Note to readers:
MBR Daily is taking a holiday break, back Mon., Nov. 26. Happy Thanksgiving to all.
Q&A: Hearst Magazines President Troy Young
Excerpts from Troy Young in a Q&A with Samir Husni: "In all mediums, we have to serve the customers and understand how we are serving those customers. I call that content with purpose. We have to be incredibly mindful, whenever we’re delivering a magazine into someone’s home or we are engaging that consumer on YouTube, why we’re there and how we make someone’s life better. Print is heavily edited and curated and it’s like a celebration or an event that happens once a month. There’s something really wonderful about that. It’s a lean-back experience that I think gives a consumer a break from the intensity of the digital world. I think increasingly that people are going to look for that. So, print plays a really important role in saying 'This is important and this has a place in culture...take a moment to think and read about this and consume it.' I think that our magazines are going to play an important role in how we do that for a long, long time... I think digital performs a different role in that it’s about being relevant in the moment and responding to the news cycle, as well as reinforcing a very clear point of view that the brand has. There is a very complementary role that they play to each other. And I would actually add that video is largely an entertainment medium. Obviously, also useful or valuable as a service delivery mechanism, helping people do things... New products are really important. And our work on Pioneer Woman and Airbnb are the two most recent indications that we’re really open to partnering and creating new print products.... [On misconceptions about him]: Maybe I’m cast narrowly as a digital guy, and I think of myself as a media executive, so I’m not defined by digital. I have spent a lot of my career thinking about how the pieces fit together in the digital world, but I’m more of a media person and a media lover and someone who really appreciates media brands and how they meet consumer’s needs... [On the company's new research team of 12]: I think that our ability to turn data into insight and to augment that with research is incredibly important across all aspects of the business, not the least of which is our editorial team... this notion of content with purpose is supported by the idea of pulling a lot of the insight and knowledge out of our readers. I think that for a long time there has been the research practice in magazines that really involved face-to-face dialogue with readers. Now we have so much data because we’re connected with consumers every day that we need a group that can help take that information and make it really actionable by editors"...
Travel + Leisure Debuts Its First IGTV Series
MediaPost: Meredith's Travel + Leisure has launched its first IGTV series--a monthly short-form video food and travel series for Instagram TV called “Locals.” Each episode focuses on one destination through the eyes of a local, who guides the audience with their personal connection to the area. In the first, six-minute episode, “Eat Ramen Like a Local,” the founders of Ramen Beast, an English-language guide and app, take viewers through Japan, showing them the right way to order and eat ramen and helpful customs and phrases to use at ramen shops. Users plug in their location in Japan and Ramen Beast recommends ramen shops in the area, with reviews, photos and other information. Travel + Leisure has about 3.7M followers on its Instagram account.
NYT Reorgs Non-Edit Side to Speed Digital Sub Growth
WWD: The NY Times has "cut 11 people from its marketing team through a combination of its “audience and brand” and “consumer revenue” departments into what will now be a single work area, WWD has learned. As part of the changes, David Rubin, formerly the Times’ head of brand, has been named chief marketing officer, a first for the outlet. Hannah Yang, formerly SVP, subscription acquisition and media management, has been named head of subscription growth, according to an internal memo. The Times intends to reach 10M digital subscribers in the coming years, up from around 3M now. Meredith Levien, chief operations officer, wrote in the memo that Rubin “is a brilliant marketer whose smarts and judgment are relied upon across the company” and noted that Yang’s new role “is at the heart of our commercial success.” She will lead a team focused on subscription growth composed of people from the Times’ data, design, engineering, finance, marketing, product and strategy departments and continue to oversee a team covering print subscriptions, which are an ever-shrinking number of paying readers... Growth of digital subscriptions and daily engagement with stories are two big missions, but also being focused on is driving subscriptions to stand-alone products the Times offers, a branding push to tell readers what makes the Times “worth paying for” and the build-out of digital advertising and “ad experiences that support sustained ad revenue"...
September Bookstore Sales -0.9%
PW: "Bookstore sales fell 0.9% in September, compared to same period a year ago, according to a preliminary estimate released by the U.S. Census Bureau. Revenue was $948M in September, down from $957M a year ago.September was the second consecutive month in which bookstore sales fell, compared to 2017, after a string of gains in the late winter through mid-summer. For the first nine months of 2018, bookstore sales were down 0.6%, to $7.63B, compared to sales of $7.68B in the first nine months of 2017"...
Zenith: Growth of Programmatic Buys Is Slowing
MediaPost: "Two-thirds of all money spent on advertising in digital media in 2019 (65%) will be traded programmatically, according to Zenith’s Programmatic Marketing Forecasts. Advertisers will spend $84B programmatically next year -- projected to reach $98B in 2020, when 68% of digital media expenditure will be earmarked for programmatic trading. However, the transition is taking longer than Zenith expected, with last year's forecast projected to be 64% in 2018, and 67% in 2019. Analysts have pulled back both forecasts by two percentage points. Further, Zenith estimates that programmatic ad spend will grow 24% in 2018 -- down from 32% growth in 2017, and forecast to be only 19% in 2019, followed by 17% growth in 2020. This is due to the introduction of privacy legislation, such as the EU’s GDPR. It has had a "chilling effect," by making certain data previously used in programmatic transactions unavailable and making other data more costly to process, says Zenith"...
Opinion: Consequences Mounting for Facebook
MediaPost blogger Rob Williams writes about the mounting fallout of last week's New York Times' reporting on Facebook's efforts to discredit critics and cover up the discovery of Russian propaganda on its platform. "Investors are discounting its stock to a 20-month low, and advertising executives question the company’s morality and safeguards for brands, according to a follow-up report by the Times. Such criticism adds to past advertiser complaints about the accuracy of Facebook’s audience measurement, alongside worries about legal liabilities that may arise from sharing user data with the platform. Some of these complaints may be a routine negotiating stance designed to exact better terms from Facebook on ad placements. So far, no major advertiser has announced plans to pull ads from the social network, especially as Black Friday looms and marketers prepare to cash in on the shopping bonanza.Despite the outrage directed at Facebook’s arrogance, ineptitude and moral vacuity, the company still draws a massive audience. It has detailed information about its users that helps marketers reach target groups with laser-like precision.That market power is frustrating among publishers that have lost revenue to Facebook or have grown more dependent on the social network to reach readers. The resentment Facebook fosters in the journalism community is palpable. Reporters believe the company drains funds out of news organizations and lets misinformation run unchecked among viral threads.Critics say the company has been slow to recognize its social responsibility as a media platform.... Yet, its near-total dependence on ad revenue aligns the company more closely with publishing.A key challenge for the broader publishing industry is that overall ad spending can only grow so much every year, and that’s not including economic recessions that compel cuts to marketing budgets. For several years, Facebook has warned that its growth would slow.Those cautionary statements were never intended to be a self-fulfilling prophecy resulting from unceasing scandals."
OTHER NEWS OF NOTE:
Lidl Acquiring Best Market
PG: "Lidl US and Best Market have revealed an agreement in which Lidl will acquire 27 Best Market stores in New York and New Jersey. The transaction – Lidl’s first U.S. acquisition – enables the grocer, whose American headquarters is in Arlington County, Va., to grow its regional presence and enter a new market on New York’s Long Island.One Best Market store, in Newington, Conn., is not included in the transaction... Following the acquisition, Lidl plans a step-by-step transition process starting next year that will involve the remodeling, reinvestment and conversion of Best Market stores to Lidl locations. All New York and New Jersey Best Market employees will have guaranteed employment opportunities at Lidl after the transition, with affected associates offered wages and benefits equal to, or better than, those provided by their previous employer... The terms of the acquisition agreement, which is expected to close in the next few months, haven’t been disclosed. Based in Germany, Lidl operates about 10,500 stores in 29 countries. It first established its U.S. headquarters in June 2015 and now has more than 50 stores across seven east coast states."
Margin Investments Pay Off for Natural Grocers
SN: "Increased customer counts and larger basket sizes drove improved comp-store sales for Natural Grocers by Vitamin Cottage in Q4 and fiscal 2018.Comp-store sales grew 6.3% in Q4, vs. 2.1% in last Q4. Transaction counts grew 3.8% and average basket grew 2.5%. Competitive promotions focused on price just might have been the secret. The company took margin hits earlier in the year to realize those gains, but the costs stabilized as the year progressed and the investment paid off, co-president Kemper Isely told analysts... Natural Grocers ended fiscal 2018 with sales growth of 10.4%, to hit $849M, with the quarter up 9.6%, reaching $217.5M. Additional Q4 highlights: mature store (those opened before 2013) sales increased 3.9%, vs. a 0.2% decrease in last Q4; gross margin was 26.3% of sales vs. 26.8% last Q4; net income grew 68.7% to $2.1M, with diluted EPS of 9 cents; store expenses as a percentage of sales decreased to 22.1% vs. 22.7% last Q4; gross profit rose 7.6%; adjusted EBITDA rose 9.8% to $11.3M. Highlights for fiscal 2018 year-end include: daily average comp-store sales rose 5.8% vs. a 0.1% increase in fiscal 2017; daily transactions grew an average 4.4% as basket sizes grew an average 1.4%; gross margin was 26.6% of sales vs. 27.6% of sales last fisca; daily average mature store sales rose 3% vs. a 1.6% decrease last fiscal; net income grew $12.7M with diluted EPS of 56 cents; store expenses as a percentage of sales decreased to 22% from 22.7% last fiscal; gross profit rose 6.2%; adjusted EBITDA was $45.1M. The retailer now has 148 stores in 19 states and has signed leases for five new stores in Colorado, North Dakota, Oregon and Texas that are planned for 2019 or later. The chain’s plans 2019 outlook includes: 7-9 new stores; 5-6 relocations; 2-4% daily average comp-store sales growth; net income as a percentage of sales of 0.75% to 1%; diluted EPS of 33-40 cents; and cap ex of $27M-$32M.
Lucky's Launches Shipt in Six States
SN: "Natural foods grocer Lucky’s Market is kicking off its new Lucky’s Market Delivers program with same-day delivery from Shipt in six states comprising 18 metropolitan areas.The markets included in the rollout are: Boulder/Longmont and Denver, Colo.; in Florida,Gainesville, Gulf Coast, Jacksonville, Naples, Orlando, Sarasota, South Florida, Space Coast, Tallahassee and Tampa; Savannah, Ga.; Iowa City/Cedar Rapids, Iowa; Columbia, Springfield and St. Louis, Mo.; and Billings, Mont.In early 2019, the Lucky’s Market Delivers program will be available in additional locations in Lucky’s Market communities in the Midwest as wells as Lucky’s Market new store locations slated to open in Q1 of 2019"...
Florida Sues CVS, Walgreens Over Sale of Opiods
ABC News: "The state of Florida has sued the two largest pharmacy chains in the country over the sale of opioids -- an epidemic that has killed thousands in the state in just the past few years.Attorney General Pam Bondi announced the state had amended an original lawsuit, filed in May, to include both CVS Pharmacy and Walgreens. Insys Therapeutics, the specialty pharmaceutical company that produces Subsys, the brand name for a type of fentanyl, was also added to the complaint... Walgreens operates 820 stores in Florida, and CVS operates 754 in the state... "Defendants reaped billions of dollars in revenues while they knew, or should reasonably have known, that they were causing immense harm to the State and its citizens," according to the lawsuit.CVS distributed 700 million dosages of opioids in Florida from 2006 to 2014, according to the suit. The lawsuit says one Florida town of just 3,000 people was supplied with 285,800 orders of oxycodone in one month by a Walgreens distribution center"...
Harps CEO Adds Chairman Title
SN: "Kim Eskew, president and CEO of Harps Food Stores, has been elected chairman. Eskew succeeds Roger Collins, who is retiring, Springdale, Ark.-based Harps said following its annual board meeting. Also, the Harps board elected three new members: David Ganoung, VP of marketing; Frank Ray, VP of HR; and Mike Thurow, VP of store systems. Collins has held the chairman’s title for the past 17 years and served as CEO from 2000 to late 2016. He started with the company in 1986 as VP of finance and CFO, and was promoted to EVP in 1995"...
OTHER NEWS OF NOTE: