The LostRemote blog has this report and a fascinating graph quoting a US study showing that US “newspaper sites grossed $81 million in local video advertising in 2006, compared to $32 million for local TV sites”. I’d love to see state from Australia.
Last year Vodafone slashed commission it pays to 3,500+ newsagent retail partners by 37%. Today I read a GigaOM that they have paid US$11 billion for Hutch Essar, the third largest mobile company in India. Okay, I agree I am drawing a long bow. However, Om Malik says
Vodafone historically has been one of the worst telecom operators when it comes to mergers and acquisitions – bad deals, ill-timed exits and overpaying are part of company’s legacy. By putting a valuation of close to $19 billion for Hutch Essar, the third largest mobile company in India, with about 24 million mobile subscribers, the British giant has ensured that legacy remains unchanged.
Maybe if Vodafone focused on its existing customers and service network more it would improve the return from what it has rather than cost cutting against weak small businesses and overpaying in acquisitions.
Several newsagents with Licenced Post Offices have told me that Australia Post has recently advised them that if they do not remove the Bill Express equipment from their counter immediately they face a dramatic increase fees association with Australia Post terminals.
Fran Bailey, the Federal Minister for Small Business, was on ABC Radio touting her government’s small business credentials. The Minister ought to acquaint herself with for Australia Post operates. They are competing with newsagents for customers through Government owned stores and now, if what I have heard is correct, they are pursuing newsagent LPOs over services they can provide.
Spread the love and send a free Valentines eCard courtesy of our 3loves free online dating site. Click the image to the left or click here. You don’t need to be a 3loves member or connected with the site in any way. For us it’s a way of spreading the love and our message along with it.
3loves is one of four social media sites we have created to drive traffic for our Find It online classifieds.
Fairfax Digital’s revenue was $61.2 million, up 43.7%, with a profit at the EBITDA level of $17.0 million, up 41.7% over the previous corresponding period.
Revenues grew strongly across all news and classified sites. Total traffic across all the Fairfax sites increased to over 6.2 million unique browsers per month, up 47.8% on the previous corresponding period. Fairfax Digital enjoys the leadership positions in online news (smh.com.au and theage.com.au), online dating (RSVP), and holiday rentals (Stayz), and strong positions in the employment, real estate and automotive classified categories. Fairfax Digital continues to invest in improving its competitive position in key markets, such as with the recent acquisition of Essential Baby and the launch of property site in.domain.com.au in Adelaide.
Fairfax released a good set of numbers yesterday thanks, in main, due to the excellent growth in its digital business.
As a newsagent I am tempted to blog from a negative perspective about Fairfax moving its revenue base from print to online and bemoan what this means for my business. The reality is that Fairfax is doing what every other major print media player globally is doing but with more success than most. They are advanced in monetising their traditional print brands through online offerings and they are bringing in new eyeballs and revenue through acquisition. The Trade Me acquisition from just a year ago, for example, has delivered A$20 million of the earnings.
Newsagents need to follow the Fairfax lead and find new sources of eyeballs and revenue to replace print products. Some are doing this, most are not. Newsagents need to be wary of investing capital in traditional areas of their businesses such as newspapers and magazines.
While sales will be key for years to come, they are not as strategies as they once were. The key investments will related to gaining greater efficiency from these decaying products. This is the big challenge for newsagents just as it is for Fairfax – they will drive production and distribution costs for newspapers and newsagents will bear some cost from that action. Home delivery margins must fall is Fairfax is to protect earnings from newspapers. Rural Press has been successful at this and Brian McCarthy’s role in the soon to merge Fairfax / Rural Press operation could see him bring Rural Press strategies to Fairfax. If this happens newsagents can expect to experience pain.
I have blogged here before about areas newsagents could consider developing in an effort to broaden the appeal of their businesses. The challenge is to alter the mindset of most newsagents. Having operated in highly regulated businesses and under the direction of powerful suppliers, newsagents are not used to being entrepreneurial. This must change.
For my part, my newsagency is benefiting from changes we have made over the last two years: creation of a card shop within a shop and to the front of our retail space; selling the home delivery run; entry into the art supplies space; expansion of our stationery offering; bold entry into the ink and toner space; and, better proactive management of our lottery offerings. The results achieved through these initiatives are excellent. Traffic is up and basket depth has improved.
We obsess about customer efficiency. Two years ago 77% of our customers used to purchase a newspaper and nothing else. Today, that number is 57%. While I say newspapers are challenged in the long term, our short to medium term goal is to ensure that newspapers customer are more efficient for us. We’ve implemented simple strategies to make this happen.
This is part of an invoice sent to a Coles store over a year ago listing the recharge products purchased and the commissions paid. It shows that they earn twice the commission newsagents earn. I know from nearby newsagents that they are likely to do considerably more recharge business than Coles.
Optus is preparing to reduce its commissions to newsagents again. My understanding is that commission on recharge will drop to 5%. I suspect that Coles will be on 12% or more for the same product. Plus, they have the benefit of the cash received for up to 30 days as they pay monthly. Newsagents pay daily.
Companies such as Optus have an obligation to be fair in their dealings with small businesses. To cut newsagent commission while paying Coles three and more times as much would be morally unconscionable. I hope that Optus considers this as it navigates its planned commission cut.
Valentine’s Day is one of those seasons which happens at the last minute. We all dress our stores and wait with crossed fingers hoping shoppers engage. As part of our preparations, Darrell Lea has made good use of our window:
Following good advice from VANA I have modified the lottery petition to more accurately reflect the value proposition from newsagents and other small business outlets. The modified counter top petition can be download here. For the online petition please click here.
Please, let people know about this petition and get them supporting newsagents and small business.
Sales of this month’s issue of The Monthly are double recent months at my shop. I wonder if it is a reflection of the polling results today showing Kevin Rudd as the preferred Prime Minister over John Howard.
The Monthly’s sales, being a relatively new title, are cover driven. This is why we try and place it where the whole cover can be seen as opposed to the usual magazine fixturing. For the first week of on sale the best location seems to be above The Age in our newspaper stand. We’ve tried placing The Monthly with our weekly newsmagazines without much success.
What prompted me to look at sales data is today’s cover story in The Age – when I saw it and The Monthly together.
Advertising representatives working for a major suburban newspaper group have had their sales quota increased by 10% for the second time in twelve months. The quota must be reached before commission is paid. For many, the quota goal is unattainable. This move effectively operates as a pay cut. During the same period the same company has increased advertising rates.
Better store design can fix cash flow problems for newsagents.
I am currently working with eight newsagents on cash-flow challenges which mainly stem from magazines. In some cases the cash-flow problems have come about by poor management by the newsagent and in other cases magazine distributors are to blame. I’m not an expert, but I do have access to significant industry wide data through my software company and can apply that to gain an understanding of the problems.
In one newsagency, the overall sell through rate of all titles from each of two magazine distributors is 45%. That is, 55% of all magazine stock sent over the course of a year did not sell. The combined cash-flow position for the two distributors in the newsagency in question is in excess of $25,000. So, taking into account retail real-estate, labour to manage the titles and invoices and credits and the newsagent is $25,000 worse off for having this stock.
There is no excuse for this behaviour given that both companies have sales data which would tell them the negative financial impact they are having on the newsagent. They are ignoring their own data. Some reading this will say the newsagent can cut the title from what they receive. This is not how magazine distributors operate. Every newsagent has evidence of distributors agreeing to cut a title only to find it or a similar title added to supply in a few months.
This photo from my shop illustrates part of the problem newsagents face.
We have two big aisles of magazines. It takes up 40% of our shopping centre based floor space. This is how newsagencies have been laid out for years. Chunky magazine display space. We’re the magazine specialists, of course we will give plenty of real-estate to the department. Distributors know that and they scale out accordingly.
Our shops are designed to take a huge range without displaying it in the best possible light.
Newsagents need to reduce magazine shelf space by as much as 33%. Until this is done and suppliers formally notified in writing, the supply model will not alter. Magazine distributors have shown collectively that they are not capable of managing our real-estate so we must. Of course, we should have been doing this years ago. But we trusted our partners and we trusted our shop designers – these designers have a lot to answer for.
Most newsagents won’t reduce magazine space because they think they have nothing to replace the stock with and because, despite the issues, magazines are easy – no stocking, pricing or ranging decisions. So, laziness and lack of entrepreneurial spirit stops the problem most complained about being addressed across the channel.
The entrepreneurial newsagents will win. Some are active today and history will recognise them as visionary.
Too often we’re our own worst enemy.
New Scientist is offering up to four free copies if you complete a survey for them. I have two problems with this: 1. to promote the survey they have put a header card in our display area effectively blocking the view of Scientific American and, 2. people who enter have the free copies mailed to them along with, I am sure, a pitch to convert from retail purchase to direct subscription delivery.
Please help Victorian newsagents lobby the State Government as they consider whether to grant the Greek company Intralot rights to sell scratch tickets. Intralot has been reported as saying they plan to sell scratch tickets through supermarkets. The petition is setup at the respected Go Petition here.
We have been running a petition in our shop for several days and it was with encouragement from our customers that we created this online petition.
Our customers are telling us they prefer the personal service on a newsagency. One told me that they come to us with a mind to purchase lottery products whereas he does not want to face that temptation when buying groceries.
My view is that supermarkets are already bloated with range and profits. Their employees operate like automatons. Lottery products require attention not only for accuracy but also for compliance.
This is one of the ads we have just started running at our 3loves free online dating website. 3loves is one of four social media sites we are building to drive traffic to Find It online classifieds.
Find It is being launched in partnership with newsagents – newsagents will earn commission when we start charging for advertising. We have contracted to profit share with newsagents.
By clicking on the newsagent ad at 3loves people get to the Find It database of newsagents.
We have only just started running banner ads on 3loves. More banner ads for newsagents will be added over the next two weeks. We will be tracking how many people click on the ads and search for a newsagency. This link is another reason newsagents need to place their free business ads on Find It – currently there are 1,000 newsagents listed. Only a few have loaded photos. Check out the listing for Beechworth Newsagency and my business, newsXpress Forest Hill.
3loves is achieving close to 2,000 visits and 8,000 to 10,000 page views a day. The current newsagent ad will be on a third of all pages viewed. To my knowledge this is the first time the generic newsagent shingle has been advertised online in this way. The benefit is only there for Find It newsagents as they are the ones listed when visitors click the link.
With 4,200+ profiles now online, 3loves is growing well. The interaction between people with profiles is about day to day stuff and not just dating. Having a newsagent message in the background during this contact helps us promote the channel and our local community focus without bigger business noise drowning us out.
I’ve added a button to the right for people looking for a newsagent by postcode. As well as a text list you can see newsagents in the area by a map. Enter a postcode and click the button to start the search.
With so much visual noise in newsagencies it’s hard for publishers to cut through. The folks at OK! have hit on a good idea with this counter unit. The key is to have product nearby for impulse purchase.
We launched the first ever Magazine loyalty program in August 2004. We planned for our Magazine Club Card to run for six months. It’s now run for two years and five months without a break. While some individual newsagents have embraced our loyalty program with success, the most sustained success has been achieved by newsXpress newsagents.
There is more science to the Magazine Club Card program than printing a card and pitching the offer to customers across the counter or on a poster. There are rules, disciplines, magazine layout implications and day to day management changes which integrate to deliver what one magazine publisher calls the most significant sales growth achieved by any magazine banner group.
I mention this by way of background to what I really want to blog about – the new Magazine Madness promotion by Newspower. Like any parent I am proud to see how far my initial single store promotion has traveled. The Newspower execution is not as good as it could be. The purchase rules will not drive sales as much as I see in my shop. The lower redemption value dilutes the reward.
Customers are smart. A good loyalty program needs to offer a genuine reward for an achievable yet above average commitment from the customer. The Magazine Madness campaign from Newspower does not do this.
I’d welcome an opportunity to help any newsagent with any aspect of their business. If I knew Newspower were launching into the magazine loyalty space I’d have suggested they play elsewhere – not because of the competition but to ‘own’ a point of difference. Newspower has one key and exclusive asset, membership numbers. They are the largest marketing group of newsagents in the country. Their size and geographic spread could have been leveraged in a more powerful and unique campaign than any single store of a small group of stores.
Every day at my newsagency we pitch the Magazine Club Card to customers we’re seeing for the first time. We still get a buzz from their joy at the opportunity to same money on magazines. I know we continue to pull sales from the supermarkets because of the program. Locally, it is one of our key points of difference.
Rupert Murdoch on newspapers:
“I think they’re very vulnerable… We have to learn to look at them quite differently.â€
Read more at Jeff Jarvis’ BuzzMachine blog. Jeff is blogging live from the McGraw Hill media Summit in New York.
One of our suppliers sent us this cool MIO C310 satnav device as a rebate for our purchases last month. We’re using it as a prize to drive ink and toner sales. Newsagents don’t often have access to rebate products such as this from suppliers so it will be good to kick sales along and make one lucky customer very happy.
Valentine’s Day sales are usually made two or three days out from the big day. This year we’re seeing sales kick in sooner thanks, in part, due to this outpost we’ve been able to negotiate for a low price with the landlord. We used to run an outpost on another level but with Kmart going we felt we’re better off building noise on our level. Others tell me their sales are tracking well too.
The Valentine’s Day product which seemed like a good idea at the time.
Karma Sutra chocolate, how could this NOT be great for Valentine’s Day? We saw the samples and laughed. Yeah, a bit edgy with the designs but fun. And chocolate, who doesn’t like chocolate?
Plenty it seems. We’ve had our Karma Sutra Valentine’s Day chocolate out on display for two days and the complaints are rolling in. Some sales too, but more complaints. I am guessing that our complainers have not looked in some of our cards.
Below is a photo so don’t scroll down if you’re likely to be offended.
We picked the product as a point of difference from the usual Valentine’s Day fare. Those who have bought it like it for this reason.
Worst case if it does not sell is that we get to eat it.
Newsagents are fighting with the stationery wholesaler they own to stop newsagent competitors getting equal deals.
GNS (Group Newsagency Supplies) was established decades ago in NSW to give newsagents access to stationery at competitive prices. Now, with offices up the eastern Seaboard, GNS is the largest supplier of stationery to newsagents. It is 100% owned by newsagents.
Imaging the surprise when newsagents discover GNS branded product in non newsagent retail outlets – such as the Licenced Post Office shown in the photo below. In the yellow box is GNS branded product also sold in the newsagency next door to the post office.
GNS is transparent about supplying non newsagent retail outlets and I have no quarrel with that. What is wrong here is GNS supplying GNS branded product, the newsagent funded brand, to non newsagent outlets. I might also have an issue with the price GNS charges non newsagent outlets if I knew the pricing arrangements for them.
Why does this matter? GNS is the first to complain when newsagents purchase stationery elsewhere. They berate newsagents saying that they should support the warehouse they own. This also applies to GNS. The best way for them to lead newsagents to be loyal is for them to be loyal to their shareholders.
The newsagent who brought this situation to my attention has been treated poorly by GNS with no answers provided as to how GNS branded product gets on the shelf of the post office.
I am a shareholder in GNS and my newsagency buys its stationery from GNS.
Signatures on our petition to call on the Government to not allow the sale of scratch lottery tickets in supermarkets are growing. Without any pitch or fanfare customers read the sheet and sign up. More are commenting across the counter with extra comments about Coles and Safeway. If more newsagents put this or a similar petition out I am sure we could have thousands of signatures in a few days and surely the government would have to take notice.
I don’t want instant scratch tickets told in supermarkets because this would reduce sales in my newsagency and that would have a knock on effect through the business. I am sure most newsagents in Victoria would agree with me.
Unfortunately, the industry association does not seem engaged with this issue.
Magazine publishers are building extraordinary online traffic for established print brands.
Last year the Magazine Publishers of America published the Top 10 Websites Associated with Magazine Brands as collated by the Media Industry Newsletter. The growth experienced by some of these magazine websites is extraordinary. Take Vanity Fair – pageviews up 64% November 2006 over October 2006; unique visitors up by 65%. That’s extraordinary growth. Other magazines are experiencing similar: Premiere; Popular Science; Time; In Style; Men’s Health.
What’s interesting yet not unexpected is that many of the titles experiencing extraordinary growth in online traffic are experiencing flat or falling sales over the retail counter. Take Popular Science: 1,055,038 unique visitors. Great online growth while at retail the science category in retail is falling – down more than 10% in 2006.
Magazines are not dead. Many titles are using their online presence to stay in touch with readers as well as attract people new to the brand. Some categories are fading and the retailer challenge is to balance real-estate up to reflect this.
Wired has the story. Okay, it’s a small circulation title with legal listings. That does not diminish the significance of the move.
I first read this story about Sweden’s Post-och Inrikes Tidningar somewhere else last month and thought it was not worth blogging about. Then, today, I heard Cemeron Reilly of the Podcast Network and James Farmer, the online Community Editor for The Age debating the role of ‘citizen media with Jon Faine on ABC local radio in Melbourne. Farmer was talking down the impact of online on mainstream media. Reilly batted well for the disruptors. Farmer would have us believe that most blogs are a waste of time and irrelevant. Traffic says otherwise. Feedback at blogs says otherwise. Blogs provide a better opportunity for transparent democracy than mainstream media could ever offer.
Mainstream media has lost its monopoly on access to the masses and it’s struggling to come to grips with that.
How we consume media is changing. In a small way I’m covering some the change in this blog – in the context of change impacting Australian newsagencies. There is no point resisting such inevitable and good-for-the-community change. Indeed, we ought to embrace it. The challenge is how we in small business deal with this when our suppliers do not adjust their behaviour.
Take computer magazines. Sales in the category are in free-fall. The top selling titles are doing okay but outside these five or six titles, everything else is in trouble. Newsagents are still being supplied at quantities reminiscent of the halcyon days. This is sucking their businesses of cash. Fixing the problem is taking newsagents away from adjusting their businesses elsewhere to address the challenge of consumers accessing online what they used to buy in a newsagency.