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US Postal NewsAffordable mail alliance hits 1,000 members ........................................................................................1Postal Service sees $764M July loss ...................................................................................................2Book Industry NewsABC and ABA to present merger plan in September ............................................................................3AAP: trade net sales up 6.9% in Q2; 6% for the year ...........................................................................3Inkling launches e-text platform; McGraw-Hill takes it for a test drive....................................................4Catalog/Retail Industry NewsWalmart rolls back rollbacks, reduces ad spending ..............................................................................6Printing revenue from YP Directories declines in Q2, YTD ...................................................................7Target announces added consumer electronics services .....................................................................7Best Buy names chief design officer ....................................................................................................7Consider postage rates that maximize catalog circulation and increase USPS profitability....................8Direct Marketing Industry NewsMarketers brace for paper cost increase ..............................................................................................9Direct marketing job picture worsens since last year: survey..............................................................11Magazine Industry NewsRodale’s Michaelson unites publishers, circulators.............................................................................11Harman ready to become 'institution builder' at Newsweek ................................................................12Top 5 monthly mags: Runner's World in September winners' circle....................................................14Condé Nast snatches Time Inc. SVP to head consumer marketing ....................................................15MPA names three executives to key positions in repositioning of organization ...................................16How Entertainment Weekly embraces the digital age.........................................................................16Meredith title next up to insert video ad in print magazine ..................................................................17

ECONOMIC UPDATEGDP: 1.6% in Q2 2010 (down from 3.7% Q1 2010)

Unemployment Rate: 9.5% in July 2010 (unchanged from 9.5% in June)

Consumer Confidence: 50.4 in July 2010 (down from 54.3 in June)

US POSTAL NEWS

Affordable mail alliance hits 1,000 Members(Audience Development – August 26th, 2010) Original Link: http://www.audiencedevelopment.com/2010/affordable+mail+alliance+hits+1000+members

The Affordable Mail Alliance, a coalition of publishers, catalog mailers, direct marketers, printers and many of their representative associations formed in response to the USPS' proposed rate hike, has hit the 1,000 member mark.

August 30th, 2010

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The number is notable because of its range of industry representation. Historically, as the USPS has filed for its rate hikes in less dramatic fashion, the various mailer markets bickered over how the increases would be divided among them. A sampling of members from the publishing industry includes about 75 individual magazine publishers representing b-to-b, consumer and regional publications; the MPA and ABM; the DMA; IDEAlliance; the National Newspaper Association; and hundreds of local newspapers.

The fact that the USPS is availing itself of a loophole in the 2006 Postal Accountability and Enhancement Act that allows it to claim exceptional reasons to request rates higher than the statutory Consumer Price Index cap, which currently stands at .6 percent, seems to have created a unique bond among mailers. The USPS made its proposal in early July, which is when the AMA formed.

"It's an unprecedented coalition of the entire mailing industry," James Cregan, MPA's executive vice president/government affairs, tells AD. "In the past, a lot of rate change cases have been matters of different types of mailers and classes of mail fighting each other over who's going to pay what, but this is really the first time in history that everybody has joined together and supported one united effort."

That effort is to convince the Postal Regulatory Commission to reject the USPS rate hike proposal, which, depending on the class of mail, could raise prices anywhere from 5.6 percent into the double digits, says Cregan, who adds that this price hike request was so dramatic and the industry's response so quick, that the AMA formed out of "spontaneous combustion."

The proposal has triggered 90-day proceeding at the PRC, which will issue its decision either granting or rejecting the request by October 4.

Postal Service sees $764M July loss(DM News – August 26th, 2010)Original Link: http://www.dmnews.com/postal-service-sees-764m-july-loss/article/177632/

The US Postal Service saw a net loss of $764 million in July, bringing its 10-month fiscal year-to-date net loss to more than $6.1 billion. The organization ran a net loss of $865 million in July 2009, according to preliminary numbers filed with the Postal Regulatory Commission.

Mail volume was up 0.9% year over year to 13.8 billion pieces. Of that, 13.7 billion pieces were handled by the USPS' mailing services unit. However, for its fiscal year to date, the USPS saw a 4.3% decrease in mail volume to 142.7 billion pieces. The USPS also saw a net operating loss of $753 million for July. The unaudited numbers were provided by the Postal Regulatory Commission.

In July, the Postal Service also cut total work hours by 5% year over year to 97 million work hours. For FY 2010 to date, it has cut work hours by 6.5% to 989 million work hours.

Earlier this month, the USPS reported a net loss of $2.5 billion for June, a significant increase from the $1.3 billion reported in June 2009. Joseph Corbett, CFO of the Postal Service, warned this month that the organization might not be able to meet all financial obligations for next year, given ongoing trends.

The Postal Service is seeking approval from Congress and the Postal Regulatory Commission on a number of major changes to its services. It has proposed enacting an “exigent price increase” for 2011 that must be approved by the PRC, its oversight body. The USPS has also asked for permission to reduce home delivery to five days per week and promised to make its consumer- and business-facing services more convenient.

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Direct mailers and catalogers have said the range of price changes would have drastic negative effects on their businesses.

Greg Frey, PR representative for delivery, online services, post offices and retail at the USPS, declined comment, noting that the monthly numbers provided by the PRC are unaudited and that the Postal Service typically only comments on quarterly and yearly numbers.

BOOK INDUSTRY NEWS

ABC and ABA to present merger plan in September(Publishers Weekly – August 19th, 2010) Original Link: http://www.publishersweekly.com/pw/by-topic/childrens/childrens-industry-news/article/44200-abc-and-aba-to-present-merger-plan-in-september.html

By Judith RosenIt’s been over a year and a half since the Association of Booksellers for Children first began exploring the possibility of merging with the American Booksellers Association as one way of securing its future. Now that possibility is moving a step closer, with the release of a merger plan early next month, and a vote in October.

In preparation for the balloting, the staff of both organizations met last month at ABA’s headquarters in Tarrytown, N.Y., to formalize a plan for handling ABC’s programming if the merger were to go through. Subsequently both boards approved the plan and amended last May’s agreement to change the percentage of the vote required for the merger to pass. To ensure that ABC’s membership is truly behind the merger, the boards have upped the vote margin from two-thirds to 75% approval.

The formalized plan will be released on Tuesday, September 7, and posted on the ABC Web site so that booksellers can comment publicly on the proposal. Then on October 1, ABC members will receive a hard copy of the plan as well as public comments on it; ballots are due on October 22. ABC executive director Kristen McLean anticipates that the results will be available in early November. If the merger passes, then the two organizations will set an official date for the merger.

McLean said that she’s looking forward to the plan’s release. “I think it will be great for ABC members to look at a real, concrete proposal for what ABC could look like under a newly merged association,” she said. “The staff of both organizations worked hard to craft a plan that offered ABC members not only continuation, but substantial growth of ABC programming.”

If the proposal passes, McLean said that she would be willing to consult for at least a year. “I feel really positive about the merger. I’m committed to making it go through smoothly,” she said.

AAP: trade net sales up 6.9% in Q2; 6% for the year(Book Publishing Report – August 23rd, 2010)Original Link: http://www.bookpublishingreport.com/content/aap-trade-net-sales-69-q2-6-year

Trade net sales continue to show strong improvements over the last year’s recession-impacted results according to numbers released by the Association of American Publishers, with sales during the second

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quarter of 2010, as well as its first half, seeing a 6% increase while returns took a moderate decline. Trade book net sales were about $1.49 billion during the quarter compared to $1.39 billion in 2009, while returns dropped to $584.7 million from $591.5 million.

After being a continuous sore spot for AAP results, the adult hardcover segment switched things up, with net sales jumping 21.7%. The category has been in steady decline since the e-book market, which offers considerably lower prices on new bestsellers, exploded, but with impressive sales of Stieg Larsson’s Millennium Trilogy, hardcover seems to be seeing a mini-renaissance. Adult paperback has also fared well, though the segment’s mass market category has taken a tumble, with net sales down 24.5% for the quarter and 14.9% so far this year even as returns have eked up a marginal 0.6%.

The children’s segment, which greatly benefited from Stephenie Meyer’s Twilight Saga since the 2005 publication of Twilight, has not fared quite as well lately as the series’ sales have tapered off, with the segment’s hardcover category’s net sales dropping 16.7% for the year. Paperback was also down 5% for the period, though both saw returns drop around three or four percent.

Audio books continue to hurt, both for the quarter and the year, with net sales down 10.9% and 3.6%, respectively. Though the segment’s returns have fallen dramatically, sales simply cannot keep up to previous levels. However, audio books have benefited from the growing downloadable category, which has brought in over $35 million so far during 2010—more than half what physical sales have.

E-books continue to be a bright spot for the industry, with the segment growing 135.1% year-over-year for the quarter and 204.2% for the half. It should be pointed out, however, that this is the first quarter where e-book sales were lower than the previous quarter since 2004. This as the religious book market has strengthened somewhat, with net sales up 6% during the quarter and 1.4% for the half—both far better than anything it’s seen in recent reports.

Inkling launches e-text platform; McGraw-Hill takes it for a test drive(Educational Market – August 24th, 2010)Original Link: http://www.educationalmarketer.net/content/inkling-launches-e-text-platform-mcgraw-hill-takes-it-test-drive

Less than one year after it was founded, Inkling (San Francisco) in August launched its content platform with an application for the Apple iPad for college textbooks.

Among current e-textbook delivery platforms, Inkling with its interactive features has the potential for changing the way students and instructors interact with textbooks and instructional content.“This is the first step towards a more engaging learning experience—something we believe is necessary to drive superior learning outcomes,” Vineet Madan, vice president of McGraw-Hill Education’s (New York) Learning Ecosystems Group, told EM in an e-mail. “Simply put, the content and student interaction experiences need to be reinvented for today’s devices.”

Inkling kicked off its launch in time for the opening of the 2010-2011 college academic year with four McGraw-Hill textbooks: Marketing, 10e, by Kerin, Hartley, Rudelius; Biology, 9e, by Raven, Johnson, Mason, Losos, Singer; The Micro Economy Today, 12e, by Schiller; and Experience Psychology, 1e, by King.

Apple’s iPad tablet was eagerly anticipated as advancing the case for electronic textbooks, but there was no lineup of textbook publishers touting their books when the iPad was launched in April 2010, though

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CourseSmart (San Mateo, Calif.), the e-text sampling and e-commerce service backed by all the major college publishers, did rush to get out an app.

The lineup is emerging with the Inkling launch. In addition to McGraw-Hill, Inkling is in development talks with Cengage Learning (Stamford, Conn.), John Wiley & Sons (Hoboken, N.J.) and Wolters Kluwer (Philadelphia).

Wiley, for instance, expects projects from various parts of its company, including textbooks, to emerge over the coming year. Madan said the reception to the four pilot titles will shape McGraw-Hill’s plans for more titles.

The iPad is the subject of several pilots on college campuses this fall, much as Amazon’s Kindle DX was last year. The industry hopes the spread of such devices will drive momentum for e-textbooks, with more buy-in from students and more use by instructors.

Widespread acceptance of e-textbooks is expected to put a significant dent in sales of used textbooks. Inkling pilots will take place this fall at Abilene Christian University, Seton Hill University, the University of Alabama and through the Virginia Department of Education.

Interactive Features

The Apple aura for engaging interactive features is all over the pilot books with their integrated video, 3-D objects and quizzes with immediate feedback within the book itself. Students can share their notes—but not the book—and highlights with fellow students and professors.

Unlike other e-textbooks, the Inkling pilot texts do not expire at the end of a course. Copying and pasting is allowed but limited. The books cannot be printed.

Inkling does not page its books to match the print text, but page breaks are marked in the digital text to allow students to be on the same page as students with the print version.

Pricing Options

Introductory prices for the pilot texts begin at $69.99 for the whole book and $2.99 for chapters. Titles are available through the iTunes app store and are non-refundable.

The pricing is less than the full price of the print versions, leans toward the high side in comparison to CourseSmart texts and bests used-book prices found on Amazon.com. Pricing was higher than semester rentals quoted at online textbook rental firm Chegg (Santa Clara, Calif.).

“Inkling titles do not expire, as some other e-textbooks do,” Madan said. “As a result, initial pricing is more similar to print pricing, even though we’re delivering a richer content experience than what is possible in print.”

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CATALOG/RETAIL INDUSTRY NEWS

Walmart rolls back rollbacks, reduces ad spending(Advertising Age – August 17th, 2010)Original Link: http://adage.com/article?article_id=145417

Walmart will bring back thousands of items previously cut through Project Impact, scrap the deep "Rollbacks" it tried in April and May and reduce ad spending to "historical levels" as new U.S. President William Simon wastes no time reversing much of what his predecessor did.

Moves such as returning merchandise displays to the "Action Alley" aisles of Walmart stores have already resulted in better customer traffic and sales in July than during the prior two months of the just-completed fiscal second quarter, said Mr. Simon on a pre-recorded Aug. 17 earnings call. He assumed his current post in July as his predecessor, Vice Chairman Eduardo Castro-Wright, moved to new duties overseeing global e-commerce and sourcing.

"We plan to win in every category and let customers decide through their purchase decisions what to include in our assortment," Mr. Simon said. The statement was an apparent nod to Project Impact's "Win, Play, Show" strategy, in which the retailer ranked categories based on profitability and strategic importance, as well as in response to complaints from some suppliers about assortment decisions based on factors other than consumer appeal.

Mr. Simon said he's placing an emphasis on strengthening supplier relationships, and that store and regional managers are getting greater leeway to merchandise and manage assortment.

Despite changes after he took over the unit in July, Walmart's same-store sales were down 1.8%, on top of a 1.5% decline in the prior-year quarter. "It will take time to see significant changes in our comps," Mr. Simon said, though he expects improvement by the fourth quarter.

Mr. Simon acknowledged, as many supplier executives have said in recent months, that many of the deep "Rollbacks" on merchandise last quarter were funded out of Walmart's margin, not supplier funds. But he said the company began putting "the emphasis back on our core [Everyday Low Price] model" in July.

Walmart beat profit expectations modestly, despite the Rollback investments and increased inventory costs to restock Action Alley, Mr. Simon said. That result came through reductions in operating expenses, including a reduction in ad spending to "historical levels," after a substantial hike earlier in the year, he said.

Walmart executives, including CEO Mike Duke, didn't fully repudiate the wide-ranging Project Impact initiated by Mr. Castro-Wright and former Chief Merchandising Officer John Fleming, who left the retailer earlier this month. The store-remodeling aspect of Project Impact is continuing as planned this quarter, with thousands of items previously cut being brought back, rather than the hundreds previously indicated. But for the first time in many quarters, executives didn't mention Project Impact by name.

Mr. Simon and his team are "moving rapidly to build on the initiatives that worked and adjusting those that have not worked," Mr. Duke said.

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Printing revenue from YP Directories declines in Q2, YTD(Yellow Pages and Directory Report – August 17th, 2010)Original Link: http://www.yellowpagesanddirectoryreport.com/content/printing-revenue-yp-directories-declines-q2-ytd

Total revenue from printing yellow pages directories declined 0.7% to $422.7 million in the second quarter for the two largest printers in the U.S.—R.R. Donnelley and Quad/Graphics—according to Simba Information estimates. Combined year-to-date directory revenue is estimated to have declined 3.4% to $852.1 million. Simba is the publisher of YP&DR.

Target announces added consumer electronics services(Kantar Retail – August 25th, 2010)Original Link:http://www.mviinsights.com/ContentIndex/NewsDisplayLW.aspx?id=317418&key=VpabVrTj3FgLogoI%2fmmQg2kshKaVgKl9t7TDFmqzXbY%3d

Target has announced the launch of three services that will support its consumer electronics offer:

- (877) myTGTtech support – A toll-free product support hotline where customers may speak with live representatives for trouble shooting, support, and information about manufacturers’ warranties.

- Target Mobile expansion –Target is expanding its mobile centers to about 850 stores by the end of the year, with a wider rollout planned by mid-2011. The retailer’s online mobile shopping site, www.targetmobilestore.com, is partnered with Simplexity to manage the site and guide customers phone activations.

- Electronics Trade-In – Customers may bring their new and used iPhones, iPods, cell phones, and video games to the Target Mobile counter and trade them for credit on any purchase in the store. This service first launched in California on August 24, 2010, and by the end of the year it will rollout to approximately 850 stores.

Best Buy names chief design officer(Retail Today – August 24th, 2010)Original Link: http://www.retailingtoday.com/story.aspx?id=149789&section=CeEntertainment&menuid=169

Best Buy has named Aura Oslapas SVP and chief design officer, effective Sept. 15. In her new role, Oslapas will lead Best Buy’s design and brand identity team worldwide.

“Aura is a highly creative design leader,” said Barry Judge, Best Buy EVP and chief marketing officer. “She is able to bring forth progressive, customer-centered programs that define product and service offerings while being grounded in research and solid creative. Best Buy believes that great design is a key component of delivering unique brand experiences that resonate with customers and drive market share. Her ability to combine design and innovation will help us reach customers in new ways.” Oslapas most recently served as principal of A+O Design Methods, a boutique design agency in San Francisco. During her career, Oslapas has held leadership positions at organizations such as Esprit de Corp, IDEO and Stone.

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Consider postage rates that maximize catalog circulation and increase USPS profitability(ROI – August 24th, 2010)Original Link: http://www.retailonlineintegration.com/article/analyzing-usps-rate-increase-proposal/1#utm_source=retailonlineintegration.com&utm_medium=home_page&utm_campaign=today-on-retail-online-integration-tab

The United States Postal Service needs to consider setting catalog postage rates that help both catalogers and itself improve their profitability. The USPS and the Postal Regulatory Commission (PRC) should consider keeping Standard mail rates unchanged for catalogs (and magazines), while actually lowering carrier-route postage. Lowering postage is a novel concept. Why should the USPS consider it?

Carrier-route sorted catalogs are a profitable business for the Post Office. Therefore, it should use lower carrier-route postage rates as an incentive to push catalogers and printers to increase the volume of catalogs that flow through co-mail programs and qualify for carrier-route discounts. Printers and catalogers can increase the percentage of mail that's consolidated and sent using co-mail pools, thereby increasing the percentage of carrier-route mail.

The discounts for carrier-route sortation have spawned an entire co-mail industry that's shifting costs away from the USPS, creating a win-win situation: the Post Office gets profitable mail and mailers get dramatically lower costs, allowing catalogers to mail more catalogs profitably.

Increasing carrier-route postage savings has already worked to incentivize mailers to find co-mail opportunities. The percentage of catalogs going though the mail system as carrier-route bundles has increased dramatically in the past decade.

And there's opportunity for increasing the amount of mail that travels as carrier-route bundles because deeper incentives will result in more co-mail pools, and larger and more frequent co-mail pools.Lowering carrier-route postage will result in more volume in the short run because printers will build larger and more frequent co-mail pools.

Here's what's wrong with the USPS’ proposed postage rates currently being reviewed by the PRC.

- The USPS’ lawyers say it's not fair to question USPS management for being uneconomical, dishonest or inefficient. But USPS management is in fact “uneconomical” because it doesn’t use any economic analysis to set postage rates. If you don’t use the science of economics for rate setting, then you can correctly be viewed as being uneconomic. The USPS needs to show economic analysis of what will happen when Standard mail rates increase. This report needs to include a before-and-after analysis of the effects of previous rate increases, and an internal economic analysis of what will happen to the volume and profitability of Standard mail as a result of this proposed increase. If the USPS hasn't done an economic analysis of what will happen to catalog volume and its own profitability from catalogs, then it's fair to say they're being “uneconomic,” which violates the statute governing raising rates under the “exigent circumstances” exception.

- The USPS’ legal reply brief makes the claim that volume declines were from the recession alone and were “unforeseen.” The decline in Standard mail volume over the past three years is in large part a direct result of the huge price increases from past rate cases. Businesses that send direct mail, including catalogs and magazines, make precise decisions about the level of mail they can profitably send. Raising the cost of postage for Standard mail in the past has resulted in direct, predictable declines in volume. The USPS could reference the major rate increase of 2007 and the smaller rate increases of the last two years to predict with great accuracy the decline in mail volume from this proposed increase. Its argument that a decline in catalog volume was “unforeseen” when it raised postage rates 30 percent and more three years

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ago is simply wrong. Circulation plans are based on break-even calculations, which are based on postage rates. Volume declines can be predicted with scientific accuracy.

- The argument that the decline in volume is a result of the recession is offset by the fact that the economy is slowly recovering and catalog circulations are rebounding robustly. Abacus, a catalog co-op database, tracks catalog circulations closely. While Q1 2009 volume compared to Q1 2008 volume was off some 14 percent, circulation of Q1 2010 vs. Q1 2009 was up 8 percent. The economic recovery is translating into a rebound in the volume of catalogs mailed. Volume declines aren't solely the result of the recession, but more likely a combination of three primary factors: the transfer of mail volume to the internet; the recession; and the increase in postage rates.

- The standard for “exigent circumstances” is largely undefined, and both sides are seeking to have their legal briefs argue for reasonable definitions. The PRC must ensure the bar for “exigent circumstances” is high. If not, the loophole will be so large that the law is rendered meaningless. The USPS’ reply brief is particularly weak. It argues that it couldn’t see the decline in mail volume evolving based on the maturity of the internet. The internet, and in particular email, has been a major macroeconomic factor for a long time now. The USPS’ arguments that it “didn’t see this decline in mail volume coming” and “there's nothing we could have done about it because we're a quasi-government body” seem weak to me.

- The USPS presents legal arguments but not any economic arguments in its replies to the objections raised by lawyers for the various organizations representing bulk mailers. But the statutory language requires the USPS to be economic. Where are its economic arguments? I strongly suspect that no economic analysis exists. Again, if USPS management is uneconomic, then it hasn't met the standard for an exigent rate case filing. Therefore, this current request before the PRC should be declined. The USPS should be required to present a coherent Standard mail postage price that's been subjected to some economic analysis. A strong case can be made that the USPS can and should find ways to increase the volume of profitable bulk mail — especially catalogs. The USPS should keep postage rates the same for Standard mail and increase the postage discount for carrier-route mail. If the carrier-route discount is increased, catalogers’ will have larger universes of names to mail above breakeven (i.e., volume increases).

Increasing carrier-route discounts will also accelerate the growth of the co-mail industry, which will produce more mail in carrier-route bundles — which are profitable for the USPS to deliver. This move should result in incremental profitability, in addition to generating greater volume and significantly stimulating the economy. Isn’t that a better plan for postage rates than increasing them and watch volume ratchet down again?

DIRECT MARKETING INDUSTRY NEWS

Marketers brace for paper cost increase(DM News – August 23rd, 2010)Original Link: http://www.dmnews.com/marketers-brace-for-paper-cost-increase/article/177363/

Direct marketers and catalogers are preparing to face paper cost increases this fall, while also planning for a possible significant postal rate increase in January.

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Marketers say volatility in the paper market in recent years, due to economic instability, has made it difficult for them to project costs from one year to the next. Many marketers are facing paper price increases of as much as $3 per 100 pounds this fall, on top of prior hikes in April and July, according to notices from paper mills and industry experts.

The increase means a 7% to 10% cost increase for buyers, depending on the mill and type of paper.“Every increase changes our plans, and we no longer do long-term paper company contracts,” said Ashton Harrison, owner of Shades of Light, a home decorating goods cataloger. “I no longer run my business the way I did five years ago. If you told me before that I'd run a business like this, it would scare me.”Harrison said her company produces seven drops a year totaling just fewer than 2 million catalogs, half as many as six years ago.

“It's still an effective channel [to mail] but it costs too high a percentage of our sales,” she said. “It costs us more to mail our marketing pieces than it does to ship our goods to our customers.”Harrison said that 10% of her company's sales revenue goes toward postage expenses, up from about 8% six years ago.

“This is not good news for catalogers,” said Hamilton Davison, president and executive director at the American Catalog Mailers Association. “They're going to get a postage increase that's six-times the rate of inflation and a paper cost increase that is nine times the inflation rate [for the year].”

Paper mills are raising prices due to both less supply and greater demand for paper among customers, a category that includes both marketers and printers, according to industry experts.

“Much of the increase is just getting paper prices back to a more normal level. With this third increase now announced, we'll have seen a significant increase in paper costs since January,” John Maine, VP of world graphic papers at RISI, an information and analysis resource organization for the paper industry, who noted that prices dropped last year. “Paper prices for 2010 will still be below 2009's average by 3%.”

The increased demand is a result of not only more catalog printing, but widespread closures and machine shutdowns among paper manufacturers. Numerous midsize North American companies have either decreased capacity or gone out of business in the past year, accounting for less than 700,000 tons of coated paper output capacity for the year.

Paper price increases could prove costly for mills in the long run, according to Dan Walsh, VP of publication and catalog papers at Bradner Smith & Company, a paper merchant company.

“I really empathize with the mills who have had such a hard time in our dour economy, but I also see my clients, catalogers and publishers, who are doing whatever they can do to survive. These increases, while necessary for the mills, are forcing direct marketers to make changes which, in turn, will hurt the mills,” Walsh said.

Harrison said that prospecting once accounted for 75% of all catalog mailings, but her company has now replaced a significant portion of that with online ads and search engine optimization.

However, it is unlikely that marketers will move away from catalogs and direct mail en masse. “Generally speaking, today's marketer is most successful with a data-driven multichannel marketing strategy,” said Paul Imbierowicz, SVP of strategy and planning at Epsilon Targeting. “For many of our catalogers, they are so heavily focused on direct mail and their consumers have a strong preference for this channel, it will be hard to make the shift to digital.”

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Direct marketing job picture worsens since last year: survey(DM News – August 24th, 2010)Original Link: http://www.dmnews.com/direct-marketing-job-picture-worsens-since-last-year-survey/article/177461/

The median length of unemployment for direct marketers has reached 12 months, up from an average of 6.5 months a year ago, according to a survey from Bernhart Associates Executive Search.

Older workers with a higher desired income are facing lengthier unemployment than younger direct marketers, and nearly one-third of all job-seekers are 18 months into their search, according to the survey. Just fewer than half of respondents have been searching for more than a year.

“When you add it all up, unless they have an urgent need, employers are going to go slower, and these numbers show that,” said Jerry Bernhart, principal of Bernhart Associates Executive Search. “It's an employer's market and they know they can afford to take a little more time.”

Nearly half (48%) of respondents have been looking for a full-time direct marketing job for more than a year, while 10% said they have been looking for 10 to 12 months. Twenty-one percent of unemployed respondents said they have been job searching for between one and three months, while 12% said their search has lasted from four months to a half-year. Nine percent said they have been looking for between seven and nine months.

Bernhart sent the survey to 9,000 direct and digital marketers, narrowing qualified responses to include only unemployed direct marketers who are actively seeking full-time employment in the industry. There were 448 such respondents.

MAGAZINE INDUSTRY NEWS

Rodale’s Michaelson unites publishers, circulators(Mediaweek – August 22nd, 2010) Original Link: http://www.mediaweek.com/mw/content_display/news/magazines-newspapers/e3i915ec0f14ba05d6756fe5b2bdc644554?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Mediaweek-Magazines-And-Newspaper+%28Mediaweek+News+-+Magazines+and+Newspaper%29

When Rodale created a new role for overseeing sales and consumer marketing, the publisher of health and fitness titles like Men’s Health and Prevention adopted an organizational structure unusual to the industry. What made the move even more noteworthy was that the executive chosen to lead the new model didn’t have the sales background common to top publishing execs. Gregg Michaelson, who gained the title of president of Integrated Marketing and Sales and CMO last December, started at Rodale in 2001, running its book division before taking on circulation and then the company’s Web sites.

But as Michaelson explained, “While advertising is critical to our success, you have to have an integration between the two. Publishing companies are now realizing [that] a strong consumer base can drive revenue.”

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The changes didn’t end there. It used to be the goal for Rodale’s publishers to hit an ad revenue target. Michaelson said he realized ad and circ people can sometimes work at cross-purposes—even at a company like Rodale that gets fully half its revenue from consumers, above the industry average.

He changed that, giving publishers full P&L responsibility with oversight for their title’s circulation directors. The idea was to get publishers and circulators working together to find subscribers who would be likely to spend a lot of money on Rodale’s products long term, while keeping an eye on costs.

“Before, publishers just worked on advertising margin, and the circ team worked on circ margin,” he said. “While they should not work against each other, sometimes they would.”

For instance, the publisher might have wanted the title to reach younger readers, but circulation had difficulty doing so within its financial parameters. “Now, there’s one P&L under me, and if it means we have to invest more in a younger file, we would do it,” he said.

Rodale’s strategy isn’t only to charge the highest price possible for its magazines but also to sell subscribers multiple products from its array of health and fitness offerings, like books, workout videos and iPad apps. In so doing, the company gets what it calls highly engaged consumers it believes advertisers want to be associated with.

“We know the stronger the consumer, the better off we are with advertisers as well,” he said. “If a consumer group is engaged, I’d want my brand associated with it.”

Harman ready to become 'institution builder' at Newsweek(The Wall Street Journal – August 23rd, 2010)Original Link: http://online.wsj.com/article/SB10001424052748703579804575442050738051146.html?mod=WSJ_hpp_RIGHTTopCarousel_2

As founder of the stereo-equipment company that bears his name, Sidney Harman turned a $5,000 investment into what is now a $3-billion-a-year business. Now, at 92 years old, he is attempting what may be an even more difficult feat: reviving Newsweek.

Since he agreed to purchase the magazine from Washington Post Co. earlier this month, pundits have called Mr. Harman's motives—and sanity—into question. He took on more than $50 million in liabilities and agreed to keep most of Newsweek's employees—all for a magazine on track to lose at least $20 million this year, according to documents reviewed by The Wall Street Journal.

Mr. Harman says his plan for Newsweek is evolving, but he has plenty of ideas. He sees an enterprise with some glaring inefficiencies that hasn't done enough to exploit its name. He envisions a magazine with higher-quality paper, better graphics and subscriber perks like discounts on books written by Newsweek writers.

And until it can stand on its own, Mr. Harman says he is prepared to absorb the magazine's losses on a par with its recent results.

As for succession, Mr. Harman said he doesn't yet have a plan but that contrary to speculation, his wife, Rep. Jane Harman (D., Calif.), won't be involved in the magazine before or after his death.

Mr. Harman, who retired as chief executive in 2007 from Harman International Industries Inc. but remains its chairman emeritus, shared his views in an interview.

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Excerpts:

WSJ: What did you think when you took your first look at Newsweek's financials?

Mr. Harman: How about "Good God"? Pretty tough stuff. And not just tough in terms of the balance sheet. But the direction, the implications of it. It'd be silly to suggest that this is a walk in the park. It's a serious challenge.

WSJ: Why were you interested?

Mr. Harman: How could you not be? I'm a prodigious reader and I love to talk. The challenge at a time like this in the world of journalism…man, that's inescapable. That's better than a good-looking woman. Well, maybe not.

WSJ: When you first addressed the staff, you said you'd be "delighted" to get the magazine to break even "over a period of some years." Exactly how patient will you be?

Mr. Harman: Surprisingly, I think. I will count it as a major success if at the end of three years, that place is breaking even or about to break even. Some skeptics have kind of nagged at this stuff. "Come on, you're no institution builder. You're a businessman." Well, I think I've just become an institution builder.

WSJ: Last year Newsweek underwent an overhaul that involved reducing its circulation, raising ad rates and shifting to more opinion. What did you like and dislike about the relaunch?

Mr. Harman: Well, clearly I didn't like the result. The number of subscribers went down and the costs did not follow it [proportionally]. [But] it made very good sense for them to trim the subscription list. It's [conceivable] that the plan as it emerges will be based on a somewhat lower base than that. I enjoy reading it. But it's a collection of essays. I'm talking about getting behind the story.

WSJ: What do you envision the company looking like in five years?

Mr. Harman: Newsweek managed to insulate itself from all the opportunities to expand its mark. Newsweek should be in numbers of businesses it's not in now. The lecture business, the publishing business beyond the magazine, the consulting business, seminars and conventions, newsletters.

WSJ: What parts of your plan are under way?

Mr. Harman: I've been spending time with journalists in the offices in New York and Washington. I think it's appropriate to challenge the journalists of a publication like Newsweek to define your mission. What are you about? Here's my three-word definition of Newsweek's mission: Connecting the dots.

You pick up Newsweek, you pick up most publications, and by and large they're damn dull graphically. They don't have to be. The designers ought to be engaged in this process at the clay-model stage of the magazine. And it would show it. You pick up the magazine and it ought to be shouting at you: "Hey man, you're in for the time of your life."

I asked the publisher, "What would it cost to have a heavier stock for the cover and for the pages?" I believe that people have a sense of the magazine in terms of the heft of it. You're probably talking about millions. But for a quick effect on the buyer, that probably might be a damn good thing to do.

WSJ: How did you initially become interested? Who reached out to whom?

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Mr. Harman: I've known [Washington Post Co. Chairman] Don Graham for many years. A little more than once a year, he buzzes me to say, "How about breakfast?"

Totally coincidentally, Howard Fineman, a longtime writer for Newsweek, had said to me, "Are you aware that they're going to sell Newsweek?" And, "Hell, you ought to be interested."

I'd pretty much forgotten it. Don came over to the house for breakfast. We had a pleasant 90 minutes. I walked him to the car, he's getting into the car, and I said, "Son of a b----, aren't you going to ask me about Newsweek?" He stepped out of the car. "Are you interested?"

WSJ: Where are you in your search for an editor?

Mr. Harman: I have a nice long list of people I'm in the process of engaging.

WSJ: What are you looking for in an editor?

Mr. Harman: It's critically important that we attract the new generation of writers. There are guys out in that field who are really wired in and who are themselves magnets for them. I want an editor who has a fundamental respect for the business aspects of the operation, who doesn't think this is somehow an artistic undertaking totally separate from the real world.

Top 5 monthly mags: Runner's World in September winners' circle(Minonline.com – August 23rd, 2010)Original Link: http://www.minonline.com/news/Top-5-Monthly-Mags-Runners-World-in-September-Winners-Circle_15065.html

September is typically the biggest month for magazine advertising, and content strategies are formulated well in advance to catch the big prey. Fashion previews, tips on escaping end of summer doldrums and features about new running shoes are just a few of the types of content that have tantalized new advertisers.

As we continue to follow the upward trend in advertising dollars for 2010, we see that this September is not a disappointment. In fact, min reports in its September ad-page monthlies review that 94 of 145 magazine titles were up in advertising ad pages. (Last year's September chart only had 23 titles with a positive gain.)We tracked down the publishers of the top 5 monthlies (Runner’s World, Elle Decor, Texas Monthly, Glamour and People Stylewatch—to discuss their September successes.

1) Runner’s World publisher Chris Lambiase tells min that the title’s 68% hike in ad pages for September 2010 was due in part to an increase in advertisers for footwear, nutrition and auto categories. PowerBar, New Balance, Foot Locker and Moving Comfort were the big advertisers in RW's September issue. “The sport of running is strong and growing,” says Lambiase. “Throughout these tough economic times, our circulation—even at the newsstand—and audience numbers have hit record highs. Now the advertising is matching that growth.”

2) Affluent homeowners and the design community make up the Elle Decor audience, VP/publisher Barbara Friedmann tells min. Fashion, jewelry, watch and automotive advertiser are onboard September’s ED. “Our investment in the brand-increased rate base (up 10% as of March), tactical newsstand strategy (up 8.3% for the first half of 2010) and rapid expansion of digital content (unique visitors topped 630K for July) has allowed us to achieve results like September's 65% increase," says Friedmann.

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3) Texas Monthly showed a 60.8% hike in advertising this September and 57 more ad pages than in 2009. Retail, fashion, watch/jewelry, automotive and travel were the major advertiser categories, according to TM publisher Amy Saralegui. “Texas was much less affected than the rest of the country by the economic downturn,” Saralegui tells min. “Texas Monthly is in a unique position of being able to capitalize not only on the strong advertising dollars still being spent by Texas-based businesses but also on the advertising dollars being spent by national companies trying to tap into the affluent audience in Texas that they cannot reach effectively using national print."

4) New advertisers in the fashion and beauty categories, along with the Glamour iPad launch, contributed to Glamour’s 87.99 additional ad pages in September 2010 versus last year, according to Glamour associate publisher Pam Drucker, who tells min, “The launch of the Glamour app allowed us to sell nine advertisers onto the iPad, while leveraging incremental business into the issue. We were also able to encourage advertisers that ran pages in September 2009 to upgrade to spreads and larger units."

5) With a 54% ad-page gain in September, People StyleWatch continues to show growth each month, with a 57% cumulative increase year to date. "September is our biggest issue ever," said StyleWatch publisher Karin Tracy. "With 56% of the paging from new business, StyleWatch landed new advertisers including Marc Jacobs, Michael Kors, A/X Armani Exchange and DKNY."

Condé Nast snatches Time Inc. SVP to head consumer marketing(Folio – August 24th, 2010)Original Link: http://www.foliomag.com/2010/cond-nast-snatches-time-inc-svp-head-consumer-marketing

Not long after promoting its consumer marketing group president to president of the company, Condé Nast has appointed Monica Ray executive vice president of consumer marketing, overseeing consumer sales and marketing for the company’s entire portfolio. Ray’s appointment is effective September 20.

Currently, Ray serves as senior vice president of corporate digital development at Time Inc. According to Condé Nast president Robert Sauerberg, Ray’s “extensive experience in the areas of consumer marketing and digital product innovation will be critical as we expand our consumer-focused efforts.”

In a recent Q+A with FOLIO:, Sauerberg said that while Condé Nast’s portfolio of 20+ print magazines is still at the company’s core, technology and consumer expectations have “changed dramatically” and one of its big goals is to increase its consumer touch points and to “monetize all of those optimally.”

“We want our readers to engage with our brands in a variety of ways, and we feel our success will be based on being able to provide our content seamlessly across every appropriate platform that exists now and in the future,” Sauerberg told FOLIO:. “We want to take that engagement and continue to try to increase it and revalue the consumer proposition. We want to do that with our magazines and our Web sites and our digital applications.”

Before taking on the SVP of corporate digital development at Time Inc., Ray served as vice president and general manager at Entertainment Weekly. Prior to that she served as SVP and general manager of Time Inc. Interactive.

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MPA names three executives to key positions in repositioning of organization(Audience Development – August 25th, 2010)Original Link: http://magazine.org/association/press/mpa_press_releases/mpa-reorg-2010.aspx

The Affordable Mail Alliance, a coalition of publishers, catalog mailers, direct marketers, printers and many of their representative associations formed in response to the USPS' proposed rate hike, has hit the 1,000 member mark.

The number is notable because of its range of industry representation. Historically, as the USPS has filed for its rate hikes in less dramatic fashion, the various mailer markets bickered over how the increases would be divided among them.

A sampling of members from the publishing industry includes about 75 individual magazine publishers representing b-to-b, consumer and regional publications; the MPA and ABM; the DMA; IDEAlliance; the National Newspaper Association; and hundreds of local newspapers.

The fact that the USPS is availing itself of a loophole in the 2006 Postal Accountability and Enhancement Act that allows it to claim exceptional reasons to request rates higher than the statutory Consumer Price Index cap, which currently stands at .6 percent, seems to have created a unique bond among mailers. The USPS made its proposal in early July, which is when the AMA formed.

"It's an unprecedented coalition of the entire mailing industry," James Cregan, MPA's executive vice president/government affairs, tells AD. "In the past, a lot of rate change cases have been matters of different types of mailers and classes of mail fighting each other over who's going to pay what, but this is really the first time in history that everybody has joined together and supported one united effort."

That effort is to convince the Postal Regulatory Commission to reject the USPS rate hike proposal, which, depending on the class of mail, could raise prices anywhere from 5.6 percent into the double digits, says Cregan, who adds that this price hike request was so dramatic and the industry's response so quick, that the AMA formed out of "spontaneous combustion."

The proposal has triggered 90-day proceeding at the PRC, which will issue its decision either granting or rejecting the request by October 4.

How Entertainment Weekly embraces the digital age(Read Write Web – August 25th, 2010)Original Link: http://www.readwriteweb.com/archives/how_entertainment_weekly_embraces_the_digital_age.php

In partnership with Entertainment Weekly, YouTube just announced the launch of a specialized site for getting a sneak peek at the new television season which includes "bite-sized previews of programs, reality TV, comedies, dramas and more."

The site, which is essentially just an EW-branded YouTube channel, isn't all that notable in and of itself . But it's just one of EW's many digital initiatives as of late. This print-mag-turned-media-company has also launched a number of other digital offerings over the past months, including a popular "Must List" app for the iPad and now iPhone, the integration of 2D barcodes into its print pages and experiments with video-in-print ads.

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EW's YouTube TV Preview Channel

Entertainment Weekly, which also runs the successful digital property at EW.com, has never been one to shy away from embracing the digital age, and this YouTube channel is only a small part of that.

In a post on the YouTube blog, EW's editor, Jess Cagle, introduces the new YouTube channel, which arrives ahead of the magazine's Fall TV print issue, one of its most popular of year. Cagle says that, in addition to the previews of the new and returning shows, the channel will also offer exclusive interviews with both producers and actors from the hottest shows.

EW’s Mobile Plateform

Earlier this year, EW also launched its first iPad app called the "Must List," a weekly top 10 featuring the best in film, books, TV and music, where each item is linked to associated media like song clips or movie trailers. Not exactly a digital magazine own its own, the app hits a sweet spot for iPad users, taking advantage of the device's Internet connectivity to deliver streaming music and video, while also understanding how iPad owners want consume content - that is, interactively.

With the iPad app's success in hand, the company redesigned its content for the smaller screen and introduced the Must List app for the iPhone and iPod Touch last month. The magazine is now officially introducing the new iPhone app to its print readers via the Editor's Letter in the August issue.

What's more interesting, perhaps, about EW's mobile operation, is how it generates revenue for the company. As iPad and iPhone users peruse EW's content recommendations, they're offered the opportunity to purchase items immediately within iTunes. Although the purchases take place outside the app itself, Apple splits the profits from those purchases with EW in a revenue-sharing deal. In addition, the ads shown within the mobile apps are often a part of a multiplatform ad buy which also includes print and the EW.com website.

Experiments with Video-in-Print

Last year, EW experimented with technology that introduced video advertising in its printed pages, using wafer-thin screens that were used to promote CBS TV shows and Pepsi products. The small screens, about the size of a mobile phone's screen, each held their own chip that stored the ads. Only select issues of the magazine mailed to subscribers in New York and L.A. included these digital advertisements, however, and the video-print ads have not been seen since.

The ads were likely more of a marketing stunt than a realistic venture for magazine ads, but they were intriguing nonetheless. How many other magazines are willing to experiment like this? Very few. Outside of Esquire's 2008 anniversary issue which featured an e-ink cover, there aren't many other digital experiments like this of note.

2D Barcode Integration in Print Mag

More recently, though, the magazine released its Summer Movie Preview issue which came to life thanks to its inclusion of 2D barcodes. The barcodes could be snapped using the cross-platform Microsoft Tag mobile application which links a barcode to Web content. In EW's case, the barcodes linked to YouTube videos of sixteen official movie trailers. Also barcoded were ads from five big name brands including Absolut, HBO, History Channel, Honda and CTAM/Movies on Demand. In the latest (August 2010) issue, the Fall Movie Preview, EW has again included barcodes into its pages, but this time only eleven films are digitally linked. However, the advertiser lineup has expanded, with seventeen advertisers offering barcoded ads, some across multiple pages.

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The digital initiatives EW experiments with have a lot to do with the EW audience, made up of "entertainment enthusiasts," explains Barrie Gordon, senior manager of public relations at Entertainment Weekly, New York. This sort of person "likes to be the first to try things and talk about it with their network of friends." In other words, EW caters to the entertainment-focused "early adopter." Given our own obsession with technology around here, we're calling EW one to watch for an example of a print company that's successfully navigating the waters of the digital age. In fact, we'll added it to our own "Must List."

Meredith title next up to insert video ad in print magazine(Folio – August 26th, 2010)Original Link: http://www.foliomag.com/2010/meredith-title-next-insert-video-ad-print-magazine

It was only a matter of time before more print magazines followed Entertainment Weekly’s footsteps and start incorporating video elements into their print magazines. Next up on the list is Meredith Corp.’s Successful Farming, which partnered with advertiser Bayer CropScience to develop a video insert that appeared in the August issue.

According to publisher Scott Mortimer, Successful Farming and the pesticide company—through its communications agency Rhea+Kaiser—began collaborating on the initiative more than six months ago.

The ad, for Bayer’s Votivo product, is a four-page insert that includes a two-inch-by-two-inch video screen on page 20 of the magazine. The screen plays an opening message when a reader opens to the page and then four additional videos depending on which buttons the reader pushes.

The video ad insert was distributed to 17,000 of Successful Farming’s subscribers. The magazine helped cross reference its sub list with the Bayer CropScience’s database in order to target the most qualified potential customers for the Votivo product.

Video-in-print company Americhip developed the technology used in the video insert.

“The insertion costs were similar to other inserts that we run, with the exception of increased postage because of the weight of the piece and that it had to be manually inserted into the magazine,” Mortimer tells FOLIO:

Mortimer says the hand binding took approximately two-and-a-half days to complete and was a “premium” over normal inserts. “We also worked closely with our printer and with the U.S. Postal Service to ensure that it would not be damaged in the mail stream,” he says.

Last fall, Time Inc.’s Entertainment Weekly worked with Americhip to develop video-in-print ads from CBS and Pepsi.