The Future of Print

Media company as agency: a trend long overdue? | Econsultancy

Posted in Boom by futureofprint on April 28, 2010

Competition is always tough amongst ad agencies. And soon it may get even tougher. That’s because media companies are moving in on agency territory.

In an article discussing Conde Nast’s new creative services offering, AdAge’s Brian Steinberg points out that “no one can really say they corner the market on how to make things work in paid search, social media, or mobile marketing.” So some media companies are likely to follow Conde Nast’s lead in taking advantage of their unique positions to expand their relationships with marketers, and, they hope, their bottom lines.

For Conde Nast, the decision to move into agency territory was a no brainer. Drew Schutte, the company’s Chief Revenue Officer, explained to AdAge: Last year we were doing over 30 custom programs per quarter, and now we’re doing 50, and often people were asking us, “I have this other thing I need you to do.” And we had to pass on it. So we thought, “Why are we turning them away?”

via Media company as agency: a trend long overdue? | Econsultancy.

More Upbeat News: Moody’s Removes Negative Outlook on Newspapers

Posted in Boom by futureofprint on April 19, 2010

CHICAGO Moody’s Investors Service — the big credit agency firm that over the past 18 months cut its ratings of nearly all newspaper publisher to junk levels — said Friday it had changed its sector outlook for U.S. newspapers to stable, from negative.

Moody’s said it expects newspaper advertising to recover well by the start of 2011, but cautioned that it still believes the industry faces long-term problems that might result in another negative outlook. And ratings upgrades for individual companies are not a given, the firm said.

“The change to a stable outlook reflects Moody’s expectation that acyclical recovery in advertising spending will moderate newspaper revenue declines as 2010 progresses and lead to a more stable revenue environment in 2011,” senior analyst John E. Puchallawrote in a note to investors. “Moody’s anticipates that newspaper advertising revenue will decline in an 5% to 10% range in 2010, but that revenue should be closer to flat toward the end of the year and in a -3% to +2% range in 2011.”

via More Upbeat News: Moody’s Removes Negative Outlook on Newspapers.

The Amazing Media Habits of 8-18 Year Olds

Posted in Doom by futureofprint on April 12, 2010

The Kaiser Family Foundation did just that in a comprehensive survey released in January. Kaiser surveyed more than 2,000 families, and turned up all sorts of interesting information about the media habits of 8-18 year olds.

Some key points:

Kids consume a hell of a lot of media–and more all the time. Basically, if kids are awake, they’re consuming media. And, increasingly, they’re consuming multiple forms of media at the same time.

Kids’ print media consumption is tiny and falling. Kids’ digital media consumption is going through the roof.

No big surprise there. What is a surprise is how little parents seem to care about this. Or, alternatively, how much parents encourage this media consumption by consuming a huge amount of media themselves.

In 2/3 of households, TVs are on during meals

In 75% of households, TVs are on when no one is watching them.

More than 70% of kids have TVs in their bedrooms

Only 1/3 of households have media-consumption rules

via The Amazing Media Habits of 8-18 Year Olds.

Here Is Why The iPad Won’t Save The Magazine Industry

Posted in Doom by futureofprint on April 6, 2010

Magazine industry advertising revenue declined an average of 12% the past 2 years (18% in 2009) so most magazines need to reverse revenue declines while managing costs or face the real prospect of going out of business if the bleeding continues.

Some believe the iPad will enable magazines to reverse course in the near-term, but we believe these expectations are way off the mark.  In particular:

  • It’s going to be years for mobile ad revenue to become material.
  • As a result, in the near-term magazines will need to look to subscription revenue to drive incremental profits.
  • But, even if iPad sales wildly exceed expectations and users rush to purchase lots of magazine subscriptions (we don’t think they will), this will not be enough to drive meaningful revenue at most magazines.

EVEN IF IPADS FLY OFF THE SHELVES MAGAZINES WILL STILL ONLY REALIZE A SMALL PERCENT OF THEIR OVERALL PRINT REVENUE

Just like the internet hasn’t turned into a material business for most print magazines, neither will the iPad in the near-term.

We crunched some numbers using the following assumptions:

  • iPad owners are early-adopters that consume a lot of content so let’s say 50% of them subscribe to two iPad magazines each.
  • Magazine subscriptions on the iPad are higher than print subscriptions (most magazines plan to charge more initially), so assume an average $15 per monthly subscription.

Even if iPad sales soar past expectations and reach, say, 16 million units over the next two years total magazine subscription revenue would equal about $2.8 billion per year under the above case scenario.  That’s less than 30% of annual circulation revenue for the entire magazine industry and only about 10% of overall industry revenue (circulation + advertising).

Here is a summary our analysis, accounting for a number of different scenarios using the same assumptions mentioned above:

ipad mag stuff

Here Is Why The iPad Won’t Save The Magazine Industry.

Promotional Dollars Continue Shift To Digital 04/05/2010

Posted in Doom by futureofprint on April 5, 2010

Consulting and research group Outsell surveyed over 1,000 advertisers and marketers in December. The company found that $119.6 billion, or 32.5% of the planned 2010 U.S. ad spending of $368 billion, is destined for digital media. The 30.3% going to print advertising is lower by more than $8 billion.Granted, these are only predictions — but this tipping point has been predicted for some time. It is now a matter of when, not if. Even in the tough economic climate, digital remains the one area of aggressive budgetary increases.

Econsultancy and ExactTarget recently released Marketing Budgets 2010: Effectiveness, Measurements and Allocation Report. While only 46% of the surveyed 1,000 marketers planned to increase their overall budgets, 66% were upping digital spending. This relationship held on the decreasing end, too: 13% were cutting overall budgets, but only 4% said they planned to curtail digital spending.

The money is apparently not just going online, it is staying there.

via MediaPost Publications Promotional Dollars Continue Shift To Digital 04/05/2010.