In case you’ve missed it, now is not a great time to be in print media. In the US, weekday newspaper circulation has hit an all-time low of 40 million copies (down from 63.3 million in 1984) leading to (according to Paper Cuts) the shuttering of well over 100 local newspapers and the loss of over 20,000 jobs since January 2008.
And it’s not just newspapers suffering, even the once bloated September Issues of the glossy fashion magazines looked decidedly anorexic in 2010 having lost up to ¼ of their ad revenues. The general consensus is that even with aggressive moves into digital and exciting developments like the birth of whizzy tablet editions, ad revenues will never return to their pre-recession levels. This appears to be acknowledged in the 2010 Ad Age Magazine A-List (commentary via the Ad Age Outlook podcast) which, in addition to recognizing editorial savvy and great journalism, celebrates those publications looking beyond print and diversifying into other areas. For example, special praise is reserved for The Atlantic’s Atlantic Live events division which has attracted big name speakers to The Aspen Idea Festival and Future of the City.
Described by The New York Times as “the biggest flurry of e-commerce innovation since Amazon & Ebay” daily deal sites such as Groupon and Livingsocial (there are currently over 130 operating in the US) are taking America by storm. Groupon, the leading player in the category which only launched in 2008 projects its 2010 revenues to be in the region of $300-500 million. It operates in 65 markets in North America and 14 in Europe, has a global subscriber base of 13 million+ and is so in demand that it turns away 7 businesses for every 1 that it’s able to work with. Proof of the brand’s clout came in August when its promotion with Gap (to get $50 worth of clothing for the price of $25) was taken up by 440,000 customers and generated $11million.
Whilst group buying sites are not a new thing (Microsoft was behind a service called Mercata which folded in 2001), “the business model is at the nexus of the economic downturn and the rise of social media” (NYT): consumers are both motivated to seek deals and have the ability to quickly and easily share them with others.
But whilst Groupon, Livingsocial, Woot, Gilt and all the others have been phenomenally successful, they are not untouchable. Their business model is predicated on a large subscriber base and the credibility that they will be able to provide this base with compelling discounts on goods and services relevant to them. But they are not the only ones with large customer bases and they are certainly not the leading authorities when it comes to making recommendations – this is where the opportunity lies for media brands. They have influence and authority in individual cities or specific areas of interest and they’ve been offering recommendations on goods and services to their communities for years. As Vinicius Vacanti, founder of daily deal aggregator site Yipit blogged, “I bet what keeps Groupon up at night isn’t LivingSocial or the now 120+ other daily deal sites, it’s the media companies with authority and an established audience.” He goes on to offer lots of useful advice to media brands looking to do so here as well as discussing the various ways for media brands to approach the introduction of daily deals (co-brand partnerships, white labelling etc) here.
Other media brands are taking moves toward retail even further with the creation of exclusive product ranges and dedicated stores. The practice of licensing is nothing new, Playboy has been slapping its logo across worthless tat for years but a new breed of publishers is taking a more thoughtful approach to ‘merch’, seeing it as an opportunity to both further the publication’s values and aesthetic and create a product that will be genuinely valuable to its audience. Available via exclusive retailers such as ABC Home in New York, Esquire’s new home furnishings collection promises high-end pieces for the home and caters to readers who have “figured out his look and he knows where he’s going and what he wants to be.” Monocle have taken a co-brand approach to its highly curated line of retail goods. Partnering with the craft-focused brands it champions in the magazine, it has created an online shop as well as beautifully conceived concept stores in London, New York, LA, Tokyo and Hong Kong. This approach has also been adopted by influential menswear blogger Michael Williams who has partnered with some of the brands he features on his A Continuous Lean site to create an equally alluring retail offering.
Seen in this context, the rush to erect paywalls is truly damaging. Media brands need to encourage access to their content in order to engage potential customers and establish a clear and compelling point of view. It is this point of view which will lie behind the creation of a broader value proposition and a compelling product and service offering.