A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Why would you advertise in the newspaper?

I have just listed an apartment for sale and was talking with the real-estate agent over the weekend about the marketing strategy. Whereas in 2005 he used a mix of newspapers and online, he has made the decision to go 100% online this year. For him online is 5% of the cost of newspapers and he can still charge the customer around the same price. So it’s a margin proposition. I’ll leave the ethics of the charge to the customer for another time because what interests me here is the decision to turn his back on print altogether. He’s done his homework on where leads are generated and he says that leads from newspapers cost at least 20 times than of online and even then most of the newspaper leads would have found their way to him through the online advertising anyway.

No wonder Saturday newspaper sales are down.

As my real-estate agent friend said “as far as real-estate is concerned, newspapers are dead”.

It gives me no joy to pass on this story. Howerer, we cannot ignore the reality. The challenge is to repkace newspaper driven relevance of newsagencies with other products and services and to do this quickly.

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Shop Til You Drop causes dropping of the magazine

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With Shop Til You Drop this month you get a free pair of thongs (for those outside Australia you wear them on your feet). This very nice giveaway is having unintended consequences in store. Customers see the magazine, pick it up, notice the thongs in the bag, drop the magazine to the floor, slip a show off and check their feet against the size of the thongs. If it’s not a fit some go through the stock looking for a fit, others put the magazine back on the shelf for the next customer to come along and rub their skin against the bag looking for a fit.

I’ve personally witnessed this four times in my own shop over the last week. We have Shop Til You Drop displayed in two places and it’s right at our main counter that I have seen customers do this most often. No shame. No worrying about what’s been rubbed on the cover. No concern for getting the retail product dirty. It least it’s tactile retailing.

The things you see…

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Newsagency challenges

Spanish newsagents to strike over tobacco laws

From the Spain Herald:

Fallout from anti-smoking law begins
Though health minister Elena Salgado said that the new anti-smoking law had been accepted “with complete normality,” Spain’s newsagents have announced a strike on January 30, along with a petition drive, to permit them to sell cigarettes. They feel discriminated against because bars and restaurants are still permitted to sell tobacco, but they are not. According to the president of the newsagents’ association, Juan Viciosa, the prohibition on cigarette sales may reduce their revenues by as much as 30%, putting many news dealers out of business. Viciosa said the new law has favored other sectors by giving bars and restaurants eight months to comply and the motor racing industry three years. “They’ve taken away all our rights with the stroke of a pen and probably one of every three newsstands will end up closing,” he said. There are some 35,000 newsstands in Spain.

It’s tough in small business all over the world. They seem to have a point. For many newsagents in Australia tobacco provides important foot traffic and revenue. It’s a legal product so restrictions on where it can be purchased ought to be challenged.

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Newsagency challenges

News is now and not when the holidays are over

How people consumer news and information has changed yet too many publishers are running things the way they used to – with fractional coverage over the peak summer / holiday period. Newspaper publishers especially. Thanks to the immediacy of online and the accessibility of mobile, people consume more by grazing and doing this almost real time as opposed to after the event. While sales of newspapers may dip at this time of the year, to publish a product which is but a shadow of its usual self is only a turn off and demonstrates a lack of regard for consumers. I see it in my retail situation – customers comment that they should be charged less for a thin newspaper.

Newspaper publishers are demonstrating daily why online is more important for news stories and advertising this summer.

I’d prefer them to embrace summer and either use the different traffic to attract new readers – they are there – or, offer summer pricing in recognition of the different summer offer.

But then I look at their websites and it’s business as usual so maybe they do get it.

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Newspapers

Is the DVD market dead in 2006?

Eyes are on Las Vegas this week and the annual Consumer Electronics Show. There are plenty of news reports and blog entries about all the new gizmos and corporate announcements. Two trends are fascinating – developments in portable video players and the probability that movie studios will release through Video on Demand on the same day as they release DVD product. Surely DVD has a limited life. With VOD the supply chain is dramatically shorter, costs less and the product therefore able to be less. There is no need for the retail network. It also provides the consumer with access flexibility.

It started with music. Movies are next – this year.

And with these sexy portable video devices looms the prospect of more magazine type content being made available for that medium than the printed medium. All the more reason for Australian newsagencies to start delivering this year on a long overdue reinvention of purpose.

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Newsagency challenges

More evidence of calendar market collapse

Okay so everyone cut the retail price of their calendars by 50% on Boxing day. Now, barely a few days later, consumers are already asking when they will be 75% off. They know it will happen because we have educated them. Talk about ruining a marketplace for yourself. In my own retail store we were discounting by 75% this time last year. In fact, from January 1. Over the last four days we have sold 80% of last year’s volume but at double the margin. I’ll stick with this for a few more days and enjoy the margin. If more calendar retailers did this we might be able to drag more margin back into the calendar space.

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Newsagency challenges

High Street Britain 2015 study should be done here

Plenty of press reports over the last couple of days about the UK parliamentary report into High Street Britain 2015. I can’t find a copy of the report anywhere online so I suspect it has not been released yet. The press reports suggest that some reporters have seen a draft copy. The most informed source I can find is the Retail Enterprise Network – they put in a submission on behalf of several interested parties including newsagents.

The High Street Britain 2015 study is as relevant for the UK as it is for Australia. In every city and town here Coles and Woolworths are increasing their take of retail sales, to the detriment of independently owned small retailers. Newsagents are suffering significantly. Coles and Woolworths provide a perception of better prices. Yet for all their buying might, their schemes like FlyBys (Coles) offer little or no reward. You’d need to spend over $3,000 to get a $5.00 reward with FlyBys (based on usual pricing and points) yet in my =newsagency you get a $5.00 reward after spending, on average, $60.00.

The regulators are letting the loyalty and other smoke and mirrors schemes of Coles and Woolworths play out unchecked while small businesses like newsagents face even tougher pressure. I wish the ACCC would require all businesses offering a loyalty program to note on EVERY RECEIPT the actual value of each point earned so that consumers are no longer kept in the dark about how valuable or useless each loyalty program is. This would shame Coles into building value into their FlyBys program.

Take a look at the latest Officeworks back to school catalogue. It offers exercise books for 1 cent. That’s nuts. It creates an expectation in consumer minds and opens their wallets. In the meantime, those wanting genuine service and product knowledge for other items come to newsagencies. The reality is that comparing like for like newsagents price compete with Officeworks. However, we do not have the multi million dollar Officeworks (Coles) advertising budget to get our pitch out.

Yeah, I’m rambling. My point is that these giants are using smoke and mirrors. Consumers flock to them. Suppliers have no choice but to support them. And in the meantime more independent small businesses shrink and close. Our economy suffers. Our community suppers.

The size of these giant corporations is no longer socially responsible.

The High Street Britain 2015 is expected to document the importance of independent small business retailers to the UK economy and UK society in a broader sense and to propose a course of action to arrest the situation.

I wish our politicians here would consider a study along the likes of that being undertaken in the UK. The closet thing we had was a Senate inquiry in 1999 and my recollection is that not one recommendation from that enquiry was acted upon. It seems that small business in this country has been cut adrift and only the Australian democrats seem interested in small business related policy.

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New magazine Star still struggling

Star is still struggling to make an impact in sales at newsagencies I check in with. It’s the weakest performer of the 2005 launches and receives the least publisher support for in store promotions. Creating strong promotions at this time of the year would have been ideal given that just about every other magazine is running on cruise control when it comes to point of purchase marketing. The folks at Star ought to have seized the opportunity and grabbed real-estate left with now old product.

Give me a reason to put the magazine on the counter, give the customers a reason to pick the product up – besides the cover story.

Star is not a great product so marketing effort is necessary to get retailers and consumers to take the next step.

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Pressure on Australia Post re Jetstar tickets

Good to see that pressure is mounting on the Australia Post / Jetstar for Australia Post to sell airline tickets.

For the sake of independently owned small business Australia Post has to be stopped. This government owned enterprise has no place selling Jetstar tickets. They’re a postal service first and foremost and the sooner the ministers responsible read the Act and bring Australia Post into line the better. No matter how generously one interprets the Act there is no provision for airline ticket sales nor the sale of picnic products, computer printers, general office supplies and many other things sold in their corporate PostShops.

For an update on the Australia Post / Jetstar story see e-Travel Blackboard.

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Habit and thin newspapers

Newspapers continue to be less than half their usual sizxe yet, on our neck of the woods, sales are as strong as ever. In fact, we’re 10% up on last Christmas/New Year. No matter how few pages included the habit of purchase drives sales. Newspaper publishers would do well to harness this loyalty – especially at this time of the year. Australians are uniqie when it comes to newspapers.

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News Corp intensifies focus on Internet opportunities

News Corp has announced the creation of a new position to oversee their Internet acquisitions. Paid Content says:

News Corp has appointed a 33-year old as the head of its Internet M&A strategy: it has appointed Jeremy Philips as exec VP responsible for executing Rupert Murdoch’s plan to increase the online presence of the media giant.
This position gives him formal responsibility for identifying takeover targets and negotiating acquisitions. FIM head Ross Levinsohn, who till now was actively involved in scoping out M&As, will now concentrate on running the online assets that the company has bought.

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The Bulletin sells out

My store sold out of The Bulletin this week – the edition featuring overage on the life and death of Kerry Packer so I checked with some colleagues and they had the same story. It’s the best selling issue in years. The coverage in the magazine was excellent. It was interesting to me that some customers were buying the magazine as a keepsake.

Footnote for those outside Australia: Kerry Packer controlled ACP Magazines – publisher of the Bulletin, publisher of many of Australia’s top selling magazines, the Nine TV network and a string of other businesses.

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News Corp, MySpace and blogging

An interesting lesson on censorship and blogging for News Corporation as documented by the New York Times today. While the spinners will pitch the story their way, the facts of what happened seem to speak for themselves. Buying MySpace is different to buying a newspaper or TV station. The name says it all. The teenagers who use MySpace see it as TheirSpace and any tampering will turn them off and alight bushfires across the Net.

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End of newsagents in the UK?

Plenty of reports in the UK over the weekend about the bleak future for small retailers like newsagents as a result of tough competition from supermarkets. See: Mirror, Times, Guardian and our own Sydney Morning Herald. In fact a Google search reveals 45 articles related to this story.

The situation is not much different here in Australia. Coles and Woolworths have a voracious appetite and are pursuing product categories which small business channels like newsagents need to survive. They move in, take the cream business and leave newsagents with some action but at a much higher cost. Take stationery for example. Supermarkets and their associated retail outlets now own stationery yet their customer service is appalling., Range is poor and prices are high despite the consumer perception that they are lower. a cheaper pen, for example, is not always cheaper once you consider how long it lasts and whether it is the right pen for the job.

The challenge for newsagents is to get a consistent superior quality and service message out to consumers. Another challenge, too, is whether politicians are prepared to legislate to protect small business against the appetite big business has for their customers. And by protecting small business, like newsagents, I mean protecting them from clone businesses as well as the supermarkets.

Newsagents are important culturally to Australia and losing them from towns and high streets would be a big blow to the community let alone the loss of an entrepreneurial breeding ground.

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Newsagency challenges

Publishers ruin New Years eve sales

News Ltd and Fairfax circulation experts around the country demonstrated their knowledge today by cutting back supplies such that many newsagents were sold out by mid morning. In NSW it was more News Ltd product affected whereas in Victoria it was more the Fairfax newspaper – The Age. In my own case I was sold out of The Age by 9:30 am and they had no spare stock anywhere to satisfy angry customers. Someone at The Age told me that one customer was so angry they had to send out someone to support the newsagent affected.

After all the efforts this year to boos newspaper sales it amazes me that publishers could be so stupid to burn consumer loyalty on a day like today.

The knock on effect on other categories in store was noticeable.

What publishers should have allowed for was the $32 million supre draw lottery tonight. Our lottery sales were up 400% so imagine what we could have done with papers if we had the stock.

Idiots!

PS. I received plenty of Herald Sun product from News Ltd but 20% was unsaleable because of poor production quality.

H A P P Y N E W Y E A R

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Newsagency challenges

Australia Post snubs consumers

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This is the government owned PostShop opposite my newsagents at Forest Hill in Victoria today. Closed. It is one of the benefits of government ownership that Australia Post is able to snub landlord requirements and set its won hours for its corporate shops.

On a day like today I suffer because Post draws people and with it closed there is less traffic.

When it really matters is late Thursday and Friday night. I am required to be open until the centre closes. Post closes at 5pm. If I could set my hours to match sales in my shop I’d add at least $500 a week to the bottom line of my business and it would be reasonable that the saving is reflected in our pricing. The rules Post operates under are further proof of the significant benefits of government ownership.

Post needs to decide if its in retail or not. If it serious about retail then anachronisms like the day off today need to stop.

The government has no business owning the PostShop retail network and competing with businesses like mine.

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Google move intrigues

Google has refined its Google base classified advertising offering. Now instead of passing you to the original content site for an ad, they gake you to a Google page. This may mean reduced traffic for the originator. More of the story: here.

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Media disruption

Creation versus science

We had a customer yell at us yesterday for putting Creation magazine in our science section. They were angry as hell saying that Creation was full of anti science garbage.

We placed Creation where the magazine distributor has asked us to place it. Also, we do not have a religious magazine area.

Having now looked at the magazine I can understand their concerns. This is not a science magazine even though it;’s dressed up to look like one. Creation is published by Answers in Genesis. From their website: Answers in Genesis is an apologetics (i.e., Christianity-defending) ministry, dedicated to enabling Christians to defend their faith, and to proclaim the gospel of Jesus Christ effectively.

I have no issue with the publication of this magazine. However, they need to use a more appropriate cover so the purpose of the magazine is clearer. They also need to provide better direction as to where the magazine ought be placed on newsagent shelves.

The world has become confused enough with the whole Intelligent Design versus Evolution discussion. I don’t need to add to that on the shelves of my store.

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Kerry Packer

Newsagents are certain to reflect on the passing of Kerry Packer as they trade today. His influence over their businesses was considerable.

His companies published our most successful magazines (Australian Women’s Weekly, Woman’s Day, TV Week, NW, Madison, Real Living, Take 5) and distributed many many others. There was not a day that would pass without contact between a newsagent and a Kerry Packer owned company.

As newsagents sell their newspapers today carrying Kerry Packer as front page news, some will hope for a happier relationship with his companies, others will worry that with his passing goes a support from within his companies for small business newsagents. While in recent times Packer companies have made some decisions which have hurt newsagents, they have, overall been very supportive of the channel – actively investing in marketing strategies designed to help newsagents compete with supermarkets and others moving into the magazine space. Indeed there are stories of Kerry Packer personally intervening and reversing at least one decision by his management team which would have hurt newsagents.

Publishing needs more people who have grown up with and have an affinity for “the business”. Kerry Packer was unique and I reckon newsagents will miss his influence.

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Newsagency challenges

It’s official, calendars are stuffed

In the days leading up to Christmas several times I heard customers in my shop comment to each other that they should hold off buying calendars because they’ll be half price after Christmas. The same comments were being made in stores around the country. Early discounters marked calendars down by 25% to 25% from November. That is what newsagents would usually mark them down to right after Christmas. The damage done to consumer perception about the price of calendars by discounters like Big W (Woolworths) and others we have to come out of Christmas Day at 50% off and then go to 60% from New Years Day.

Calendar publishers and retailers who rely on calendar revenue will need to take a very different approach to the 2006/07 season. We need strategies which take us out of the discount marketplace, strategies which result in a product/service mix which allows a premium price and which the discounters are less likely to follow.

Something must be done because left as is, there is no point in my newsagency and thousands like mine being =in the calendar space.

The only comfort I have is that Calendar Club and other similar specialist offerings are, anecdotally and off the record, making similar negative mutterings.

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Newsagency challenges

Magazines at risk because of bird flu and anti terrorism legislation?

As a result of the raft of recent legislation and global events:

Explode magazine has been removed from sale because of the new anti terrorism laws recently passed.

Capture magazine has been removed from the shelves because of the new anti terrorism laws recently passed.

Time magazine has been removed as a result of the new Industrial Relations laws. There is no time any more.

The Bombers magazine is being removed because of a fear it will incite terrorism.

The Magpies magazine has been struck by bird flu. Indeed all bird magazines are being removed because of fears over bird flu.

The Saints magazine has been removed because of concerns it encourages religious vilification.

The ashes magazine has been removed out of respect for the dead.

PC User has been removed for drug connotations.

New Idea has been removed as a result of the new literacy policy in education. There is no room for creativity.

Who has been removed because of the new terrorism legislation. It’s unsafe to ask such questions.

Take 5 has been nominated the official workplace reform magazine because five minutes lunch is the preferred lunch break time.

Family Circle is being renamed 50 50 circle in response to the new 50/50 split of parenting being forced on the Family Court.

People’s Friend is being renamed persons of interest since the government prefers this to friends.

All 150 shooting, hunting, military, war and weapons magazines are being removed because selling them is sure to land the newsagent in some legal trouble.

All Oprah magazines have been removed because of overexposure.

Dissent is banned because of the new sedition laws.

All Martha Stewart magazines are being removed because the promote unhealthy corporate behavior.

Okay so I made the list up – with apologies to some recent emails going around. Good for a laugh.

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Thre relevance of newspapers for advertising

We launched a new online business four months ago. We set out to create a sustainable business focusing on one category of product and with our entire marketing spend to be focused online. Four months on, our monthly marketing spend as a ratio of sales is falling nicely, repeat business is growing and new customers are landing on our website each day as a result of effective keyword advertising partnerships. We could not have achieved anywhere near the same result through advertising in more traditional media of newspapers, radio and TV. This is why newspaper publishers are reinventing themselves. It is also why newsagents need to reposition themselves. Our online experience is helping refocus our retail newsagency so that it is more relevent for the over the counter opportunity.

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Newsagency challenges