This is a guest post from Dan Walsh, an Account Executive at Racepoint Group. Follow him on Twitter @DanWalshed.
“If you ever watch somebody reading a copy of Vanity Fair, they spend as much time looking at the ads as they spend looking at the content,” Mr. Grueskin said, “because the ads are actually useful for readers.” (Ads having value on their own, he added, is “something that we as journalists have a hard time getting our heads around.”)
- From NYT’s “For Journalists, A Call to Rethink Their Online Models”
I’m curious about what others think of that statement.
Clearly the goal has always been for ads to be useful (hence the importance of targeting – why would anyone pay attention to an irrelevant ad?) but I’ve rarely considered them to be valuable. As users, we’ve been conditioned to avoid looking at the tops and sides of pages and sponsored links. Simply put, the current advertising model is broken and showing an increasing number of cracks as time goes by.
When BusinessWeek blew up their newsroom in 2009, it was interesting to see Senior Writer Steve Hamm wind up at IBM as a communications strategist. It certainly wasn’t a move that I expected. In Steve’s words, “I work on communications strategy and create content.” Most of that content winds up here: IBM’s A Smarter Planet Blog. If you haven’t checked it out before, it’s worth a look – there’s been a ton of thought provoking posts generated here over the last 2+ years. To me, this is what passes for “valuable” ad content.
In the future I think we’ll see this type of content integrated into a number of news sites. If done right (read: not overtly promotional), brands can help fill the gap in long-form journalism created, in part, by Google News (need to be first!) and the current ad model (low CPMs result in pressure to “get more page views” leading to a struggle over writing for quality vs. writing for quantity).
Of course not every brand can go and hire a former BusinessWeek writer to head up this effort, but don’t worry: PR practitioners would be more than happy to fill that role.
On Tuesday the Publishers Information Bureau released its 2009 year-end magazine advertising report. Not surprisingly the report revealed that ad pages during the Media Meltdown of 2009 were down 25.6 percent for the industry, while estimated revenues closed at $19.45 billion, a drop of 18.1 percent.
Compare this with the 11.7 percent in ad pages that dropped from 2007 – 2008 and the 17.5% percent drop in revenue during that time period.
Looking closer at key news and business magazines (the ones that still remain in print and open for business), it was a dreadful year in revenues and lost ad pages for their print businesses. BusinessWeek, which changed hands to Bloomberg’s control in 2009, was one of the biggest losers in-terms of ad pages for business magazines with a 33% drop-off. U.S News, which cut back on print to bi-weekly and then monthly in 2009, was the biggest loser in ad pages for “news magazines” with an 81% drop. Newsweek, which tried to become more like the Economist to push off its eventual death, dropped 25% in ad pages. This was worse than its 19% ad page drop as a true “news weekly” in 2008, but alas it was also during a far worse market.
Forbes more than doubled its ad page drop, increasing to 30% in 2009 from a 14% drop in 2008. Fortune had an even worse year as it prepares to shrink the number of issues it releases down from 25 to 18 in 2010. While its ad pages were nearly even between 2007 and 2008, it witnessed a 36% drop in ad pages for 2009.
The Economist, which somehow managed to actually grow ad pages by 4.4% in 2008, wasn’t immune this year either. Its ad pages dropped more than 20% as well in 2009.
All of this is very interesting, but the larger question is how long will these numbers even matter? 2010 will undoubtedly be the year that the pay-wall returns to Internet and larger revenue percentages shift from print to online. Soon the numbers here will only be a footnote, or perhaps non-existent, as print operations cease across the industry. So how will we calculate? Digital eReader ad pages anybody?
As any PR or marketing practitioner knows, it’s all in the messaging. Disneyland is not merely an amusement park, but “the happiest place on earth;” Visa is not just a credit card, “it’s everywhere you want to be;” and now thanks to a new ad campaign Nutella is no longer just a delicious, chocolate treat, it’s “what mom’s use to get their kids to eat healthy foods.”
Excuse me? Did I hear that correctly? Nutella is marketing itself as the secret weapon in feeding children a healthy breakfast?
If you haven’t seen this new commercial, the short spot shows a mother describing to what we presume is other mothers, how she gets her children to eat healthy by spreading Nutella on foods they would otherwise push away. The advertisement gives the impression that Nutella is in fact the key ingredient to serving up a nutritious breakfast.
The ad even goes so far as to describe Nutella as a hazelnut spread with a “hint of cocoa.” Have you seen the jar? It’s full of chocolate deliciousness.
By visually positioning the Nutella jar next to pieces of whole wheat bread (repeatedly) and scripting a commercial to highlight the importance of a healthy breakfast, it would be easy for a consumer to ingest this advertisement and walk away with the exciting, new belief that Nutella is in fact a health food, all because of the messaging.
It seems the folks at Nutella have headed Fine’s advice. One clear message (Nutella is healthy), over and over and over again.
Why market Nutella as healthy instead of the decadent spread it really is? Because we have an obesity problem in this country and rather than add to the problem, Nutella wants to showcase itself as part of the solution.
In a recent PR Week article describing the vital importance of a direct, clear messaging (in this case for President Obama) Howard Opinsky, EVP for Powell Tate stated, “You must be offering suggestions, offering solutions, being clear about your position and the value your products and services bring to the nation.”
While Opinsky made that comment in a discussion about the importance of messaging for the President, the same holds true for consumer products. How do you become part of a solution to a problem, thereby appearing more valuable? And furthermore, how do you convince consumers that value-add is worth spending money on?
The marketers at Nutella knew that positioning themselves as a dessert product was not going to move the sales needle as well as positioning themselves as part of a healthier America.
Following its recent sale to Bloomberg, BusinessWeek reporters have probably felt like they’re living through the movie Office Space. According to The Wall Street Journal, “Over the last few weeks, Bloomberg has been asking BusinessWeek editorial staff members to submit resumes, news clips and 250-word statements about their personal qualifications to their new bosses.”
After all of that effort, approximately 100 employees will not be joining the publication as it transitions to Bloomberg. Steve Baker describes the scene at BusinessWeek in his personal blog: “Today is a wrenching day to be in our offices. People troop upstairs and come back carrying different kinds of envelopes.”
Below is a list of talented reporters, writers and editors that will not be working with BusinessWeek as of the end of November (cuts began occurring this morning).
Update (4:50pm): Stephanie Clifford of the Times has linked back to us (thanks for the shout out) and quoted an anonymous insider from BW who thinks the magazine is cutting the bigger voices of the magazine for a reason:
“Every indication we have from Bloomberg people is their model is The Economist, which has a singular voice, not multiple voices.”
Update (11/24, 4:15pm): John A. Byrne, Editor-in-Chief of BusinessWeek.com will not be staying with BusinessWeek as it transitions to Bloomberg. Instead, he will be launching his own digital media company in San Francisco.
At 37, Josh Tyrangiel has quickly worked his way up the journalistic ranks. Today, he becomes the first editor of the Bloomberg-run BusinessWeek. Most recently serving as editor of TIME.com and deputy managing editor of TIME , he was thought to be by many as the heir apparent to Richard Stengel.
The move shouldn’t come as a total shocker given that Norman Pearlstine, Bloomberg’ chief content officer, formerly looked over Tyrangiel’s work as editor-in-chief of Time Inc. We’ve also heard that Jim Kelly, TIME’s former managing editor has been sitting in on the Bloomberg editorial meetings with other former TIME Inc. staff.
Given Tyrangiel’s success with TIME.com, he recently worked with Peter Ha in launching Techland and also boosted the Web site’s traffic to what some expect will be 1.8 billion page views this year, the move is also a show of support for John Byrne who has been driving BusinessWeek.com’s growth and was retained by Bloomberg. Tyrangiel made TIME.com a top consumer, multimedia portal: tying text, audio, pictures and video together with an integrated approach. One of BusinessWeek.com’s top revenue drivers in the past has been ad-supported slides shows – which will likely increase 10-fold (while becoming more interactive) under Tyrangiel’s watch. And judging by the video embedded above, he articulated this approach to his managers and “troops” in a way that resonated.
In addition, if Bloomberg’s goal is to reach a broader consumer audience, beyond Wall Street, with the magazine – Tyrangiel’s non-business background will come into play. He’s a music-critic at heart (not an economist or someone with a Wall Street background), who sat down with music luminaries such as Bono and Kanye West for cover stories, during his time at Rolling Stone.
One of Tyrangiel’s first challenges will be assessing if he can save Business Exchange, BusinessWeek’s information-sharing, social network. According to previous reports, the company has sunk $16 million into the site over the last two years, while drawing only 1.5 million page views on average per month and bringing in $600,000 in revenue last year.
As I alluded to yesterday, Bloomberg L.P. and McGraw-Hill have come to an agreement on the acquisition of BusinessWeek.
In a likely sign of things to come, the deal was broken on the Bloomberg wire yesterday evening, with an in-depth report following on BusinessWeek.com. As of now, it looks like BusinessWeek and BW.com will remain their own brands, with layoffs not occurring until the deal closes in December.
Here’s the full memo to BusinessWeek staff from the magazine’s publisher, Keith Fox:
All,
Moments ago, McGraw-Hill announced that Bloomberg L.P. has agreed to acquire BusinessWeek. This is exciting news on many levels. Joining forces with another of the world’s leading news organizations enhances BusinessWeek’s ability to further serve our global audience and our valued customers. And Bloomberg will gain a powerful brand with a history of editorial excellence and strong reach among business professionals.
While the ink is barely dry and the long-term plans are being worked out, we do know that Bloomberg is committed to and values our brand, our editorial integrity, and our ability to drive advertising, circulation, and new digital revenue.
BusinessWeek will strengthen Bloomberg’s online, television and mobile products and creates an opportunity for Bloomberg News to reach decision makers in the c-suite. Online, BusinessWeek.com and Bloomberg.com will have more unique visitors than any non-portal business and financial site. In addition, Bloomberg expects to build television content around the powerful BusinessWeek brand and our world-class journalists.
I am tremendously proud of the work all of you have done in the past few months. Despite the uncertainty, we have continued to produce first-class products for our readers and advertisers, and I want to thank you deeply for your efforts. I also want to thank Steve Adler, Jessica Sibley, Tania Secor, Roger Neal, and Linda Brennan, for their extraordinary ability to personify the best of BusinessWeek during the deal process while leading their respective organizations.
I know that while this announcement answers some of the questions you’ve been asking over the past few months, it raises others. The sale is expected to close by the end of the year and we will be working on transition plans in the coming weeks. I can tell you that all BusinessWeek staffers will remain employees of The McGraw-Hill Companies until the transaction closes, and that it will be business as usual–producing the magazine and the website, and serving our advertisers–through the close. We will give you more details when we can.
We’ll be holding a town hall meeting later today at 5:45 EST, after which a Q&A will be provided to all employees; you will receive more details shortly. A call for the Asia teams will be scheduled shortly.
Again, I want to thank you all for your professionalism and dedication during a challenging time. I look forward to working with you on the promising next chapter in BusinessWeek’s history.
“That an announcement regarding the sale of BusinessWeek is expected within the next few days, say executives familiar with the situation.”
Shira Ovide of the Wall Street Journal echoed Lowry today by quoting sources close to the negotiations:
“Bloomberg LP, is likely to emerge as the buyer, according to people with knowledge of the talks.”
Ovide also foreshadowed what could be widespread layoffs for BusinessWeek staffers once a prospective deal is finalized:
“Relatively little money is expected to change hands in any sale. The people said final-stage negotiations have focused less on the purchase price than on whether McGraw-Hill or the new owner would be responsible for paying severance to the BusinessWeek staffers expected to lose their jobs after a sale.”
We’ve heard rumors about plans to cut BusinessWeek staff by 20% for some time and it appears that the sale would make large cuts a reality according to Rafat Ali, who has been following the BusinessWeek bidding closely for PaidContent.org.
“Bloomberg already has the machinery running, ” noted Ali to RaceTalk. “I think maybe they will retain some big name columnists and investigative reporters but the rest will be disposed of.”
Ali, like other media outlets, speculates that most of the cuts will be on the print side of the operation, although he doesn’t believe all Web positions are safe.
“Print for obvious reasons will see most of the layoffs and I expect we’ll see the Web staff – not the Website – merged with Bloomberg.com, so some layoffs there as well,” he added.
However, contrary to some other industry pundits, he doesn’t believe Bloomberg can simply swap in writers from Bloomberg Markets Magazine.
“Some replacements will come from Bloomberg Markets Magazine, although both are different mags. ‘Markets’ is more for financial profession and BusinessWeek is more for the general business reader,” he concluded.
As I’ve mentioned before: despite the digital evolution of media, a positive story in one of the incumbent business outlets (Forbes, Fortune, BusinessWeek, etc.) can still provide major value to companies (at least for now).
The latest findings, from the Magazine Publishers of America, noted that ad pages were down across the board for business magazines Jan – March 2009:
BusinessWeek - Down 39%
Fortune - Down 26%
Forbes - Down 15%
What does this mean to companies looking to get in the editorial pages? Less ad pages means less editorial pages for writers and editors to fill up. It also means (although no one would ever admit it) that large companies with advertising budgets are getting even more of the ear of writers and editors. Yes, there is still a wall between church and state (advertising vs. editorial), but there’s no doubt parts of it are crumbling down.
While their pages vanish, so does some of their readership. Not one of the aforementioned publications reaches over 1 million print subscribers (End of 2008 data) and their online sites compete with established online outlets and new up-and-comers.
Fortune: 831, 485 print circulation; 5.9 million UV’s per month through CNNMoney.com according to ComScore
Forbes 890, 882 print circulation; 4.6 million UV’s per month according to ComScore
How does that compare with online competitors? While ComScore actually has thestreet.com tallying more unique views than Businessweek.com per month, Compete.com has businessweek.com still outpacing thestreet.com (embedded above). Other up-and-coming sites like thebigmoney.com and businessinsider.com tally 260, 295 and 911,373 respectively in UV’s per month according to Compete.
While the disconnect in the numbers from ComScore and Compete makes it hard to validate any of this, no one will argue that free-based, online business outlets are growing in readership, while print business outlets are being forced to shift their content online to a similar-sized audience.
So what does this mean to PR folk pitching client business stories? Do your research and educate your clients on today’s business media landscape. While the big name publications from the early 1900′s still carry clout, they don’t necessarily have the impact / reach that they used to have. The biggest upside in landing a story there may be that other journalists (excluding generation Y’ers) still look up to them; and may be inclined to follow their lead with future stories / follow-ups.
