009 and its effects not only on Detroit but also communities like Elkhart, IN, Lytle’s essay suddently takes on a very contemporary significance.

And what of Marabel Chanin? WJBK-TV has established a fund to provide a burial ceremony for her — and to do the same with some of the others unclaimed at the morgue. Tax-deductible donations to the “Marabel Chanin & Friends” fund are being accepted c/o National City Bank/PNC (First National Bank Building, 660 Woodward Avenue, Detroit, MI 48226). Reportedly, community response has been strong.