PrintForecast Perspective Archives

A hot book this year has been The Long Tail by Christopher Anderson. He initially wrote about the concept in an article of the same name in Wired magazine about three years ago. Basically, he uses a concept of the statistical dispersion of observations to describe a world where “big hits,” like best selling books or the blockbuster movies. This large amount of sales is the head of the curve. Anderson's thesis, illustrated by examples ranging from the creation of the Sears catalog and its impact on early 20th Century rural consumers to today's examples of amazon.com and NetFlix, among others. It's no accident that Apple's iTunes is thriving and that retailer Tower Records has declared bankruptcy. Rather than the “big hit,” the back catalogs of older offerings and specialty and niche products will have greater total sales than the “big hits” but dispersed over many, many products. This “long tail,” or the longest, flattest, and lowest, part of sales will have the greatest return.

Anderson does a superb job of making his case, acknowledging the contributions of decades of business and demographic innovations. This is contrary to the stereotypical Internet book which starts off with the assumption that these times are different than any other, and if you don't get on board now, you're dumb and you'll be out of business next week, or sooner.

There's only one area where I feel that Anderson is neglectful: there is virtually no mention about the revolution in logistics that companies like FedEx and UPS have created, where almost anything can be shipped for next day delivery. The connectivity of the Internet aside, which is a near-miracle itself, if a product can't be digitized, then you need these companies. Without them, for example, amazon.com would be just an interesting order entry process, and then a plodding delivery system. The idea that you can track your package with a few keyboard strokes and mouse clicks is incredible.

The book reminded me of the calls I would get whenever a printing plate company had a new controller or CFO. Predictably, I would get the question “Do we need all these plate sizes? Can't we standardize on a few plate sizes?” The answer would be negative, of course; the variety of press vintages, models, modifications, and operator preferences all conspired to create finishing and inventory nightmares for plate companies and their dealers. They all found ways to cope with these problems through the years, but this would indicate that not all products can be “long tailed” with the beneficial effects that the concept offers in other categories, but even Anderson is aware of that.

The “long tail” is creeping into the things that we do and the way we look at business practice. For example, magazines have always touted their circulation and readership, broadcasters have referenced the reach they have with audiences. In a long tail world, targeting to very narrow audiences is all the more possible, and all the more essential. Micro-niches aren't “sexy” from an advertising perspective, and they challenge implementation tactics and budgets. We should remember, however, that the ultimate small niche marketing is the traditional one-person/one-client sales call. If sales people have been tailoring their pitches to customers based on the unique requirements of that specific client, then question is how to multiply that capability with other communications methods.

To do that requires that marketers create situations for individuals in microniches to become entities that facilitate efficient communications. Sometimes these are events or other promotions. The development of e-communities is an obvious one. Trade associations and users groups are others. Do these entities exist in a manner worth supporting to the ends you need as a marketer? If not, work to create them. This is one of the reasons why public relations has gained in importance in the Internet era.

Publishing is probably the most obvious focus of The Long Tail. Because audio, video, text, and graphics can all be in digital form, the cost of maintaining them is constantly declining and means of accessing and transmitting them is always improving. Content creation is the ultimate “long tail” business.

In a recent interview in Folio:, Anderson, still an editor at Wired, responded to a question about the “long tail” concept as it applies to publishing with “...I don’t look to the publishing industry for guidance. I look at what the readers are doing. Once upon a time I used to compete with magazines and newspapers. Now I compete with magazines and newspapers and 20 million blogs. Readers have choices out there—some of them professional, some of them amateur. The name of the game is attention and I’m fighting for attention share with a vast, increasing number of competitors.” The lesson is one that marketers have known for a while, and one that I have used many times in presentations: ignore your competitors, stay ahead of your customers. It's hard to implement in a market that is so reliant on its “big iron” investments in presses. The press you buy, its size and capabilities, is an expression of where a print owner believes opportunities will be for the next ten years. To ask printers to be willing to walk away from their hard-won purchase in an attempt to satisfy every twist and turn in a fickle marketplace is certainly asking a lot.

In the same interview, Anderson reminds us that the nature of the Internet distribution of information has changed dramatically: “The day when you could shovel your stuff onto the Web site and people would bookmark it and come back are pretty much gone.” Most people visiting sites today are referred from somewhere else. Google has changed the whole concept of branded portals. Audiences can't be taken for granted, and the serendipitous audience traffic from search engines puts new pressure on communicators to make sure that one visit they might get from that person makes positive, satisfying impression. The search engine phenomenon means that more people are being delivered to a specific web site page, and not to a home or landing page. It also means that site visits are topic-driven and not event-driven. Not that there isn't interest in news, of course, but the “long tail” looks at news as the daily addition and enhancement of topic-accessed archives.

An article in The Wall Street Journal applied significant scrutiny to many of Anderson's claims in the book. Some of them poked holes in the book's data, which Anderson defended and refuted. It has to be remembered that The Long Tail, like many other business books point out trends and concepts. It's for others to take them up and run with them if they see fit. The marketplace is constantly changing: Anderson is not writing a history, but expressing ideas about things as they have happened so far. As business people we have to walk with one foot in the past, another in the present, and a hand reaching for the future. All of our future sales will come, by definition, sometime in the future, and we have to remember that the technologies that make the “long tail” possible also affect the costs in the head. Competition from the products in the tail, affect the nature and design of the ones in the head. Business is not a lab experiment where we can control one variable. The business environment is almost chaotic, which is why such a premium is placed on good forecasting. Anderson's are just his ideas, and there will certainly be others opposite his. The world economy is so large and diverse that conflicting paths to success can always be found.

What does all this mean for print? Again, knowing why and how people use print, and ultimately the information contained in print media, is a valuable service that printers can provide. When there are no printed materials, the printers can be creating the electronic versions for clients, hosting them on their servers, but also providing wise counsel about how to provide the right access on web sites. It's obvious that the “long tail” concept is an underpinning of ondemand book production and all ondemand documents. If you've ever thought of getting into those businesses, this is a must-read.

As stated earlier, The Long Tail might be considered by some to be a warning of the demise of the printing industry. But printers who understand the concept can start building the capabilities and innovative services that their customers will need as the “long tail” continues its slow integration into everyday business practice and life. Instead an eerie premonition, think of it as the foundation for a blueprint that can be used to create a print business' next strategic leap forward. We have to stay ahead of our customers, don't we? Otherwise, the tail wags us.

Get the book The Long Tail at Amazon.com
http://www.amazon.com/gp/product/1401302378?ie=UTF8&tag=drjoewebbcom-20&linkCode=as2&camp=1789&creative=9325&creativeASIN=1401302378

The original article http://www.wired.com/wired/archive/12.10/tail.html

Tower Records' bankruptcy http://www.cbsnews.com/stories/2004/02/09/entertainment/main599008.shtml

The Folio: interview
http://www.foliomag.com/viewmedia.asp?prmMID=6456&prmID=1

The Wall Street Journal that questions the book
http://online.wsj.com/article/SB115387606762117314.html?mod=todays_us_marketplace

Anderson defends himself
http://www.longtail.com/the_long_tail/2006/07/factchecking_my.html

For many years the phrase “fragmentation of media” has been used to refer to the splitting of communications budgets across different media. An important part of this phrase is the assumption that the same total dollars are being spent on media (as best as I can tell, that is correct), and the main reason for the use of the phrase is that those dollars are being divided up differently than before. Perhaps you have heard it as the phrase “the changing media mix.”

Through these years, the phrase has made me uncomfortable, but I could never explain why; now I can. "Fragmentation" is a media victim's word.

It reminded me of the old fairy tale about Humpty Dumpty falling and no one could put him back together again. Thank goodness for plastic flower pots: I've dropped clay ones, and I know they can't be put back together very well. There are fragments all over the place and there is no way of finding all of them.

The words “fragmented” or “fragmentation” imply something that is not as originally intended, is broken, or is missing pieces. That is, there may have been a precipitating contrary event causing the fragmentation. There are only fragments of the Dead Sea Scrolls remaining, inflicted by centuries of storage under harsh conditions. People spend years studying them and grappling with what is there and making educated conjecture about what might or might not be missing. Fragmentation is usually unintended. Dead Sea Scrolls scribes had no intent to produce fragments. Neither do media planners.

If it's not fragmentation, what is it? It's called media planning. If a medium is allocated less than was historically, that is referred to as fragmenting; the media that get more refer to it as a media shift. Fragmentation is how an outsider describes it, especially the media on the losing side. Fragmentation is a word for media allocation victims.

The primary case against using "fragmenting" is that the overriding goals of the media planning process have not changed: effective and consistent branding, messaging, that create audience awareness (and reaction) across media. The search is for synergy, to get the best return for the least cost, a greater ROI for the package than can be produced by a single medium.

The measurable effectiveness of media has traditionally been difficult. If sales went up, the ads must have worked. If sales went down, the ads must have been bad. Companies carry out many simultaneous activities to stimulate sales, such as have sales people with incentives, or add dealers, improve product quality, or act to deal with competitive action. Any claim to a single act causing an improvement is likely bravado and not empirical. No executive is likely to run an experiment to find out what the primary causal activity was from a scientific standpoint, especially when doing the research can be expensive.

A new book, What Sticks, attempts to determine how one part of media, advertising, is best deployed by consumer marketers, by extension helps explain the change in the demand for print and the use of printed products like magazines, inserts, and others. John Wanamaker's quote that “half of advertising is wasted but I can never find out which half,” is now out of date. The authors have determined that it's actually 37%, at least of the companies studied. The biggest problem they found was spending too much in a category, usually broadcast TV, beyond the point of economic return. The same budget, they were able to demonstrate, was to reallocate “extra” budget dollars to other media, and achieve better returns. The authors studied marketers whose total budget in advertising was $300 billion; of that, $112 billion was considered wasted. One of the underlying reasons for cross-media, therefore, is that each medium in a media mix has its own diminishing returns. Spending more is not the approach, spending differently is.

Fragmentation is not something decision-makers seek, but synergy is. Maximizing ROI is something that applies to the whole budget, not just one medium. Communicators are trying to find the “Goldilocks” allocation to media where everything is “just right.” Unfortunately, this allocation will always be changing, because the marketplace will always be changing as well. Competitive actions, technological change, innovation, targeted geographies, consumer preferences, and other factors, are dynamic, so skills in creating optimal media mixes are bound to be sought aggressively by agencies and marketers alike.

Most of all, marketers have realized that multiple media are more effective than just one. As the authors write about their research “...we found that an exposure to one TV ad, one magazine ad, and one online ad preformed better than seeing three ads concentrated in any one media type...” They also state “Seeing a consistent pattern across media creates a more powerful pattern in consumers' brains than the mere repetition of the exact same message in the same media.”

What does this mean for print and commercial printers? It means that printers have an opportunity to get into this fray by finding ways to dispel confusion about the effectiveness of media, and especially print, even the most basic print. First, printers must understand that the print orders they get are only a brief glimpse of what its customers are doing in their overall communications. Be curious: have casual discussions with client decision makers that fill in the gaps and provide a sense of the overall plan, if there is one. Printers can play a role in suggesting media mix alternatives and making sure that clients get the most out of what they do. Most printers have customers who are not sophisticated in media allocation. They may not even be aware that they should have a media mix.

Ask questions when exploring their needs: Is there a business reply card that is part of a product brochure? Can direct mail stimulate e-commerce activity? Does the client web site capture the proper information for sales leads or a follow-up mailing? Do trade show lead forms capture the right information for print and e-marketing follow-up? Can text of printed materials be available on a web site, or as a PDF, or have an e-marketing campaign built around them? Is there a consistency in the graphics and overall design that makes the communicator's message appear consistent in the media they use? It's easier to repurpose images and content of a job at the outset rather than later. There are obviously many more questions that can be asked depending on the client.

The extent to which printers can be proactive in media mix decisions, even for small clients, is actually up to the printer, and not the client; “proactive” means that you take the first step, not the client. Small clients may not even realize that they have a media mix or should have one, and that they should measure the results they get. Imagine that: printers helping customers measure effectiveness of what they do. Cultivating greater media savvy among clients who are not as wise to the media reflects positively on our industry.

The What Sticks data demonstrate is that media allocation without data to support looks like “black art” but is probably more like guessing. If 37% of advertising expenditures is wasted for the largest and best of marketers, one can only imagine how high the percentage might be for others. The decline in commercial print volume since 2000 is not just competition with other media, but a dissatisfaction with print. If people were satisfied with their results, they would not have been reallocating budgets.

Our industry can become a valuable resource in improving the effectiveness of all communications spending, but only if we take the time to understand that there is a media mix and the search for communications synergy. If not, we can be on the side that blames our failures on something called “fragmentation.” Seeing it from the communicators side puts the whole question in richer perspective.

What Sticks
http://www.amazon.com/gp/product/1419584332?ie=UTF8&tag=drjoewebbcom-20&linkCode=as2&camp=1789&creative=9325&creativeASIN=1419584332

Years ago, when I worked in a bureaucratic graphic arts multinational, I was accused of not fitting in because I was too “flip.” I have even had people shake their heads in presentations wondering how I can make light of some things which seem so dire. Long ago, I learned that the definition of humor was “the recognition of an incongruity.” Later, in reading Peter Drucker, I learned that being a successful entrepreneur requires one to find “incongruities in the marketplace.” Coincidence? I think not. Most successful entrepreneurs I have met have a different, sometimes warped way of looking at things that rendered them dysfunctional in organizational settings and performing heroic business acts once outside them. Not everyone sees incongruities, and if they do, they can't always make sense of them when they do.

An interesting aspect of the U.S. economy is that it is so large and dynamic that it has room to support two totally opposite trends, in other words, a trend and a countertrend, at the same time. At the same time Wal-Mart grows, people buy $300 iPods. The Internet can replace print, but that's how we send our PDFs to the printer. People drive for miles to save a penny on gasoline, using more gas than the savings. I write about the printing industry... on the Internet. There's no humor in these things? We are immersed in incongruities.

This week, the Wall Street Journal had an article about the billing practices of printers, which was also picked up by Reuters. Reviewing the story reminded me how years ago, some typographers could make more than half of their income from “authors alterations,” something that was killed by word processing and desktop publishing. It was common for additional charges to print jobs because of problems detected in various proofing stages; many of these are gone. In financial printing, which is what this article was about, last minute legal rewordings and data crunching on close deadline are common, and often document creators are more concerned about making submission deadlines than they are about the costs of their tweaking. This particular case looks pretty adversarial, unfortunately. Much of Wall Street's perceptions of the printing industry are based on their own experiences with printing financial documents.

An Advertising Age article described a meeting of GM's media “partners,” with the goal “to forge more cross-media deals and integrated, multiplatform marketing opportunities.” Already, the Publishers Information Bureau has reported a 14% decline in magazine advertising pages by the automotive sector for January through August 2006. Just-released Commerce Department data shows an increase in advertising agency revenues for the past year in inflation-adjusted terms of almost 7%. Those dollars are going somewhere. Invitees to the GM meeting, by the way, included Time Warner, Viacom, Universal, Walt Disney Co., Google, NBC Universal and Hearst Corp. Did I read that right? Google? Really? Google? Yes, Google.

But wait! There's more! Copywriter Arthur Schiff, famed for his role in the creation of the informercial, who brought that phrase and the “Ginsu” knife to television, died recently. People complained about his sitting in his office, staring into space, doing nothing. When someone complained, he said “I am working. You pay me to think. What do you suppose thinking looks like?”

International consulting firm McKinsey has posted a book up on their website, for free download, that discusses the difficult jobs marketers have today. The title of the book is about the issues in marketing today. It's called “Profiting from Proliferation.” Reaching audiences is more complex than ever. As they put it, “An explosion of new customer segments, sales and service channels, media, and brands is challenging marketers to reinvent themselves so they can simultaneously prioritize opportunities in a more sophisticated way and increase the consistency and coordination of their marketing execution.” Remember how years ago Marshall McLuhan told us that “the medium is the message”? It's more clear than ever that the message is the message, and content creators don't control the access environment of their target audience.

So what's it all mean? We don't need to be reminded that satisfied customers reduce marketing costs and contribute to the long-term survival of a company. When this process gets into court, it usually means that there were a long pattern of failures and clashes leading to that point. Dissatisfaction with the status quo leads to a search for new ways of doing things, alternatives explored, and questioning whether or not something needs to be done in the first place. GM, a media client so large that throngs of media suppliers can be commanded to attend a meeting on short notice. The attendees represent the marketplace and its alternatives, and an indication of GM's dissatisfaction with what it's been doing. Even the Ginsu knife ad communicated a sense of value to its audience, a value worth acting upon. Was it hucksterism? Sure it was. But anyone who had the annoyance of dealing with dull knives could replace their dissatisfaction with delight.

And that's how it all ties together: dissatisfaction is a gateway to change. I was taught long ago that the marketing definition of a problem is “a perceived difference between the actual state and the desired state.” Dissatisfaction is the first step to looking for new ways of doing things, whether it's to stop working with a supplier, or inventing a new approach.

The way to discover problems to be solved is to look for incongruities. Clarify what the problems are, because others may not see them at first; perception is critical. Develop a plausible solution. It will be interesting to see how those financial printing companies diffuse a festering problem into a viable solution. Or how media companies deal with GM's desire to increase response by finding an optimal media mix (which others will attempt to imitate). Whatever the case, the purpose of entrepreneurship is to solve other people's problems.

“Proliferation” is an opportunity for our industry, because viewing communications that way allows us to enter the discussion of media in a new way. Such a report reflects rampant confusion or ignorance about media selection and deployment in today's marketplace. Are we up to the task of making the case for print?

LINKS

WSJ article
http://online.wsj.com/article/SB115793345655058978.html?mod=hps_us_at_glance_markets

Reuters article
http://today.reuters.com/news/articleinvesting.aspx?view=CN&storyID=2006-09-11T120144Z_01_N11142822_RTRIDST_0_FINANCIAL-PRINTERS.XML&rpc=66&type=qcna

Advertising Age article
http://adage.com/article?article_id=111750

Publishers Information Bureau
http://www.magazine.org/Advertising_and_PIB/PIB_Revenue_and_Pages/Revenue___Pages_by_Ad_Category__monthly___YTD_/18280.cfm

Commerce Department data
http://www.census.gov/indicator/qss/QSS.html

Ginsu ad
http://www.adpunch.org/entry/arthur-schiff-the-unseen-king-of-the-infomercials-dies-of-lung-cancer/

Arthur Schiff obituary
http://www.washingtonpost.com/wp-dyn/content/article/2006/09/01/AR2006090101777.html

McKinsey book
http://www.mckinseyquarterly.com/PDFDownload.aspx?L2=16&L3=20&ar=1810&srid=27&gp=0

Marshall McLuhan
http://en.wikipedia.org/wiki/Marshall_McLuhan

It's not always great news, but it certainly can be. The industry has been advised for many years to concentrate its selling efforts outside corporate purchasing departments and go directly to marketers and communicators. This can be a problem as executive recruiting firm Spencer Stuart reports that the average tenure of a Chief Marketing Officer is now only 23.2 months. The rule of thumb, in my experience, has been that it takes six months for a new executive to become familiar with their environment, a year to accurately diagnose problems with all of their subtleties and implications, and eighteen months to show progress. Five months later it seems, they are gone.

There are many problems with this, of course, but we'll limit the discussion to how it affects printers and the content development and production businesses.

First, if you are a new vendor, it takes considerable time to start the selling process of introducing your company and breaking down pre-existing business relationships to induce them to try your offering. Sometimes you have to wait until current suppliers fail before you get your own opportunity to work with that client. (Reminds me of the old saw about the bad sales rep who said “I've never messed up one of your orders. All I want is a chance.”)

Second, the players are always changing. Because selling outside the purchasing department requires knowing decision-makers, influencers, gatekeepers, and others, a more complex network of relationships needs to be maintained. Understanding that network and nurturing those relationships takes time and effort. Many printers feel that they should keep selling to purchasing departments because they perceive that there is greater stability and certainty in those relationships, and the costs of selling using other strategies may have greater risk and higher, uncertain costs, with longer sales cycles. What they give up in lower selling prices, they feel, is balanced by lower and more predictable sales costs. (What some in the industry consider to be a lack of sophistication among printers in selling and marketing may actually be an economic decision based on a realistic acknowledgment of their inability to execute a grander strategy; but that is a topic for another time). Indeed, the marketplace rewarded such production-oriented management in the past, but things are not that way anymore. The marketplace does not reward such activity today. In fact, multi-tier selling is critical in this environment, because it offers a more balanced view of the client and provides for additional relationships that maintain communication when there is a change of command. This can benefit the incumbent as well as a new salesperson, when the changing of the guard opens the window for new opportunities.

Why is short CMO tenure “good” for the printing industry?

It's only “good” if the opportunities that are created are taken. There is intense pressure on new CMOs to perform and have early successes. They need ideas. They need a mix of continuity from the prior office-holder, and they need to stop things that were no longer working (which is presumably why the prior CMO was replaced). Most of all, they need to have a measurable, almost immediate, positive impact on their company's sales volume.

Knowing past communication campaigns, even those worked on by competitive printing companies, and their effect is important. How well do you know the range of printed materials used in the marketing departments of prospect and client companies? Do you have a sense of what the client's competitors are doing? Your role as a supplier can be immensely helpful to a new CMO.

A change in CMO is often the precursor to a change in ad agency, public relations firm, and the company's network of freelancers. How well do you know those resources? Can you recommend new ones to the fresh CMO for them to consider?

Finally, a change in CMO often means a change in media. How equipped is your company to discuss the use of print? ...how print works with other media? ...new uses of print? ... effectiveness of print? ...the ROI of print? Can you supply the links to non-print media that the company may need?

All of these questions can only be answered when the printing business is viewed as an expert in these areas. Competence in graphic communications has to extend well past the production floor for the printer to be viewed as a credible advisor in these matters. Value-added is not a task performed for an extra fee; value-added is an established mutually profitable relationship between peers.

Marketing is supposed to be a long-range strategic activity that permeates an organization. Yet, with the average CMO tenure at less than two years, it is clear that marketing is far more tactical today. Print is a superb tactical medium. Printers who actively participate in the transitional changes when a new CMO arrives can have a significant advantage over competitors who do not. And, since that CMO may leave for a new position in two years, that former CMO may take the proactive relationship that was created to their next assignment. In that case, what you do today is preparing you for a new relationship two years from now where you'll never have to make a cold call. And if you're having trouble getting into a company today... don't worry, that person will be gone, on average, in 23.2 months.