MediaPost is reporting that Google Maps has added functionality enabling businesses to load coupons for printing when someone finds a business through the mapping service. This is to link for AdWords customers. It’s a brilliant move (click fraud notwithstanding) supporting bricks and mortar businesses and may well finally see coupons take off in Australia.
Did the Prime Minister know that the photo being taken would be partially obscured by the IG Markets ad on the front pages to today’s Australian Financial Review? Maybe his two finger salute suggests he had an inkling.
Customers hate these stuck on ads. The ones not ripped off and left at the counter usually end up as street litter.
The black line is sales for one of the women’s weeklies we sell for this week to last night and the red line is the average of the last four weeks. The graph comes directly from our point of sale system. I already know that this week will be a sell out for several titles. Woman’s Day yesterday was up 29% on average for a Monday, New Weekly up 18%, New Idea up 25% and TV Week up a whopping 61%. We have done this week what we always do – co-locating the weeklies in two and even three locations depending on the stock we have. The only difference compared to recent weeks is the OzLotto $10 million jackpot tonight (Tuesday) and this has driven some extra traffic. While I am thrilled with the sales kick, the volatility is frustrating. For some titles we will sell out by mid week and the supply chain will not have capacity to replenish our requirements. The scale out model used by magazine publishers and distributors leaves little room for volatility like we are seeing this week – both to recover and to provide capacity with initial delivery. There must be a solution otherwise newsagents will not be able to grow sales to their full potential. I should not sell out of a weekly magazine ever in my view. To sell out three days into the week, as is likely with one major title, is dreadful.
Mark Glaser has written an excellent piece about the shift of control in media. Consumers are in control now more than ever. This movement will grow as their news and entertainment desires are satisfied by independent sources rather than those from mass media outlets. Consider these three examples from Glaser:
Oldthink: Relying on mainstream media TV coverage to follow wars and conflicts.
Newthink: Reading bloggers or citizen journalists who are eyewitnesses to wars, or soldier bloggers who are participants and can share their own stories in words or video. Seeing photos from people with cameraphones at the scene.
Oldthink: Reading, listening or watching media on the schedules set by executives and programmers.
Newthink: Getting the information, news and entertainment we want, when we want it, on the device we want it, with or without commercials.
Oldthink: Turning on car radios to hear the music or radio shows we enjoy.
Newthink: Getting satellite radio or plugging in portable MP3 players to our car stereos so we can listen to hundreds of commercial-free stations on satellite or thousands of podcasts downloaded from the Internet.
I’d add my own:
Oldthink: It was smart to pay to get to the top of a search list or on the front page.
Newthink: Be where people will want you – they will ignore those who pay extra to be noticed.
Oldthink: People trust the masthead and all it carries.
Newthink: People trust people more – now that people have their own voice.
Oldthink: the price of a classified ad is based on the number of gatekeepers.
Newthink: the price of a classified ad is based the cost of providing the service.
You have to wonder who made the decision to move the newspaper stand in the Safeway supermarket which resulted in a four fold increase in returns. I bet it’s back in its old spot within the week. It’s another reminder to publishers of the disciplines of newsagents compared to the arrogance of supermarkets.
News Ltd telemarketers have been calling country NSW with a special home delivery offer for the Daily Telegraph, promising a 6 am delivery. This is a challenge when the newsagent in at least one region does not get delivery from News before 8:30am. News has known about this for years yet allows the telemarketers to make the offer. The newsagent is left to field calls from disgruntled subscribers.
Based on the sales data I am seeing, Burke’s Backyard either needs to get back on TV or reinvent itself. Money and Good Medicine also suffer from non airtime but Burke’s Backyard seems to suffer more. Hmmm, maybe package the three into a new show just to drive magazine sales.
Given that newsagents sell more than half all magazines sold in Australia, it is disappointing that we do not actively participate in the annual MPA Magazine of the Year awards. Through the industry association (ANF) there has been a small involvement in the past but no more from what I can tell. I’d like to see a publisher of the year, issue of the year and cover of the year award judged by newsagents. It is this type of engagement with newsagents which would help publishers achieve greater sales through our channel. Newsagents care about product placement and sell out whereas supermarkets and convenience outlets care less.
The government owned Australia Post shop opposite my newsagents is plastered with posters offering 10% off ink and toner in store. As a privately owned small business I cannot compete. One day the politicians will realise that their policies have participated in the closure of newsagencies.
A newspaper publisher asked the software company I own, Tower Systems, to develop an enhancement to our newsagency software to help them and help newsagents. As usual with such publisher requests, there was no offer to cover our costs – development, testing, roll out and support will cost us more than $15,000. The cost would be less if we delivered the enhancement as part of our next scheduled software update – due in September. Rather than wait for our scheduled update, a representative of the publisher clumsily emailed us two days ago, talking about a competitor…
… have told us that they have completed building this new functionality into their system and are working with us to test it now. I imagine they will be trying to market it with their new software shortly as it poses quite a benefit for newsagents.
It is disappointing that a publisher posting a multi billion dollar profit result expects small business software companies like mine to develop and deploy functionality exclusively for them and to a time schedule to suit them. It is offensive that one of their representatives tries to make out that a competitor is better than us because they may deliver this one change ahead of us. We have responded the only way we can – by taking our software developers off newsagent requested enhancements and putting them on the enhancements required by the publisher.
I and my company have been good and faithful servants of newsagents, publishers and their other suppliers for more than twenty five years. Sometimes, newsagent supplier behavior makes me question why I remain involved. This forum at least allows the opportunity to vent.
PMP announced a $6 million turnaround yesterday for their magazine distribution division, Gordon and Gotch. The good news for newsagents is that Gotch has turned around in profit and service. Through 2004 newsagents were complaining that Gotch seriously oversupplied. In 2005 the company made some tough decisions on titles and improved the service they offer newsagents. That Gotch improved in newsagent eyes and at the bottom line an excellent result. Now, Gotch and all magazine distributors need to review titles they carry and either better compensate newsagents for titles which are cash-flow negative or cut titles which otherwise underperform.
Newsagents are only paid for titles which sell. Unlike magazine distributors they are not paid for stock they display and ultimately return as unsold.
I blogged here recently about Zoo Weekly and how the publishers might achieve better results in newsagencies through a display unit which allows placement with newspapers. On Monday, the stand shown in the photo was delivered to my shop and now we can display Zoo Weekly next to newspapers.
I am guessing that we were the stand because I blogged about it here. As I understand it, the stand has not been made available to all newsagents. It should be.
Zoo will sell better in convenience, transit and similareas than newsagencies. However, if EMap wants to build brand awareness then newsagencies are key. Don’t neglect them.
15. Average sell through rate – 25%. The same companies supplying these titles want us to sell more of the top sellers yet it is these long tail titles which drain cash and space and therefore reduce resources to grow at the top end.
Lulu is turning book publishing on its ear by bypassing the gatekeeper – the publishers. You can self publish your manuscript through lulu for nothing thanks to print on demand technology. Authors make a handsome commission when a book is sold. Lulu claims as many as 1,000 new manuscripts a week. Publishers will say that many are of poor quality and while this may be true for some titles, their track record on quality is not all that clean.
My interest in lulu and print on demand more generally is whether this technology will help more people enter the magazine space and professionally produce new, non shelf life restricted, titles. It seems to me that in the more special interest areas a lulu type offering could work well and enable wannabee publishers to enter the space without the costs base of traditional magazine publishers.
Lulu already allows for self publishing of books, CDs, DVDs and calendars so magazines are not a giant leap.
The Fairfax owned Trade Me has launched their online employment offering in New Zealand jobs has launched. Here’s the pitch they have emailed to their registered users to promote Trade Me Jobs:
A year ago we launched Trade Me Property and, thanks to your fantastic support, we are now New Zealand’s #1 real estate website.
But your house isn’t your most important asset…. you are!
So… Introducing Trade Me Jobs
We’re delighted that dozens of recruiters and employers have already committed to advertising on Trade Me Jobs. Trade Me members are smarter than most, so we look forward to connecting employers with some great candidates.
To celebrate, we have a special launch offer: list a job vacancy on Trade Me Jobs before midnight Thursday for just $25 (normally $49). Finding a job is, of course, always free.
Given the money invested in and the success of the Trade Me brand, Fairfax would have to be considering bringing it to Australia. My reasoning is that MyCareer and Domain are fixed in consumer’s minds as a newspaper and online offering whereas Trade Me in online only. Trade Me, Trade Me Property and Trade Me Jobs would better compete with the pure online plays.
Last year we sold 30% of the 17 copies of the ABC Open Garden Scheme magazine. This year, the distribution experts at NDD have sent us 21. With a $16.95 cover price and an eight month shelf life, this title will never be cash flow positive in my business. The real-estate costs alone are more than $6.00 a month. I need to sell two copies a month to break even. Newsagents make 25% from this title. I am certain that ABC Shops and ABC Centres would make more than 25% from this title.
Beyond the issue of fairness of margin, I am concerned about the supply model itself. Why is the scale out quantity this year greater than last when the evidence suggests I will sell no more than ten copies? This seems to be a dash for my cash by NDD and by ABC Enterprises – maybe I’m helping them cover their loss on the Alan Jones biography which they canned earlier this year?
Small business Newsagents are used (abused?) in situations like this – where publishers use several retail channels to distribute a title – to build brand awareness. Newsagents attract more traffic than ABC Shops and a title such as this is likely to be browsed several times prior to purchase. Newsagents are the ultimate browsing destination. For this reason and because of its cover price and shelf price it would be fairer for the ABC to pay newsagents a stocking fee or, say, $2.00 a copy as well as a 45% commission on sale. Alternatively, they could supply product on a consignment basis with newsagents paying only when they sell a copy.
The 21 copies of the ABC Open Garden Scheme will cost me $266.96 this month. At best I will recover part of that over the next eight months through sales. The rest will come back to me in May 2007 once returns for the title and finally processed by the magazine distributor. This drain of cash makes it harder for small business newsagents to focus on the growth areas in their businesses such as women’s weeklies – New Idea, Woman’s Day, Take 5 and That’s Life.
If newsagents made a fairer margin or were paid a stocking fee I am certain that the ABC and NDD would scale out more carefully. The generosity of newsagents allows them to be lazy and puts newsagents at a disadvantage to their competitors.
I heard today from a former newsagent today about the challenges he faced in dealing with two major suppliers following the sale of his business. One newspaper publisher insisted that his solicitor hold a cheque for $15,000 until final account was paid even though he had an exemplary payment record. It took this supplier a month to finalise return credits – the final amount owing was $2,500. Another supplier allocated final return credits to the incoming newsagent and it took a month to get this sorted out and the appropriate credit arranged.
For decades newsagents have treated bag sales as the poor cousin to greeting cards. No more as this photo from my shop shows. Australia’s biggest greeting card and bag suppliers Hallmark and John Sands are working with newsagents to reinvent the category and better compete with the majors. This new approach to merchandising is having an immediate effect on sales and lifts newsagents out of the 1970s. In our own case we are finding that this new display leads to bags being purchased with cards more often – leading to a more efficient basket.
The Government’s role is to ensure that the Australian Postal Corporation Act 1989 establishes the proper basis for continuing provision of postal services consistent with the Government’s social and economic objectives.
This is from an Adviser to the Minister for Communications Information Technology and the Arts writing to me last month in response to my complaints that Australia Post corporate stores are taking business from small business newsagents like me.
I have written to the Minister as well as other Ministers and Opposition members in the Parliament several times to draw to their attention to how far Australia Post has strayed from providing a postal service and that in doing this their 865 government owned stores are using the respected Australia Post brand to take business from independently owned small businesses.
How this can be defended as a social and economic objective of the Government is beyond me. I have told the government that the actions of Australia Post will contribute to the closure of some independent newsagents. Their response is spin.
…Australia Post is continually reviewing its services by examining costs, revenue and performance, including the capacity to meet contemporary customer needs.
Government sets the policy. They can, if they choose, direct Australia Post to focus on mail services and retreat from pursuing stationery, greeting card and other product lines which are already well covered by major and independent retailers.
My newsagency is opposite a government owned post office. They price compete with us on a range of products. We cannot match their buying power, nor their brand recognition. We cannot also match their sweetheart landlord deal which enables them to trade for half a day Saturday and not at all on a Sunday and therefore avoid huge penalty rates. If they want to compete with businesses like mine they ought to be forced to open as we do. This would force them to increase their prices. That they can close when they choose is proof that Australia Post uses its government ownership to leverage an unfair advantage.
The letter from the adviser ends:
Thank you for bringing your concerns to the Minister’s attention.
I doubt the Minister is even aware of the concerns for if she were she would want to understand more about how the policy of her government is hurting small businesses like mine. My newsagency was selling stationery for decades before Australia Post got into stationery. We were selling greeting cards for decades before they started. A Government concerned about small business would want to know how an enterprise they wholly own is ripping millions of dollars of sales out of the independent retail sector so they can be paid to Australia Post executives through performance bonuses and back to the Government in dividends.
The blood of businesses which close a result of competition from Australia Post will be on the Howard Government’s hands.
The ANF a week ago reported that more than 160 newsagents are now providing returns data to magazine distributor Gordon and Gotch electronically. This good news story neglected to record that 90% of those newsagents are using software from my company, Tower Systems.
Electronic returns, or EDI returns as the process is more accurately called, cuts paperwork for newsagents and will lead to faster credit for stock which has not sold. This is a good cash-flow story for newsagents and I am proud that my company is leading the way.
There is a great viral campaign doing the rounds of email inboxes for Snakes On A Plane, a soon to be released movie with Samuel L Jackson. How it works is that you go to the website, enter some details about a friend and they are sent a personal invitation from Jackson to see the movie. It’s campaigns like this which are disrupting more traditional media, especially for films, TV shows and music.
While it may seem like a stretch, newsagents could play a role in over the counter viral campaigns given their contact with millions of consumers every week.
NSW newsagents were finally granted a small increase in home delivery fees they can charge for the delivery of Fairfax newspapers last month. I’m told that recent research shows that this increase still falls short of the actual cost of providing the service by up to 50% in some areas and as little as 10% in other areas.
Newspaper executives in Australia and elsewhere have commented on the efficiency of the newspaper home delivery model in Australia. Our penetration is deeper than most other countries.
This success with newspaper home delivery is, in the main, due to newsagents subsidising the home delivery service.
The inadequacy of the latest delivery fee increase in NSW is another reason more newsagents will sell or abandon their round.
What a great initiative. From their website:
To ensure the continued vibrancy of the Canadian magazine industry, the Government of Canada created the Canada Magazine Fund (CMF). Launched in 2000 as a key element of the Government’s comprehensive policy in support of the Canadian magazine industry, the CMF will contribute toward the production of high-quality magazines showcasing the work of a wide cross-section of Canadian creators. The CMF will also help build industry capacity through support for business development of small magazine publishers, industry development projects and support for arts and literary magazines.
Newsagents are getting loaded up with tertiary education guides – not just from their state but others. Guides sell well in their local states. Interstate sales are weak. With cover prices up to $20.00 and newsagents having to pay well in advance of them selling or being returns, they are usually cash-flow negative. It’s an unreasonable grab for cash by the tertiary entrance committees and magazine distributors involved. A fairer approach would be for newsagents to control the quantity of stock they receive and have billing delayed until December with a January settlement. The current situation is unfair to newsagents.
It’s good to see OK! moving weekly. I’d not seen any comment on the planned on sale day and for me that’s a big question. If it is a Monday there will be a real-estate problem given newsagents, who sell half all magazines Australia, have Woman’s Day, New Idea, TV Week, NW and Famous out on a Monday. On a Friday we have Who and given the pitch of the OK! monthly magazine I’d say Who is the likely competitor. Friday would be easier from a real-estate perspective and it could boost Fridays and that would be welcome. The other on sale day possibility is Wednesdays. The problem with that is it’s the Take 5 and That’s Life on sale day and the demographic match is not good.
If I were launching OK! I’d buck the trend and launch on a Wednesday. It would be the only title of its type on sale on a Wednesday except when Women’s Weekly comes out once a month. I’d provide newsagents with preassembled counter display units which provide for a full face display. In the month leading to the launch I’d provide newsagents with a one page double sided give away with a story and a couple of photos and a tease piece about the new magazine about to arrive. This helps set newsagents and consumers up for the habit. I’d create a second display unit to facilitate promoting the title next to newspapers as this is where the most traffic is in a newsagency.
Publishers launching new titles need to spend time in newsagencies. Too many launch strategies are developed by marketing departments with little understanding of how people shop for magazines.