Q&A: Us Weekly VP, Chief Revenue Officer Vicci Rose
Excerpts from Rose in a Q&A with Samir Husni. On the rush to digital advertising, despite persistant fraud problems: "Us Weekly has a very sizeable print footprint with just under 2M copies per week [in 2H 2017, per AAM statement]...so of course we’re big believers in print. And I am incredulous with the number of...agencies and clients acknowledging that their own research with media-mix modeling, etc. will point to a strong [print] ROI, but [print's] not 'in fashion'... at the same time...the whole spectrum of digital, digital video, social media, mobile...all of those platforms add a tremendous conduit to...both our existing...[and] new audiences. I do feel we have to temper the industry’s excitement. There are certain advertisers that rushed into the digital world, and...thought that it would have the measurement that they wanted. But if we continue to see that click-through rates are a fraction of a percent, there isn’t an advertiser out there that could believe that is a success metric, [whereas] quantitative research in print, Starch for example, shows tremendous awareness, tremendous activity levels, as a result of engaging with [print] ads. And that continues, even in the face of such tremendous, widespread access to digital." On some pundits' insistence that celebrity magazines have no future in print: "I totally disagree. The fact remains, whether it’s Us Weekly or some of our key competitors, we are able to provide a tremendous amount of paid circulated copies every single week. You just have to look at Us Weekly and People magazine. Again, the landscape has changed, where today not as much of our sales are at retail as they were before, but our average customer is paying roughly $70, that’s the actual price paid, for our subscription; for 52 weeks a year. And we’re able to sustain the circulation and in fact, the advertising, for 52 copies per year. And almost all of our weekly competitors in the entertainment and celebrity space are able to do that as well."
Conde Exits Sales Partnership With NBCU, Vox Media
Digiday: "Condé Nast has left the co-sales ad partnership formed by NBCUniversal and Vox Media after less than a year. [Condé] announced the pact...in March 2017. They pitched it as a way for advertisers to reach more than 200M consumers and 99% of the country’s millennials. The companies also listed two other benefits for advertisers: the ability to use Condé Nast’s data product, Spire; and two new ad formats focused on mobile video and branded content. The original announcement didn’t describe the partnership as finite; however, Vox Media said three campaigns resulted from the Condé Nast deal, using ad products created just for the partnership, and as such, the partnership fulfilled its objective. 'The specific approach was to take these to market, and then the partnership would end,' said Ryan Pauley, GM of Concert, Vox Media and NBCU’s ad platform. Condé Nast wouldn’t comment on why it left the partnership, but said it would partner again with Concert under the right circumstances... Pauley said Vox Media is happy with the overall performance of Concert, whose buys run across Vox Media, NBCU and a handful of smaller publishers, including Brit + Co, Entrepreneur, Funny or Die and a few more that are expected to be announced soon. [He] said Concert tripled its sales from 2016 to 2017 with 200 clients served and is on track to double sales this year. He did not say the amount of sales that means, however... In the case of Condé Nast, the need to split the revenue and do extra work on the back end eroded the profit margins, sources close to the arrangement said. It didn’t help that [Jim] Norton, who championed the deal, was pushed out [as sales chief] of Condé Nast last September"...
Meredith Expected to Cut 200 to 300 Jobs
Forbes cites WSJ report that Meredith Corp. is expected to lay off 200 to 300 staff as early as this week, primarily employees of the former Time Inc., in New York. "The positions to be eliminated will be in the legal, human resources and financial departments, not the editorial staffs of the magazines that were part of the sale.Meredith is making moves to shop three magazines it acquired in January - Time, Sports Illustrated and Fortune.Reuters has reported that Meredith has hired two investment banks, Citigroup Inc. and Houlihan Lokey Inc., to locate possible buyers for the titles. WSJ: "The reductions are part of Meredith’s efforts to trim $400M to $500M in costs over the next two years. Meredith is also expected to reveal a new sales structure that provides greater focus on specific magazine brands, the people said. In recent years, Time Inc. embraced a sales approach that emphasized advertising categories such as pharmaceuticals rather than individual magazines. As part of the reorganization, Meredith is also preparing a new way to pitch advertisers with much larger print and digital offerings"...
Popular Science Launches Tour Business
MediaPost: "Popular Science is extending its brand appeal with tours, kicking off "Popular Science Expeditions." The Bonnier-owned science and technology magazine brand is partnering with experiential travel company smarTours to launch the new endeavor. 'Exploring the world through the lens of discovery and adventure is a tenet of Popular Science,' said EIC Joe Brown. 'Partnering with smarTours…allows us the opportunity to give our audience exclusive access to learn about and explore the world's most interesting cities, as well as specially curated science and technology experiences.' Popular Science's editorial staff curated each trip around a theme such as technology, nature and the environment, architecture and ancient culture. Popular Science Expeditions offers all-inclusive packages for the fall and winter of 2018, including a safari in South Africa, and exploring the cities of Dubai and Abu Dhabi, ancient culture in China and architecture and environment in Egypt. Each trip lasts between nine and 14 days, and costs from $1,899 to $3,599. A member of PopSci’s editorial team will join each expedition to help answer questions and offer insight to the group on the tour"...
Kroger Dropping Assault-Gun Publications
Bloomberg: Kroger "will remove publications about assault rifles from its stores, wading further into the U.S. debate on gun control. The move comes a few weeks after the grocer joined Walmart Inc. and Dick’s Sporting Goods Inc. in tightening gun restrictions in the aftermath of the deadly school shooting last month in Parkland, Fla. Now, Kroger is pulling 'a few assault-rifle themed periodicals' from its supermarkets, but will continue to carry some gun magazines, according to spokeswoman Kristal Howard"...
Facebook Under Fire for Reported Misuse of 50M Users' Data in 2016 Election, Brexit Vote
NY Times: "Facebook on Sunday faced a backlash about how it protects user data, as American and British lawmakers demanded that it explain how a political data firm with links to President Trump’s 2016 campaign was able to harvest private information from more than 50M Facebook profiles without the social network’s alerting users. Sen. Amy Klobuchar of Minnesota, a Democratic member of the Senate Judiciary Committee, went so far as to press for Mark Zuckerberg, Facebook’s chief executive, to appear before the panel to explain what the social network knew about the misuse of its data 'to target political advertising and manipulate voters.' The calls for greater scrutiny followed reports on Saturday in The New York Times and The Observer of London that Cambridge Analytica, a political data firm founded by Stephen K. Bannon and Robert Mercer, the wealthy Republican donor, had used the Facebook data to develop methods that it claimed could identify the personalities of individual American voters and influence their behavior. The firm’s so-called psychographic modeling underpinned its work for the Trump campaign in 2016, though many have questioned the effectiveness of its techniques. But Facebook did not inform users whose data had been harvested. The lack of disclosure could violate laws in Britain and in many American states. Damian Collins, a Conservative lawmaker in Britain who is leading a parliamentary inquiry into fake news and Russian meddling in the country’s referendum to leave the European Union, said this weekend that he, too, would call on Mr. Zuckerberg or another top executive to testify..." Link to the original article detailing the data misuse also below. Excerpt: "Christopher Wylie, who helped found Cambridge and worked there until late 2014, said of its leaders: 'Rules don’t matter for them. For them, this is a war, and it’s all fair. They want to fight a culture war in America,' he added. 'Cambridge Analytica was supposed to be the arsenal of weapons to fight that culture war.'"
Duopoly's Ad Share Predicted to Decline in 2018
WSJ: eMarketer is forecasting that the Google/Facebook "duopoly" will see its combined U.S. advertising market share decline this year, to 56.8%, from 58.5% last year--even as total U.S. digital ad spending is projected to grow 19% to $107B. The dip is said to reflect competitive platforms like Amazon and Snapchat chipping away at the duopoly's ad dominance. "Google’s U.S. revenue from digital advertising is expected to increase about 15% this year to $39.92B, while Facebook’s would jump 17% to $21B, according to eMarketer’s forecast. That would give Google command of 37.2% of the market, down from 38.6%. Facebook’s market share will likely be 19.6%, down from 19.9%, the first time eMarketer has projected such a decline for the social-media company. Google’s market share contracted for the first time in 2016"...
D. A. Raids Offices of University Allegedly Tied to Newsweek Media
NY Post: "Investigators from the Manhattan District Attorney’s office on Thursday raided the Hudson Valley offices of Olivet University that is linked to possible financial wrongdoings at [Newsweek Media Group], The Post has learned. The DA raided the offices of the fundamentalist Christian college in Wingdale, NY, roughly 75 miles north of Midtown Manhattan, sources said. The Manhattan DA declined comment, but a spokesman for the New York State Police in Dover, NY, confirmed the raid... The DA is probing possible financial ties between the university, World Olivet Assembly, an evangelical church whose members founded the school, and NMG, sources said. The probe is being handled by the prosecutor’s major economics crime bureau and financial intelligence unit, according to one source who has been in contact with the DA.
OTHER NEWS OF NOTE:
Meredith, eMeals Partner to Offer 'Curated' Meals for Walmart, Kroger Pickup or Home Delivery
From a release: Meredith Corp. has partnered with eMeals, "the leading digital meal planning solution for over a decade, to bring editorially curated meal plans to millions of home cooks. Through this partnership, Allrecipes, Better Homes & Gardens, and EatingWell users will have access to a trusted, end-to-end meal planning solution, from recipe inspiration to shopping list creation and grocery fulfillment – all in one seamless app experience. Each week, users can log into the eMeals app to view customized meal selections from their favorite brands, developed by Meredith editors and staff nutritionists. Users can select the meals they wish to add to their weekly plans, save recipe favorites, and automatically generate a weekly shopping list of ingredients with the click of a button. Users can shop themselves or save time by skipping the grocery store with integrated pickup and delivery options. Users can place their order within the eMeals app for pickup at Walmart Grocery and Kroger ClickList locations, or for same-day home delivery through AmazonFresh, Instacart and soon through Shipt. 'The magic of these plans is that top-rated, editor-curated recipes from Allrecipes, Better Homes & Gardens, and EatingWell are now available in an easy-to-use app that simplifies dinner planning and allows users to optionally send their shopping list to one of our integrated grocery pickup and delivery partners,' said Forrest Collier, CEO of eMeals. 'This is a fresh way to leverage recipes created by three of today's favorite consumer brands in a practical tool that helps families eat healthier, more affordable dinners.' This partnership comes alongside Allrecipes' own direct integration with AmazonFresh and Instacart for recipe ingredient fulfillment"... The latter partnership was announced in Nov. 2017, and its first brand participant (Hidden Valley) was announced last week. (Both were covered in MBR Daily; see repeat links to those releases below.)
Target to Test New Loyalty Strategies
Minn. Star-Tribune: "Target Redcard’s 5% discount has been a powerful draw for many shoppers--so much so that nearly a quarter of purchases from the retailer are now made with one... But as growth of its branded debit and credit cards has plateaued, Target is exploring other ways to generate more loyalty at a time when online shopping has exposed consumers to many more places where they can shop. [So next month,] Target will begin testing a new rewards program in the Dallas/Fort Worth area: "Target Red," which is not tied to a payment card... Shoppers who sign up for a free Target Red membership can use 1 percent of their purchase totals toward their next Target runs. Members can also waive the $5 fee for Target Restock, the next-day delivery service for household essentials and dry groceries. Members also will receive half off the first year of a $99 membership to Shipt to access Target’s new same-day delivery service. Target Red members also will get to vote on which organizations Target should focus its charitable giving, a new twist on a now-defunct program previously connected to Redcard where shoppers could direct funds to the school of their choice. For Target, the growth of Prime is of particular concern since there's high overlap with its shopper base. About 47% of frequent Target shoppers said last year that they were also Amazon Prime members, according to Kantar’s shopper surveys. In the last year, Target also has been dabbling with ways to strengthen its existing Redcard program by adding additional benefits. Last year, it gave Redcard holders access to about 100 Black Friday deals a day early online, a limited-edition Star Wars figurine that wasn’t available to other customers and an invite-only midnight shopping event in stores to pre-shop the Victoria Beckham for Target collection. Next month, it is for the first time going to give all Redcard holders first dibs on select pieces from its newest design collaboration with Hunter a week before they go on sale to the general public"...
Publix, Walmart Seen Gaining from Southeastern Bankruptcy
SN: "Lakeland, Fla.-based Publix Supermarkets is likely to get a boost in traffic from the store closures announced as part of Southeastern Grocers’ prepackaged Chapter 11 bankruptcy filing, observers said.'The tonnage has to go somewhere,' said Antony Karabus, CEO at HRC Retail Advisory, Northbrook, Ill. “It’s likely to be driven to folks like Publix, maybe to other Winn-Dixie stores within a short drive and maybe to Walmart Supercenters. All of these stores, like Publix, are likely to benefit from being near stores that are closing. People still need to buy their food.' As reported, Southeastern said it would close 94 stores across its operating areas as part of its bankruptcy filing. Most of the stores to be closed are under the Winn-Dixie banner, but several Harvey’s and Bi-Lo locations are also slated for closure, along with one Fresco location. Southeastern’s bankruptcy filing followed by just a few weeks a bankruptcy filing by Williamsville, N.Y.-based Tops Markets. Both chains had been highly leveraged under their private equity ownership. 'When you’ve got flat to declining top-line growth, and flat to declining margins, and you’ve got significant debt servicing costs from these leveraged buyout transactions, it is unbelievably difficult,' said Karabus. 'You just can’t make all of those numbers work out, and I think that’s what’s causing some of these bankruptcies.' Part of the challenge is that retailers that have taken on significant debt under private ownership have not been able to invest as much as they should have in store maintenance and remodels, which makes it all the more difficult to grow sales. 'People don’t like shopping in older, dirty food stores,' said Karabus. 'They want fresh, new and bright stores to shop in.' He suggested that struggling food retailers need to invest in efforts that drive profitable traffic such as in-store cafes and prepared foods, along with increasing their penetration of private brands, which can drive both higher margins and serve as a means of differentiation from competition. Neil Stern, senior partner at Chicago-based retail consulting firm McMillian Doolittle, agreed that Publix is likely to benefit from the Winn-Dixie store closings in the short term, although those locations could eventually be snapped up by other food retailers"...
Regional Supermarkets Buckling Under Pressure
Bloomberg: Regional grocery chains are filing for bankruptcy. "European-born discounters are expanding, forcing competitors to keep their own prices low. And Kroger Co. and Walmart Inc., the two largest grocers in the U.S., are investing in technology and expanding delivery as they try to fend off an incursion by Amazon.com Inc. It’s a bleak outlook for a sector that was supposed to be rebounding this year. A historic bout of food deflation--which fueled a price war in the past two years--has ended, but efforts to sell more groceries online are gobbling up investment dollars. And some well-known names are crying uncle... Southeastern Grocers, owner of the Winn-Dixie and Bi-Lo supermarket chains, filed for bankruptcy last week. Southeastern has nearly 700 locations. The company announced it was reorganizing on Thursday, with plans to close 94 stores. Along with Southeastern Grocers, Tops Friendly Markets also filed for bankruptcy in the past month. Based in Williamsville, New York, Tops has about 170 stores... Amazon’s expansion has prodded traditional stores into making costly changes -- and the fears of investors have battered their stocks. So far this year, Kroger and Walmart have lost more than $30B in market value combined... But the grocery giants at least have the scale and resources needed to adapt. The industry’s smaller players are even more at risk..."
Amazon Says Go Stores Seeing High Repeat Business
Reuters: "Amazon is tracking how regularly customers shop at its store without checkout lines in Seattle--and so far, the verdict is they keep coming back. 'The ones who work very close, like in the building up above, will come down even just to grab a drink because it’s so fast and easy,' Amazon VP Gianna Puerini said in an interview at the ShopTalk e-commerce conference in Las Vegas. The detail offers an early glimpse at how the store, known as Amazon Go, is faring two months after opening its doors to the public. Shopping frequency, sales and other metrics reviewed by Amazon will likely inform how it thinks about expanding the concept elsewhere in the United States, if at all. Amazon Go is fashioned after small grocery stores, with a crucial difference: it has no cashiers... Puerini said store associates spend the vast majority of their time restocking shelves - another indication of the shop’s popularity. Research-focused venture capital firm Loup Ventures wrote of Amazon Go last month: “Our experience was flawless, leaving us increasingly confident that Amazon is best positioned to own the operating system of automated retail. Eventually, we expect Amazon to make this technology available to other retailers'"...
New Lidl Ads Targets Traditional Grocery
SN: "Discount grocer Lidl has unveiled a new multimedia ad campaign in the U.S. attacking traditional grocery practices as inefficient and costly to consumers. The “Rethink Grocery” campaign, created by The Martin Agency, Alexandria, Va., includes a series of TV and radio ads featuring a fictional supermarket chain called Vanhills Grocery, whose owners gleefully gouge consumers on price. In the first TV spot, a Vanhills worker is shown stacking apples in a giant pyramid while company owners and managers acknowledge the wastefulness of the practice. The ad cuts to a Lidl store, where placing boxes of apples that are 'fresh from the farm' directly onto store shelves is shown to be the more cost-effective strategy, resulting in savings of 'up to 50%.' In one radio spot, an announcer asks a Vanhills Grocery owner if her stores could sell award-winning wines for under $10 per bottle, as Lidl does, and she replies that they could, 'but we’d rather not.' The campaign features the tag line, 'Don’t let them waste your money.' 'This new campaign is designed to raise awareness about the costly inefficiencies of traditional supermarkets and the savings that Lidl’s streamlined approach brings to customers every day,' said Elina Elvholm, director of brand marketing at Lidl US. 'When customers shop at Lidl, they experience less complexity, lower prices, and better-quality choices'"...
Confidence High in Overall Economy, But Not in Personal Economic Security
MediaPost: "A number of polls show consumer confidence trending at or near recent highs, but when you drill below the surface macroeconomic indicators, there's still a fair amount of anxiety among Americans when it comes to their personal economic well-being as consumers. According to custom surveys released as part of comScore's "2018 State of the Online Retail Economy" report, the measurement firm shows overall consumer confidence is quite high, but when you drill into things like "unemployment/job security" and "real estate/market values," not so much." (Article includes graph of consumer sentiment.)
OTHER NEWS OF NOTE: