Media

What?! A Reduction in Postal Rates?

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The first class postage rate is going up again this month. But not so fast! The USPS is actually having a sale on postage as well.
The new first class postage rate is going up again this month. But not so fast! The USPS is actually having a sale on postage as well.
Death … taxes … rising U.S. postal rates. It seems all three of these things are just a given. And the USPS is getting ready to up the price mailing a first-class envelope another 2 cents, effective next week.

But hold on! Because it’s suffering from a significant decline in mail volume approaching 15%, the USPS is concurrently rolling out a special program heretofore never seen from this most politically tin-eared of government agencies. The impressively named Saturation Mail Incentive Program gives large standard mail direct marketers who increase their mailing volumes the opportunity to earn per-piece credits — discounts essentially — on their mailing activity.

The discounts themselves are rather small — ranging from 2.2 cents per nonprofit letter mailer to 4.0 cents per flat piece (catalog).

… And the “fine print” conditions as to who actually qualifies for the discounts are almost byzantine in their description.

… And the savings are for a limited time only (~1 year) beginning this month.

… And program participants must formally apply to the USPS for approval.

… And they must do so by June 11 or lose their opportunity to participate at all.

… And, and, and … Well, you get the idea.

But the fact that the postal service is actually throwing a “sale” on rates is big news in and of itself. When has this ever happened before?

Quoting the eloquent words of USPS spokesperson Michael Woods, “The Postal Service is always looking for ways to use our pricing flexibility to improve business, and the current economic climate makes that more important than ever.”

Translation: “We’ve lost a pile of business in the economic downturn, and maybe if we lower our prices, we’ll get some of it back.”

Good luck.

We’ll check back after a few months to see how things are going. Judging from the most recent financial results published this week — a quarterly loss of nearly $2 billion — we may not see much improvement. After all, the USPS has managed to make money in only one quarter out of the past eleven!

UPDATE (5/18/09) — The USPS has now finalized the program, which will now launch July 1. Details are here.

Recruiting New Employees in a Web 2.0 World

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Facebook has overtaken MySpace and other sites to become the largest and most popular social networking choice for young and old alike. And while LinkedIn still maintains an edge over Facebook as a professional networking resource, Facebook has done a very effective job in blurring the lines between personal and professional social interaction on the web.

The latest development that proves this is the increasing popularity of company “fan” pages on Facebook. Anyone can start a fan page showcasing a company they know and love … and many employees have taken the opportunity to create pages for their own organizations. My own company, Mullin/Ashley Associates, is no exception. Currently, Facebook offers more tools for uploading interesting content such as photo galleries and video clips, along with providing a great platform for news updates, wall postings and chat.

Going further, some companies have elected to turn Facebook into their vehicle of choice to promote themselves to prospective employees. Posting videos of employees talking about their positive work experiences … including pictures of the office environment … showcasing employee events … all of this brings a company to life far more effectively than just by advertising open positions on web job boards such as Monster.com.

The beauty of using Facebook in this manner is not only that companies can make a bigger and better impression, but they can do it without having to incur any significant cost. And if it’s done particularly well, it might even result in lower costs, as fee-based recruitment ad placements can be reduced or even eliminated.

Increasingly, people are being connected through social networks, and this phenomenon will only grow in the months and years ahead. In such an environment, companies that champion “content, creativity and community” will be the winners. That goes for hiring, as well.

The Latest NYT Financials are Atrocious

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The latest quarterly financials have just been released by the New York Times Company … and the figures are worse than even the more pessimistic observers had forecast. Not only did the company lose nearly $75 million in the first quarter, it is also laboring under a $1.3 billion debt load. Rival newspaper The New York Post was quick to report that the Times’ cash position, net of upcoming debt maturities, is a mere $34 million.

The looming cash crunch is causing some analysts to speculate that the venerable Gray Lady is slouching towards insolvency.

Not surprisingly, the biggest cause of the financial tailspin is plummeting ad revenues. Declines in classified advertising led the pack (down ~45% compared to the same quarter last year). National advertising fell ~22% and retail advertising declined ~25%.

What’s even more startling was the weak performance of Internet advertising. Instead of growing as had been the case up to now, those revenues actually posted a decline of ~6%. This result blows a huge hole in the notion that online advertising will take up the slack in print advertising.

What’s become abundantly clear is that newspapers have yet to adjust to a world in which they no longer have a near-monopoly on the news in a city or a region. The fact is, for years newspapers were able to bankroll large editorial and administrative staffs precisely because there were few if any other ways for local or regional advertisers to reach their audience. So they were able to charge a pretty penny for advertising space and get away with it. A lucky few cities had two competing newspapers, but many have had single-paper monopolies for years. TV and radio advertising represented alternate promo options, of course, but not in the same medium.

[For those who think that the New York Times, by virtue of its reputation as one of the United States’ leading newspapers, is less a local/regional paper than a national one, they are correct — up to a point. National print advertising represents only around 45% of the paper’s advertising revenues.]

The simple fact is that people today have far more choices online for local, regional and national news – practically all of them free. At the same time, the advertisers have more options than ever before in choosing where to advertise.

So what’s next for the New York Times Company? More staff layoffs? Unpaid furloughs? Halting pension plan contributions? Perhaps all of these … plus trying to sell off other assets like the Boston Globe or the Boston Red Sox franchise.

The all-too-likely outcome: None of this will make much difference.

Twitter: The “Next Big Thing” in Marketing Research?

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By now, it’s obvious that Twitter has become the newest darling of the social marketing world. With somewhere around ten million users today and growing exponentially (there were fewer than one million just a year ago), it’s clear that Twitter has successfully made the leap from novel curiosity to mainstream communications vehicle.

Indeed, Twitter may have worthwhile applications beyond simply the ability for people to update their status information in real time from a mobile phone, computer or online portal. In fact, Silicon Alley Insider recently ran a contest inviting readers to submit their ideas for turning Twitter into a financially viable social network.

The winning entry? An idea from Chicago communications agency Denuo recommending that Twitter charge marketers for access to opted-in users willing to field an occasional research question from brands. Twitter would also charge for dashboard access to the research analytics.

I think this idea has a good deal of merit. Instead of incurring the cost to design and deploy custom research projects, simply tap into Twitter’s existing platform and huge user base to “anonymize” the data and open it up for mining.

Of course, some people voice concern that Twitter will soon be overrun by brand-related messages and advertising. That’s actually begun to happen as certain brands “follow” twitterers ad nauseum — so much it almost constitutes a form of cyber-stalking. But by offering operating an online research panel such as this, Twitter has the potential to deliver scads of valuable, actionable data at the speed of “now.”

Like YouTube, Twitter is actually going to have to figure out a way to make some money for its investors, and soon (imagine that?). So this idea bears watching.

Another Win for the Tax Man?

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The threat of collecting sales taxes for Internet-based commerce has been rumbling in the background for years. But the latest news out of Washington may mean it’s finally coming to pass. And it’s generating its share of controversy.

A bill is expected to be introduced soon in Congress that would force Amazon, Overstock and other Internet retailers to collect sales taxes from their customers who shop online or through mail order. Co-sponsored by a Republican senator and a Democratic congressperson – which means almost certain passage – the bill would require states to inform retailers whenever there is a change in their tax code. This will have the effect of simplifying the tax collection and data reconciliation process.

State officials are understandably excited over the prospects of gaining additional sales tax revenue. And why wouldn’t they be? After all, sales tax receipts have dropped off in recent months due to a general decrease in retail activity. To them, this seems like a quick and easy way to replenish their coffers.

Plus, some brick-and-mortar retailers are surely happy about having a more level playing field. No longer will they have to compete at a disadvantage against online retailers that are saving their customers 6% or 7% sales tax on every purchase.

Of course, sales tax regulations have long been a thicket of complexity. In fact, a tidy number of sales tax collection software/service companies have sprung up over the years to help retailers make sense of it all. Not only are a myriad of different sales taxes set by individual states, but cities and other municipal entities within states can also set their own sales taxes as well.

To add even more to the potential confusion, each state has its own individual laws regarding what type of merchandise is taxable, or whether things like shipping expenses are taxable. So collecting the correct figure is often a tricky business, even for large online retailers.

As for sellers having multiple physical locations in addition to their online presence, depending on where those business locations are in relation to the online consumer’s place of residence can make for an even more complicated picture.

Are we having fun yet?

It’s no wonder online retailers intensely dislike playing the role of tax collector for the states. On the other hand, government officials absolutely love the idea that they can collect new funds without actually having to raise taxes.

And that’s what’s so interesting about this latest maneuver. No one is talking about an official change in tax law. Technically, online shoppers have always been required to keep their receipts and pay tax funds to their home state when filing the yearly state tax return. But be honest … do you know anyone who’s actually ever done that?

UPDATE (4/28/09): BusinessWeek is reporting that the particulars of the legislative bill are still being drafted. Of course, this isn’t the first time movement on a bill has been delayed in Congress. The magazine is also reporting that the bill’s passage is not a foregone conclusion … although opposition in this Congress appears to be lower than in previous ones. We shall see.

Is “Pay to Play” the Future of the Web?

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More than a few feathers were ruffled by Kodak’s announcement that the multiple millions of users of the company’s Kodak Gallery online photo-storage service may have their photos subject to deletion if they don’t begin paying an annual service charge ranging from $5 to $20.

Is this the beginning of a trend? Some web observers seem to think so. David Lazarus, in his recent Los Angeles Times business column, draws a parallel to automated teller machines that were introduced by the banking industry back in the late 1970s. At first, there were no service charges assessed when using ATMs. The banks wanted their customers to start using ATMs, thus helping to reduce the demand for more labor-intensive (read: expensive) teller stations.

Then, after a number of years of free service the banks began charging ATM service fees for out-of-network transactions and even some in-network ones. The idea was now that consumers had become comfortable with the technology and the “24/7/365” convenience of the machines, they would accept the fees without resistance.

“Why should the Internet be any different,” Mr. Lazarus asks?

I think the comparason isn’t totally apt. It’s true that there is a cost for Kodak or others to maintain the infrastructure (hardware and software) to provide archiving and other web-based services. But the fact is, those costs are not nearly as high as the “brick-and-mortar” expense of building an ATM system.

What’s more, the banks were in a stronger position to move en masse toward charging fees. After all, they operate under a government-issued charters. The barriers to entry – both regulatory and financial – are far more onerous than anything in cyberspace.

Anyone ever heard of Flickr?

And that’s the real challenge today. Who is going to be the first to jump into the fee-based waters? And will anyone else follow? Put it another way: will others follow the leader … only to find themselves drowning in a sea of new, free alternatives that spring up in response?

Just ask the newspaper industry how simple it is to successfully implement fee-based services on the web. There’s your answer as to how easy “pay to play” will be to implement.

Holy Smoke! Social Marketing Gets Religion

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As if we needed further proof that today’s social marketing phenomenon is seeping into every corner of people’s lives … faith-based web sites are now embracing the latest social techniques full-on.

One such example is Tangle, a site that provides family-friendly content and forums with a Christian perspective. Since merging with GodTube earlier this year, Tangle has experienced rapid growth. Particularly popular is the site’s interactive “prayer wall,” a kind of cyber equivalent to Jerusalem’s Wailing Wall where members can post prayers and petitions to the Almighty.

But in a 21st century twist, other members can comment on those prayers, a kind of running commentary from the spiritual side chamber. Talk about spilling the beans! It’s certainly a far cry from the Holy Week tradition of private auricular confession to a priest.

Not all of the action is on the Christian side of the ledger, either. Our Jewish Community, a project of Cincinnati’s Congregation Beth Adam, provides information, insights and discussion points related to Passover and other Jewish holidays – complete with blog entries and Twitter feeds.

These social marketing initiatives, in combination with the proliferation of faith-based informational web sites, prove yet again that old-time faith is flourishing in new-world cyberspace. Indeed, the web has provided the most effective means yet for like-minded, smaller or geographically far-flung religious communities such as Eastern Orthodox Christians, Traditional Anglicans/Episcopalians and Sephardic Jewish communities to find themselves and nurture their shared beliefs and culture. Hey, more power to them.

Now, before we get too breathless about the mobile media revolution …

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For those of us in the communications field or otherwise on the bleeding edge of communications, it may come as something of a surprise to learn that the rest of the world isn’t all that engaged with (or even interested in) many of the communications techniques and gadgets that so absorb us.

To underscore this point, a study published recently by the Pew Internet & American Life Project reports that only about one-third of the adult U.S. population finds mobile Internet communications to be particularly interesting or attractive to them. And, horror of horrors, the remaining two-thirds aren’t being pulled by mobility further into the digital world.

The Pew study categorizes information and communication technology users into different sub-groups that have been given catchy descriptive names. Five of them, labeled “digital collaborators,” “media movers,” “roving nodes,” “ambivalent networkers” and “mobile newbies” collectively make up just over one third of the population. The study combines these groups together as people who are “motivated by mobility.”

On the other hand, a clear majority of people fall into a second segment dubbed the “stationary media majority.” Sub-groups within this segment include “desktop veterans,” “drifting surfers,” the “information encumbered,” the “tech indifferent,” and those who are just simply “off the network.”

While it may be tempting to assume that the ranks of the “motivated by media” segment will continue to grow at the same rapid pace (or even faster) going forward, the Pew study throws cold water on such a notion. Indeed, it finds that the “stationary media majority” segment, far from becoming more comfortable or accepting of cell phones and other mobile devices, is actually displaying increasingly more negative attitudes about them.

Maybe it’s an understandable reaction to the relentless press of new technology for people to push back like this. And we’ve seen it before – back in the 1970s and ’80s with the high-tech/high-touch phenomenon when desktop computers were being introduced in a big way into the office environment.

People do come around eventually, of course. But it takes longer than many would expect. And it’s really too bad when some early adopters respond with impatience and exasperation. Instead, why not just chill and give the rest of the world a chance to catch up?

Even better, let them do it on their own terms and at their own pace.

The Titanic Tribune

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The news about newspapers has been unremittingly bleak in recent days. The Rocky Mountain News.  Chicago Tribune.  Minneapolis Star/Tribune.  Going bankrupt or shutting down altogether.

And now we read that the Chicago Sun-Times has announced that it, too, is filing for bankruptcy.

Even more depressing than these reports is reading about the tactics some news organizations are adopting in order to roll out a new business model that’ll supposedly keep their brand “on the beat.” So now we discover that the Seattle Post-Intelligencer is going all-digital. The Hartford Courant is sharing its staff with two local TV stations and combining newsgathering duties. And the Detroit Free Press is cutting home delivery to three days a week.

This is like rearranging the deck chairs on the Titanic.

Strip away the flurry of activity and it all boils down to this: How many consumers really need newspapers anymore? Sure, there may be a smidgen of news in the paper that can’t be found (easily) on the Internet. But the issue is really one of preference and behavior.

Ask yourself: Who do you personally know who subscribes to your daily city paper? How old are they? I’d be surprised if they were born after 1950. And while the over-60 set may still prefer the ritual of reading the paper over a morning cup of coffee (a paper they paid for, no less), that’s a scenario one encounters less and less in the rest of the population.

The fact is, people want quick access to the news when and where they need it. Usually in short information bursts. On the go or at their desk … but far less often in an easy chair at home. The online sites of newspapers can provide this, of course, but so can so many other sources. No longer the big kids on the block with little competition and huge barriers to entry preventing others from encroaching on their turf, today’s newspaper publishers must clamor for attention among a gaggle of other online outlets – most of whom know how to play the game a whole lot better.

Darwin … or dinosaurs? The final verdict may not yet be in. But we already know how this is going to turn out.

Search … and destroy? Nah.

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New statistics published earlier this month by Hitwise show that Google continues merrily on its way to even greater heights of dominance in the search engine field.  Despite the Don Quixote-like efforts of other search engines like MSN, Ask and Yahoo to take a run at Google’s position, the latest stats show that Google’s search engine is as popular as ever.

More popular, in fact.  The numbers reveal that Google’s share of search activity has now risen to 72% versus 67% a year earlier, whereas the others continue to decline.  Yahoo is in second position, but getting 21% of search share is about on par with H. Ross Perot’s vote percentage in the 1992 presidential election – all hat and no cattle.

More startlingly bad is MSN’s performance at around 7% of search activity, because they’ve been trying hard to make a dent in Google’s position. Keep on trying, gents.  Maybe you’ll break 10% share before long, although I doubt it.

Does any of this come as a surprise?  After all, people are creatures of habit. And when a habit gets as big as this, it’s really hard to break.

Also, most people typically take the path of least resistance. And when it comes to search, isn’t Google the easiest path?  Simple visual layout … easy to use … robust results.  What’s the point of going anywhere else?

UPDATE – 4/1/09 – As if on cue, another search engine bites the dust.  Wikia has announced it is closing down its Wikia Search project.  Introduced to great fanfare last year, Wikia was intended to be a user-generated, open search engine.  The problem?  Wikia Search was simply not generating any sort of worthwhile volume.  In fact, traffic was running about 10,000 unique users per month.  That’s just a blip on the screen — and certainly disappointing considering the success of other initiatives like Wikipedia and Wikia Answers.  Further proof that to be first in cyberspace with a good idea and good execution is a huge advantage … and to be fourth or fifth is considerably more difficult, even fruitless.