Trinny and Susannah do America

Congratulations to the hardest working girls in show business Trinny and Susannah who are in the US whipping up a media storm promoting their new network television show on TLC.

Here is todays New York Times Style Section.

Now we have a bit of an interest in this as we are the girl's business partner and we have just redesigned their website which launches tonight and we will soon be re launching them as an online 'recommendations' brand.

Watch this space.

thelondonpaper closure creates ripples in the market

So what would you do if you were Associated Newspapers in response to the news News International are to close thelondonpaper?

Well the very first thing you would do (once the celebration is over and the hangover has subsided) would be to close London Lite, their loss making free newspaper immediately. Yes you would and with a great sign of relief

Or would you say to yourself the demise of the competitor means more ad revenues for London Lite? You might, but you would be foolish to expect spike in ad revenues. It just doesn't happen like that.

Or you would rebrand and run Metro in the afternoon as well as the morning? This is an interesting thought. It leverages a strong consumer brand and gives advertisers the opportunity to get 2 Metro impact hits a day. Readers get improved content coverage from a trusted source (altho inevitably there will be story duplication/repetition)!

I think that London Lite will close - not immediately but soon. And not for the reasons stated here but because I suspect a deal was done between Associated and NI to cease the expensive and non sensible free newspaper hostilities by closing one and then the other.

Fashion Magazines - ad decline snapshot from US

Scary report card from top US fashion magazines. Look at the size of the year on year declines. Its particularily scary as 2008 was a poor year in its own right.

So whats happened to the advertising money? Are these declines simply due to budget constraints or is there something else at play? Well, the answer is, we believe, a bit of both. There is no doubt that ad budgets have shrunk (september's normally bumper issues are looking decidedly thin) but these numbers also reflect advertisers desire to find harder working channels. Lifestyle sites are the main beneficiaries. We hear, for example, that Glam Media who has a network of sites delivering 110 million unique monthly visitors are doing very, very well right now.

Video Ads in Magazines

Pepsi break new advertising ground in the US next month with a full motion video ad in the magazine Entertainment Weekly.

Made possible by a wafer thin video screen built into the page supplied by a company called Amerchip the technology works much like the moving pictures of the Daily Prophet newspaper seen in Harry Potter films.

The cost of all this is prohibitive right now (estimated to be low seven figures for 100,000 copies) but soon(ish) such advertising strategies will be common place when electronic paper is the order of the day. And that time is coming.

More pointless babble?

More intriguing comment on Twitter released today by Pear Analytical, a US based Market Research company who, after constant analyses of tweets, found that 40% of all the messages on the website were deemed to be ‘pointless babble.’

This, it is fair to say, is utterly staggering for two reason. Firstly the way the analysis is presented in the media suggests that the 40% in question is far too much, which begs the question what is a tweet? Surely the whole point of the website is to constantly talk ‘pointless babble.’ Indeed my overall impression of the twitter experience is that the most interesting tweeters tend to be those with verbal diarrhea who simply don’t know when to stop talking; sometimes I do want to know that Bumble is having a pint or that Scoffe is listening to his ipod. This has to be the point of it all. It is certainly not designed for insightful political comment or encouraging democratic debate, it is unquestionably supposed to be humble and simple mumblings and musings.

Which brings us very neatly to the second reason; if only 40% is ‘pointless babble’ then what on earth is the other 60%? Is the research suggesting that the other 60% of tweets on the site are of value? If this is the case then is Twitter actually becoming a media tool? One would suspect not nor should the site have any pretentions to become one. If it is to survive then it should do so by the sheer weight of people’s interest into the everyday and mundane of normal life rather than by the media hype it courts and develops.

Ryan Kelly of Pear Analytics sums his opinions of the twitter phenomena by saying it is ‘a source for people to share their current activities that have little to do with everyone else.’ For some that is unquestionably what makes the site so interesting.

Readers Digest files for bankruptcy

The Readers Digest is the latest media deal struck at the peak of the credit fuelled buy-out market to head into bankruptcy.

Launched in 1921 the Readers Digest is one of the world's largest publishers with 94 titles and a claimed global readership of 130m in 78 countries.

Private Equity investors led by Ripplewood Holding loses their entire $600m investment. Ouch

So what went wrong?

Ad recession didn't help - revenues had fallen 18.4% last year and a further 7% in the first six months of this year. But the business had stabilised since with Group revenues down just 2% this year.

But the real killer was the weight of debt, a wopping $2.2bn taken on by the private equity buyers to make the acquisition and as cash flows came in less than they forecasted it struggled to meet its $27m interest payment.

We look forward to the Reader Digest emerging from its voluntary bankruptcy stronger and better able to deal with the new economic reality. We hopeso as we know and like this business. Interestingly the RD is one of the pioneers of direct marketing, a big believer in market research to shape content that readers want and it from the beginning it understood what other publishers are only now beginning to get their arms around namely the value of reader relationships.

Here in the UK the magazine was for awhile edited by our friend Sarah Sands (now Deputy Ed at the Evening Standard).

Get the debt under control and get back to publishing a great read that is beloved by many millions across the Globe.
Toby Constantine
Director | Market Evolution Ltd

Research | Analysis | Insight | Advice | Action


Sent from my handheld

Financial trouble is very much in vogue.

The ‘worst advertising recession in a generation’ has now affected previously untouchable high end magazines with the news that Conde Nast, the publishers of Vogue and Vanity Fair amongst others are having to make dramatic cutbacks and financial improvements in their housekeeping. A commissioned report by management consultants McKinsey and Co has found that the publishing giant fritters money away needlessly on parties and expense accounts and that cutbacks are to be made if the profit margins are to remain in the black.

The news has caused quite a stir in the American office of Vanity Fair US and an urgent sense of frugality has enveloped the ethos to such an extent that the previously heavy spending editor, Graydon Carter, who has a justified reputation for daily lunching in the more fashionable restaurants of New York has recently reportedly been frequenting the Office Canteen with alarming regularity.

It is pleasing to see that even the high end branches of the media are suffering the same effects of the recession and it will be interesting to see how, with the digital evolution taking shape for magazines, the luxury market recovers its advertising from companies who are in turn suffering from a down turn in profits and prioritising of finances.

Evolution within the market

With all the talk of paying for online content filling various media outlets it seems a good time to have a slight reflection on what consumers actually pay for online and what they may be tempted to pay for. Accepting that the face of the internet has changed dramatically in the last five years it is fair to assume that within the next five years it will change even further. This therefore brings to the fore a whole new range of internet consumers who are still in their teens, regular surfers but not yet regular purchasers . These are the constant Facebook users, MSN addicts and Social networking junkies.

One might presume that the youth of today do not use Facebook as much as regular office workers tend to, but that would be an easy mistake to make. Whilst “Pay as you Go” mobiles are cheap, contracts are only available to those over 18 and so most social interaction for teenagers is on the websites of Facebook or MSN. If either of these sites were to start charging in the near future, which indeed they may, many youngsters would still continue to use them for a small fee, undoubtedly cheaper than a mobile and with potential free SMS included, then the internet will be creating a whole generation who are already used to, and indeed expecting to, pay for content. Evolution within the market.

Charges are coming and will be around for a very long time.

Unlimited travel for $599 on Jet Blue

Much akin to an all-you-can-eat buffet or an all-you-can-read digital magazine subscription, New York-based airline JetBlue now offers customers a month of unlimited travel for USD 599.

Announced yesterday, JetBlue's All-You-Can-Jet offer lets anyone buy a pass that's good for unlimited trips to any of the airline's 56 international and domestic destinations between September 8 and October 8 of this year. Pass holders will have access to every available seat on every flight—no limits on seats, and no blackout dates—and they can book travel up to three days in advance of their trip. The only requirement is that they sign up for the airline's TrueBlue loyalty program before booking flights; buyers of an All-You-Can-Jet pass will also be awarded 35 TrueBlue points for their purchase.

Maybe BA should consider something similiar in the UK given its dwindling passenger numbers and flagging revenues?

The Economist - one-issue subscription

The Economist has launched a single copy subscription service that allows readers to order just one copy of the magazine for home delivery the next day.

The Economist Direct allows UK readers to place an order online or via text message for a single copy of the latest issue of the weekly publication.

The service does not require readers to commit to subscribing to the magazine for any period and the cost of the magazine is £4 — the same as the newsstand price.

"We think Economist Direct presents an exciting new route to market and a fundamental shift in how we think about more casual readers," said Isaac Showman, marketing nanager at the Economist.

"The service offers an amazingly straightforward and convenient way to buy The Economist in the UK and is, we believe, the first such service offered by any newspaper or magazine.

"Economist Direct also allows those who don't want the commitment of a weekly subscription to have The Economist delivered to their door."

Reason for optimism

Newspaper Web sites attract 70.3 million unique visitors in June, representing about 36% of all Internet users, according to a new Nielsen Online study commissioned by an American Association of Newspapers.

I wonder whether there isn't still a kind of audience vanity that continues in newspapers today?

These high volume audience figures look nice but the audience doesn't pay at all and the advertisers don't pay enough.

We know that charging will reduce the size of audience but surely a smaller fee paying audience is more sensible and viable than a large free one.

Time to bite the bullet and get on with charging?
Toby Constantine
Director | Market Evolution Ltd

Research | Analysis | Insight | Advice | Action

Sent from my handheld

Twitter - standalone value, or an enhancement?

Regular readers of the blog will have spotted that we're a little shizophrenic here about the value and potential use of Twitter. Waste of space, or a service with a little nugget of value buried away there somewhere? We've been undecided.

As I write, the England cricket team is currently warming up at Edgbaston, aiming to pull off a very unlikely victory against the under pressure Aussies. In this interconnected world of ours, I've been following the game on the iPhone, using the ECB app and the BBC's cricket text service. I've also been using Twitter to follow the thoughts of Bumble, Aggers, Tuffers and Jason Gillespie (who is in need of a nickname. A proper one, not the epithet given to him by the Hollies Stand on that Saturday in 2005 when I was there).

I'm enjoying hearing regular updates from the team, and it's working for me. Some of it is banal, but a lot of it is actually quite interesting, and it's a definite enhancement. Would I pay for it? Maybe a small amount. And that's a "maybe" more than I would have said 3 months ago. Would I miss it if it wasn't there again? Yes, I probably would. The jury is still out, but the debate isn't dead yet, there could be something in this Twitter thing after all.

MOODY'S Economy.com has mapped the geographic spread of the worst global downturn since the Depression. All of North America is in recession now. In Europe only Norway, Slovenia and Slovakia have avoided a similar fate, although Moody’s reckons these countries are on the brink of a downturn. Emerging Asia looks cheerier, although the small export-led economies of Singapore and Hong Kong are shrinking, as are Malaysia and Thailand. Even the BRICs are looking a bit diminished, with downturns in both Brazil and Russia. At least India and China are growing (the latter at a pace that is causing worries about overheating). Data for Africa are spotty but the continent’s biggest economy, South Africa, is in recession. The IMF expects global GDP to shrink by 1.4% this year, with rich countries’ economies contracting by around 3.8%. (source: The Economist)

Friends Reunited on the way out for £15m?

Reports are circulating that ITV may be selling Friends Reunited for a knock-down £15million, a business it bought for £175million four years ago.

If true, even in these pressured commercial times it says a lot that they are prepared to consider selling the business and taking a paper loss of £160m, and that's before we add up the amount of additional investment, salaries and marketing that has gone into the site since 2005.

The likes of Facebook, myspace and Bebo made the paid-for subscription business model obsolete remarkably quickly, but in ITV's defence, these voracious competitors are not generating profits even now. While NewsCorp and the other social networking site backers are happy to wait and see what the profitability model is, ITV simply doesn't have the pockets deep enough to fight back. It's another example of ITV being a big UK player, but a tiny Global presence.

Stick to the knitting and you might eventually make a jumper to keep your warm in the winter - as someone famous used to say. Make some good TV and sell advertising, that's what you should be good at ITV.

FT snarls at Blogs

I was surprised (and delighted) to see the FT's Lex column baring its teeth today.

The object of their ire this morning was blogs. Not all blogs (they don't doubt the popularity of the media 'upstarts') but certain high profile political blogs like TPM and Huffington Post.

Why so cross?

Well, FT is frustrated by these types of blogs who win awards and attract lots of attention, but 'riff' much of their content on mainstream news stories published by 'desperate old media companies'.

Not stopping there the FT also reminded us just how limited blog audiences are compared with those for traditional media outlets.

Whilst the FT stopped short of outright criticism they left us in no doubt of how they felt in general about blogs.

Couple of things struck me about this Lex piece:

1. Overall the FT's tone was quite defensive and reactionary using words like 'upstart'. Not classic FT ‘high ground’ positioning.

2. Also rather surprisingly they continue to choose to distinguish between old/traditional and new media. As we posted yesterday (see post below) we feel its high time we did away with these tags. So called new media has been around a long time etc and surely its all media now.

3. That said its great to see a newspaper of note engaged in redressing the facts of the media market. The facts are that although popular and in certain cases authoritative blogs are still small compared to the newspapers like the New York Times. Its high time the newspapers stopped being so defensive about their own assets and influence and got on the offensive – as we have said on this blog many, many times before.

Samsung Wrist Phone

Looks like the wrist phone concept is finally becoming a reality. This one is available in the autumn in France.

Old Media versus New media

Wise words from Robert Campbell (see post below) from Campbelllacebeta blog

'A lot of people seem bothered by the difference between old media and new media. And which kind of agency does what.

We like to look at it this way.

The first cave paintings were painted by cavemen around 32,000 years ago. The first newspaper, The Relation, was published in Germany about 400 years ago. The first big poster campaigns appeared in France in the late1800s.

TV was invented in 1922. Twitter in 1935. Don't believe us? Check this link. http://thenextweb.com/2008/08/12/twitter-invented-in-1935/ The internet was invented by the American military in the 1960s. (They must have been taking acid.) Mobile phones in the 1970s. Etc.

So we figure, when you look at it comparatively, everything is new media except cave paintings. So let's just call it all media, shall we, and get on with it.'

Campbell Lace Beta Win Thomas Cook

Campbell Lace Beta, the ad agency set up by Robert Campbell and Garry Lace, has picked up the £9 million advertising account for the travel company Thomas Cook.

Congratulations to Robert and Garry who are both friends and business partners of ours

Newspaper Guild ends standoff with New York Times Co at Boston Globe

Newspaper Guild ends standoff with New York Times Co at Boston Globe by approving a $10m package of cuts

The Boston Globe's largest union has approved a $10m (£6.1m) package of salary and benefits cuts, ending a standoff with publisher the New York Times Company, which had previously threatened to close the title.

Thought for the day

"All charming people have something to conceal, usually their total dependence on the appreciation of others."

Cyril Connolly

Rich still giving (bless em)

Image via Wikipedia

On the day that saw Goldman Sach reported bumper earnings despite the recession another story caught my eye and warmed my heart.

THE global recession has failed to dampen philanthropic spirit, with many rich people increasing their charitable giving, according to a new report from Barclays Wealth. Among the 500 British and American individuals with at least $1m of investable assets, only education was considered a more important expense than charitable commitments. Some 28% of Americans say they are giving less money compared with 18 months ago, though 26% are giving more. A similar pattern is seen among those givers from both countries who inherited their fortune. But entrepreneurs are more likely to give their cash away—31% say they have increased their giving and only 17% have reduced it.

(Source: The Economist )

Lets hope some of the GS record bonuses will make its way to charitable causes

ShortList gets a sister

It seems that the highly popular and (we believe successful) ShortList is going to joined by a sister.

The free upmarket women's weekly will be called Stylist and launch in late September/early October.

Former IPC executive Glenda Marchant has been appointed publisher and it will be edited by the editor of Bauer's More!, Lisa Smosarski.

The title will be handed out every Wednesday via a network of street vendors, initially in six cities including London, Manchester, Glasgow and Birming­ham, with a distribution of 400,000. (source: Brand Republic)

Good Luck to them. Ballsy in this market, but it goes to show get the product and the distribution right and the audience and then the ads will follow

Old Media lead the blogsphere

A new study by Cornell researchers shows that traditional (old-media) news outlets lead the blogosphere by 2.5 hours when it comes to breaking news. It's a sign that the old guard should chill out about blogs and how they're destroying the news world.

The Cornell research took an innovative new approach to studying the news cycle. Instead of examining a few case-study pieces of news and extrapolating the behavior of the different media outlets from these limited cases, it used a powerful algorithmic search. 1.6 million mainstream media and blog websites were analyzed in real-time, and to see how news propagated through them all specific phrases were sampled from each site and compared to see how they appeared elsewhere--kind of a text-based fingerprint.

By comparing where these fingerprint phrases, or memes, first surfaced, and then watching for them to pop up elsewhere online, the Cornell team has uncovered how news propagates online. To see how this works, check out Barack Obama's "lipstick on a pig" soundbite's rise to newsworthiness -it was the most prominent fingerprint phrase, or meme, found during the study.

The main result of all this is the it's still the traditional news portals who tend to break the news. Blogs followed up the stories an average of 2.5 hours later.

That's actually no surprise--blogs don't have hundreds of journalists embedded in hotspots around the globe, and don't get special invites to government press interviews. That's just the professional blogs--the millions of amateur blogs tend to be just run by a single person, and these blogs often follow the major ones in a kind of "me too!" information propagation wave.

(Source: Fast Company)

How the telephony world has changed

There are only four outdoor phone booths left in Manhattan, New York - and they’re all on West End Avenue. .

Google parks tanks on Microsoft's lawn

Google has sensed a window of opportunity: The company is taking aim at Microsoft's Windows operating system by releasing an operating system of its own. "The system, based on Google's Chrome Web browser, is designed for all classes of PCs, 'from small netbooks to full-sized desktop systems', and will be available in machines from 'multiple' PC makers in the second half of next year," according to the Financial Times.

Google promised its OS would resolve many of the frustrations of Windows users, from slow start-up times to viruses. The Chrome OS will first appear on notebooks in the second half of 2010.

And this on the day Google announced the closure of its charitable Foundation. Oh what irony!

Capitalist Fact

The largest McDonald's is in Beijing, China - measuring 28,000 square feet. It has twenty nine cash registers.

Sent from my handheld

Making money online - Murdoch's latest view

Thanks to Roy Greenslade's reporting of Rupert Murdoch's phone interview with thestreet.com on the subject of all things digital.

We work with a number of clients who are struggling with the challenge of making up declining offline revenues by growing new revenues online. It's a challenge to say the least, increasing X does not equal declining Y in this case.

A good, and very valid quote from the media mogul: "On Twitter: "It's an amazing phenomenon but I have no idea how they can monetize it. No one monetises the web today to any extent other than search.""

No one monetises the web today to any extent other than search - let's just think that one through for a moment. Rupert Murdoch is acknowledging that the hundreds of millions of pounds his global media brands have invested in digital media "solutions" is probably not going to pay back in a "non-search" way. Yes, he's looking at subscription and micro-payment models, but this is a very blunt admission from a man who has been investing in digital for a while now.

Subscription models can work, but only if the content is niche, specialist and unique enough to attract and hold onto the audience. Is this then a view from on high that mass media will not make money online? Interesting if it is.