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Initial jobless claims were down, at 298,000, with the four-week average now at 317,000, which still implies growth in employment. Remember that last week Fed chairman Ben Bernanke hinted at labor shortages being an inflation concern to them. Durable goods orders were up 3.1% in June and have been up four of the last five months.

Banta's sluggish quarter and reorganization is a sign that changes in the print marketplace always end up being reflected in industry structure. The question is whether the restructuring is in reaction to a market change or in anticipation of it. Banta stated that growth was slowing and that the company was consolidating five printing divisions into two. As print demand changes in volume, organizations have to change as well. What's more important, however, is for companies to adjust to the changing nature of that demand. The way print is used today is different than the way it was used two years ago, and it will be different again two years from now. Since it takes time for organizational change to transition and work well—anywhere from six to 12 months—all changes have to be made assuming a certain market condition of the future. Banta has usually been rather astute in this regard, so it will be interesting to see how this plays out and if others follow.

Of greater concern is the release by NAPL of its June Printing Business Index, which decreased to “52.8 in June from 55.6 in May and 59.9 in March, its lowest level in three years.” This index generally shows the condition of our industry's “best and brightest” printing firms, and has been rather strong despite broad-based declines in overall industry shipments, indicating that well-run firms have been distancing themselves from their weaker brethren. The NAPL data may indicate that June's aggregate printing shipments may be weak, as corporations continue to cut discretionary spending to balance rising costs of energy and other increasing expenses. We'll get Commerce Department data for June's commercial shipments, and a revision of May’s data, next Thursday.

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The New York Times is closing its plant in Edison, NJ, reducing the size of its printed sheet, and cutting its workforce. Things do not appear to be going well for the industry icon. The changes will be complete by April 2008. It will take almost two years, therefore, to fully benefit from the restructuring. I wonder what the newspaper business will be like by that time—it's easy to see how they're thinking.

Newspaper revenues are changing to include more online revenue. This article includes this paragraph that sums things up: “sluggish advertising, declining circulation and rising newsprint costs. But a small ray of hope emerged as growth in online advertising, while still a small portion of revenues, looks to be picking up speed.” I wonder what kinds of forecasts they were believing.

Advertising Age's editor muses on what it will be like if and when the Wall Street Journal discontinues its print edition. It's not likely soon, but WSJ is in the middle of a rather deep strategic review, and the idea is probably on the table.

The Association of National Advertisers recently released a report about accountability in advertising:

• 32% of marketers said they are satisfied with their ability to measure and act on ROI to improve business results, up from 19% in 2005.
• 20% of senior-level marketers said they can measure ROI, but cannot act on it.
• 36% of respondents reported that their marketing accountability efforts include the finance division and/or a cross functional team.
• 24% described their marketing accountability efforts as limited to the marketing department
• respondents reported that senior executives in their company find metrics such as brand awareness and market share more important than metrics such as customer lifetime value
• 65% of the respondents noted that understanding the sales impact of marketing is important to senior executives

This report is yet another warning that commercially printed materials must prove their value in stimulating sales, decreasing costs, or positively affecting other applicable metrics to retain its viability in corporate communications.

McKinsey has released its quarterly global survey of executives, which says that their confidence in the global economy has “fallen significantly in the past three months.” There are still plans to hire more employees. This is consistent with the global indices issued by the Institute for Supply Management.

The Magazine Publishers Association is spending millions on an image-building campaign, yes, millions, on one of the silliest concepts I have seen in quite a while... “Captain Read”... pronounced “red” ... because magazines are “read” by so many people. Far better efforts are made by the newspaper industry association Newspaper Association of America (NAA), which is spending far less than the MPA, but providing better information to advertising buyers as well as assisting newspapers in understanding their changing marketplace, and helping them do something proactive about it.

In the association's recent issue of Presstime, there was a very good article about how newspapers are reshaping themselves as multimedia operations, and why it's urgent to transition to such a business.

They also put the change in perspective in the very same issue, in a compelling column about how the transition to new media is not going as quickly as many think.

This brings to mind my comments last week about how the economies of scale are relative to profitability, where each new dollar of revenue costs less and has greater profits. I also explained how the loss of one dollar of sales has to absorb more fixed costs, and has a disproportionate effect on profits.

The reason many big newspapers are having so many problems is that they have tremendous fixed costs. So even a small decrease in revenues affects the bottom line disproportionately, and rather immediately. If they lose 10% of their revenues, for example, it may decrease their profits by 30%, unless they are able to act quickly and decisively. The recent story about The New York Times closing its Edison, NJ plant (above) is a good example. Because of various union contracts and other commitments, the full closure cannot be made until April 2008. This means the Times has to endure those fixed costs for quite some time, and will end up cutting elsewhere in the meantime. The more adept newspapers have been the non-dailies, which are privately held and have been a relatively untold story for the past few years. Ah, but those are small businesses and they don't matter, I guess.

Strangely, Barrons reports that insiders are sellingNYT stock, but Morgan Stanley is buying. They're trying to gain enough clout to change the financing of the company, and who knows what else they may have up their sleeve.

Who says the media mix isn't changing? Time, Inc. has killed Teen People, but the title will live on as a website. Hachette Filipacchi discontinued Elle Girl earlier this year. Media choice reflects the preference of the target audience. What a concept!

Canada's Interactive Advertising Bureau released information and a presentation about the rise in use of new media there. It contains an important quote about the market positioning of new media: “Advertisers have done a great job of responding with investment that matches the multitude of research studies which have pointed to huge leaps in consumer passion for, and time spent with the Internet channel...when you consider that online is really the only media that can follow the consumer through the entire purchase cycle—from building product awareness and consideration, to allowing in-depth product research and even product purchase—it just makes sense.”

Speaking of new media, Margie Dana of the Boston Print Buyers has had a really hot pen of late. Her most recent column about printers who have added new media capabilities caught my attention. She wrote, “Companies-formerly-known-as-printers who use online technologies to complement their ink-on-paper offerings are helping the industry inch forward...Consider the pURL...It's a fairly new technology that integrates printing with the Web. I know a couple of local firms who offer pURLs as a service, and for a more detailed explanation of this technology, I spoke with David Trombino, CEO of TecDoc Digital Solutions in Hudson, MA..” Margie always has a good and proactive “feet on the ground, reach for the stars” message. You can read her past columns at the organization's site.

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