Sunday, July 31, 2005
Access to prior issues of their briefings
Online newspaper experience of The Scotsman and others
Boston print buyers newsletter (this one is about reluctance to take small orders, and hence a sign of our weakness, and the exact opening that Vistaprint and others exploit)... please note that this is the tip for 8/1/2005, and it will change. The newsletter is worth subscribing to...
Friday, July 29, 2005
Revised GDP Data: "What 2001 Recession?"
Profit Laggards Unmasked
Bob Rosen brought this to my attention a few years ago. I didn't believe it then until I calculated it myself.
When reading the PIA release, it's easy to say that for 2004, profit leaders were almost 4x more profitable than the average printer (9.4% vs. 2.5%; the actual difference is 3.76x). But the real calculation is the difference between profit leaders and "laggards." It's really 47x! (9.4% vs. 0.2%).
All data are from the PIA release except for the column in yellow, which are the result of my calculations using the PIA data.
Merrill Lynch says a "media malaise" has descended upon traditional advertising, and says there is a lot of downside risk
Print media buyer news
TV Guide, the latest e-media victim, cuts circulation by two-thirds, changes format
Text messaging catching on across all age groups
Record number of teens online
Shortage of online journalists?
Whitewash? Trade association American Business Media trumpets ad revenue growth, but you can't find news about the decline in ad pages in their release. It always pays to look at the data and decide for yourself. No one is helped by putting a smiley face on stuff when they can see a bump under the rug where the real situation has been swept.
The release: http://www.americanbusinessmedia.com/abm/NewsBot.asp?MODE=VIEW&ID=108&SnID=739704673
The data: http://americanbusinessmedia.com/images/abm/pdfs/resources/BIN/BIN_MAY_2005.pdf
Yahoo! as the next media giant
Wednesday, July 27, 2005
NAA, Others Miss the Point...
But it reminded me that people are missing the point. Newspapers will not be replaced. They will be rendered irrelevant over a long period of time. That is, each benefit that one gets from a newspaper will be supplied by a range of other things. eBay did not decide to kill the newspaper classified business directly, but it eats away at the use of classifieds, slowly. Each part of the newspaper is undermined by not one thing, but by many things. Why someone would want to "replace" a newspaper is beyond me. The market needs that are addressed by newspapers today are different than those of 50 years ago. But no one is in danger of picking up Tuesday's newspaper which is on newsprint, and then going to the newsstand on Wednesday and finding an electronic screen in the spot Tuesday's was. No, the newspaper as a consolidator of information is what will be disaggregated into many information alternatives and formats.
Let us not forget that newspaper owners are among the biggest investors in technologies that compete with newspapers: other publishers, broadcasters, web sites, and others, with more investments to come. Often the whining about the future of the newspaper is the whining of a division of a conglomerate that has other divisions cheering at the very same moment.
Thursday, July 21, 2005
One problem: it's addressed to me at the business I sold more than four years ago. Was it worth it? Could it have missed its target using a static piece for less money? Does the extra cost of personalization get paid for by increased response? I don't know if anyone has the definitive answer to these questions. Though I wonder; if it was as good as people claim it is, I would see more of these kinds of mailings, and more of the equipment capable of doing it would be being sold.
I still have not receieved a 1:1 piece that is not a credit card statement or affinity program statement that is accurate, ever.
Wednesday, July 20, 2005
Flint Ink Sold
It's hard to coordinate cross-media, of course, but to not have it on the company web sites? Sheesh!
Anyway, why Flint was denying it was for sale but was "in a number of discussions" was beyond me. Everyone knows what "in a number of discussions" just like we do "pursuing strategic alternatives means." I wrote about it in my blog posting of May 18 as part of a "non-denial denial." Ah, English... it helps you say what you don't mean and still mean it.
Tuesday, July 19, 2005
Today's Other Hot Articles
E-commerce up 24% last year (excluding travel), and is now 5% of retail sales
Top executives are now blogging
They're going to deny it, but it sounds like International Paper is having a fire sale. Of course, the funniest part to me is the sale of timberlands, which some government will buy at the urging of environmental groups, when these lands will be much cheaper in a few years as recycling grows and use of e-media become more commonplace.
Personal note: Ed Merkel, longtime Heidelberg executive, died at 85 on July 5th. Ed was instrumental in my career. If anyone would like to contact Betty Merkel, please send me an e-mail.
More E-Paper News
DuPoint-Teijin: http://www.dupontteijinfilms.com/ (not a very informative site)
Paisley University Thin Film Centre: http://www.thinfilmcentre.co.uk/
Plastic Logic: http://www.plasticlogic.com/
Thursday, July 14, 2005
I bring this up because I saw a Denver Post article today about A.B. Hirschfeld Press Inc. of Denver. A few items interested me. "The proposed transaction calls for the merger of A.B. Hirschfeld, National Printing and Packaging Co., digital printer C&M Press LLC and printing software firm OSI6 LLC, all based in Denver," the article states. Ummm... wait a second... a traditional company merging with a digital firm and a printing software firm. This is not the consolidation of printing companies one typically thinks of. None of these companies are similar, and they bring different skills to the party (that doesn't mean they can easily integrate them, but they are on the right track in my mind).
The article degenerates, however, with the usual "There's massive over-capacity in the printing industry," quoting the owner. Yeah, like a single merger will affect industry capacity. So on one hand, this is a creative approach, but we're given the usual uncreative drivel at the end. The comment ignores that print's role has changed because of Internet competition, and yesterday's announcement by Fujitsu means that competition will be coming from other quarters as well. Overcapacity is meaningless. Marketable capacity is the only thing that matters, and has little to do with equipment, and that's hard to understand concept for some executives, even those who were profitable for years when people were complaining about capacity as well. (It's also funny to see the remark that digital printing is more profitable than traditional printing, which would make no sense, as digital printing has added to industry capacity, and should have the effect of depressing market prices even more).
Amidst the complaints about overcapacity, the company is planning to invest in China, according to the Rocky Mountain News version. That is a great move, and more printing companies should do it, but it's a reminder of yet another aspect of the capacity discussion. How do we measure it? Nowadays we have to measure it worldwide, that is, if measuring capacity even matters.
Don't Get So Excited About Ad Pages Going Up
Wednesday, July 13, 2005
Three Interesting Articles Today
Good commentary in Advertising Age about disintermediation in the publishing business (another "hey, wake up" article), and about all marketers who should fear becoming "irrelevant"
College bookstores pushing e-books
USPS starts address correction service (do you think that any e-mail service will offer this? I doubt it).
E-Paper Breakthrough-- Will E-Paper's Arrival Be Sooner Than We Think?
Macworld Boston -- Still Disappointing, But Less So
An interesting product shown was at ThinkFree. The company was one of those overfunded Internet companies from long ago that has survived in smaller form. They have a decent office suite for those who don't need exotic bells & whistles. It has superb compatibility with MS Office. They have a product that allows putting Powerpoint presentations on iPods or other MP3 players and you can then hook the iPod to a projector. The release is at http://www.thinkfree.com/whatsnew_con.jsp?seq=120
They also have an on-line version of their suite that allows you to work on files online and save them in a free secure 30mb space on their servers. You don't even need to have office suite software on your computer. (they tried this before, but without broadband it really stinks; broadband changes everything, and here's another case of it). It has a feature to post live documents as part of your blog as well, and I'll use it here sometime soon (I experimented, didn't like the results, but it was the settings I chose). The suite is just $49 but you get a 30-day free trial by downloading. You can use the online service for free-- just sign up for a free account at http://online.thinkfree.com/index.jsp. There are some Internet software discounters selling ThinkFree for $10-15; beware... it's version 2.3 and not the latest version.
The on-line version of the company was the original intent with the "ASP" craze how no one would have software but use browsers for everything. The investors would get rich from banner ads that would be up as people were using the elements of the suites. That thinking is so '90s. :)) It's not their thinking now; they'll use the online version to sell suites and sell upgrades to greater server space, and other products and services, etc. Their press kit was a bit disappointing, showing examples of how well it handles MS Office files, but then dumping on OpenOffice with examples of bad conversions by that product. I've been using the beta of OpenOffice 2.0 and it's been great: the presentation program is greatly improved. I'm considering switching totally to it when it is released as StarOffice 8.0. I thought ThinkFree's positioning against OpenOffice was interesting. Since the company is Asian in ownership, they see far more Linux and open source software, of which OpenOffice has emerged as the most important full-featured suite, having far greater penetration than in the U.S, or Europe. This doesn't mean I won't buy ThinkFree, which I will, because as a software geek I buy everything and find all kinds of little things that some products do better than others (like this blog feature in TF3.0). But the shots at OpenOffice are done without recognizing OO features that TF doesn't have.
Download the latest OpenOffice beta at http://download.openoffice.org/680/index.html
The keynoter on Tuesday was columnist Andy Ihnatko. I had never heard of him, so obviously I never heard him speak. He was superb. His Chicago Sun-Times columns can be accessed at http://www.suntimes.com/index/worktech.html and his blog is at http://www.cwob.com/yellowtext/
All in all, despite being a PC user, I survived, and no one suspected that I was not one of the Mac-ians. Last year's show was a disaster, but this was far better run in a more appropriate location. Maybe, one day, Apple will come back and exhibit.
Last year I went undercover by wearing a t-shirt that said "Macintosh for Productivity, Palm for Mobility, Linux for Development, and Windows for Solitaire." Always a hit with the crowd. I got stopped a few times in Busch Gardens in Williamsburg a few years ago with people who wanted to take pictures of it. Got it at MacWorld NY 2001, and I forgot what vendor it was. I didn't see it at the show. Strangely, it was funny how much stuff at Macworld works on Windows, and how often I saw the word "Linux" there.
Monday, July 11, 2005
Just What We Need: E-Mail Prices Getting Lower
Take the data with a grain of salt: these are list prices. Just like magazine space rates, on which the Publishers Information Bureau data are based, everything is negotiable for the right situations.
Effectiveness of e-mail has stabilized, and deliverability is getting better. From the data I've seen, they can even lower their prices should competition with other media get more intense.
Sunday, July 10, 2005
Articles of Interest
FCC reports broadband connections in 2004 went up by 34%
Full report, including press release and statistics: http://www.fcc.gov/Bureaus/Common_Carrier/Reports/FCC-State_Link/IAD/hspd0705.pdf
The Direct Marketing Association issued its report about media integration (cross media, multichannel marketing, whatever else you want to call it)
Press release: http://www.the-dma.org/cgi/dispannouncements?article=328
Advertisers looking for new ways to reach their target markets
Newspaper readers shifting to the Internet
Why can’t marketing and sales departments get along?
Bigfoot Interactive e-mail delivery report
Press release: http://www.bigfootinteractive.com/site/pressroom/press_releases/pr2005/pr-06-27-05.htm
Friday, July 08, 2005
Does Computer Spending Really Matter?
As I researched the printing business, I thought it was quite funny how the most profitable printers were the ones often considered to be the most neanderthal when it came to computing. I was always taught that bad information systems once computerized became worse or deadly. Good management made a real difference.
When studying the lack of MIS investment in the printing business, it became clear to me that printers could not "see" the benefits of MIS because they always had a sense that they could make certain tweaks in their business that would yield better results. This would range from getting a more modern press to finding a hot sales rep or cutting waste and spoilage. Indeed, printers would see tangible and quick results from implementing total quality management programs (TQM), even if these approaches were not fully implemented. How one could think that an industry that can't make money because of "overcapacity" (whatever that is) could suddenly justify having "overcapacity and MIS systems" just seemed beyond thought. We know, or at least people who agree with me know, overcapacity doesn't matter. Good management does. Good management with good tools matters even more.
Finally, some proof from international consulting organization McKinsey. (If it doesn't come from a big consulting outfit, it's not true, supposedly).
"...a study of 100 manufacturing companies in France, Germany, the United Kingdom, and the United States found that IT investments have little impact unless they are accompanied by first-rate management practices, which, by contrast, can boost productivity on their own. We rated companies on how well they used three important management practices: lean manufacturing, which cuts waste in the production process; performance management, which sets clear goals and rewards employees who reach them; and talent management, which attracts and develops high-caliber people. The companies that had the highest marks in these areas became more productive, with or without higher spending on IT. Those that combined good management practices with IT investments did best of all."
What a surprise :)
Who Are the Print Buyers?
It made me remember a discussion I've had countless times that printers don't call high enough in organizations. This is one reason why it's really important that presidents and high level executives are active with other high-level executives of print-consuming organizations, totally outside of selling situations. This is what marketing is all about. Getting out of the stereotypical "here's our equipment list, can we bid on your next job" mode starts at the top. It's better to have strategic discussions with marketing directors about their long term plans than it is to call on lower-tier positions alone. Good sales people know people multiple levels up and below their key contacts, and work those levels regularly. As long as print sales people are paid on high commission programs, shop owners should never expect deep, proactive relationships with clients and prospects.
Today's Employment Report, Better than the News Reports
Payroll growth was strongest in non-manufacturing (gee, what a surprise).
What won't be reported: the household survey +163,000.
Net new business up slightly, still at highest levels since I've been watching it.
More in my July 15 WTT column...
Wednesday, July 06, 2005
ISM Non-manufacturing Index Up, Even Its Employment Component
As manufacturers downsize, they outsource to service businesses for a wide range of tasks that they used to do internally. These also play havoc with the way the government tracks manufacturing. Got a cafeteria? Bring in an outside firm to run it. Those cafeteria workers used to be manufacturing employees. Now that they work for a company like Aramark, they're now service employees, even though they go to work every day to the same building and do the same exact things. Got a payroll department? Close it and use ADP of PayChex. Those payroll workers were manufacturing employees. When ADP or PayChex hires the same workers they're counted as service employees. Have mechanics on staff for your equipment? Let them go. They used to be manufacturing workers, and now that they work for a equipment maintenance company, they're service employees. The examples are endless, but I think it's clear. Some of it comes from regulations, such as pension laws that are incredibly complex resulted in companies hiring pension management firms, or benefit management firms, for example. Most of it comes from information specialization. Companies like PayChex have the intricacies of payroll laws and payroll information programmed in their systems, and offer lower cost and better service than a payroll department can.
That's just one reason why the ISM non-manufacturing data is so strong. Construction has been a hot sector for a while, and people forget that's not a manufacturing business, and neither are mining (the oil business is not part of manufacturing either!), and the usual suspects of finance and banking are all examples of high-paying service industries. This is an indicator that Friday's employment figures should be good, except for the usual warning that payroll data have missed the strength of the service businesses, which are often too small to have impact on payroll data, and are best reflected in the household survey.
HP turns its back on its users group! Only control freaks and micromanagers can get any pleasure out of this. If your company thinks it has "rogue customers" who need to be monitored, then this is a smart move. There will certainly be fewer problems when there are no customers at all. No matter how this is sugar-coated, it's not a smart idea, even if you think the user group is bad.
Interview with Philip Kotler, world-renowned marketing expert, whose textbooks have been used in college and university classrooms for parts of four decades (at least three). A little disappointing, but worth a look anyway.
Yet another publisher laments that "print is dead." I used to get his magazine... his comments here are better than his magazine is... also an early Zinio user...
Tuesday, July 05, 2005
May Printing Shipments Data and PIA's Profits Data
These data will be discussed in detail in my next WTT column on July 15.
Data are from the manufacturer shipments report released on Tuesday, July 5. http://www.census.gov/indicator/www/m3/
Last week, PIA released data about printer profits for their 2005 Financial Ratios. Let's be clear: they're not 2005 data, they're data from 2004, so 2005 designates that they are published this year. (Who'd want to buy a 2004 report in 2005, anyway?)
The Financial Ratios are a marvelous undertaking, and I use them for a variety of tasks in my modeling (Harrie Lewis was the person most responsible for my using them, almost 25 years ago).
The data are not directly projectable to the marketplace, as the sampling and weighting that one would expect from a market research study are not applicable, though they could be weighted to reflect the full marketplace. Whatever-- this is quibbly stuff. The key thing for me is that it's a consistently applied methodology and there are few industry data series that go back that far that can say that.
The release made me look at my data series that I use from the Commerce Department, which is more aggregate, and based on tax returns and other data. PIA's release stated that the profit rate was up by 50%. The Commerce Department Data on profits before income taxes, combined with the data series on shipments (cited above) that I use gave me these year-to-year changes:
...........Profits as %
Year ....of Sales .......Change
1996 ......9.2% ......+11.2%
1997 ......8.9% ......-3.7%
1998 ......10.5% ......+18.1%
1999 ......10.8% ......+3.0%
2000 ......8.6% ......-20.2%
2001 ......2.6% ......-70.0%
2002 ......4.5% ......+72.7%
2003 ......3.8% ......-14.2%
2004 ......4.8% ......+25.1%
I'll discuss more in the 7/15 column.