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Date: Wednesday, March 31, 2004
Time: 2:00 pm to 3:00 pm EST
Venue: Dr. Joe Webb/WhatTheyThink.Com Economic Outlook Phone Seminar/Webinar, sponsored by EFI
Topic: Economic overview and forecast, discussion of printing industry issues
The Census Bureau released its "business dynamics" data showing the changes that occurred in the economy from 2000 to 2001. For the broad definition of the printing industry (commercial, trade services and other related sectors), there was a decline of -1088 net establishments, and a decline in employment of -27,426. When they say dynamics, they mean it: there were 2,135 new establishments, outnumbered by the 3,223 closures. More than half of the decline in establishments was in shops with less than five employees. That is, at the time the shops closed they had less than five employees although they may have had more employees at another time.
It's important to remember that many of these closures and re-openings are more than just a “declining” industry. Many of them are companies restructuring, combining, or making ownership changes that require new business entities to be formed. It's often easier to just start a new business than to actually “merge” or “acquire” if you are small, especially if there are personal loans to businesses or family ownership issues. This is the market adapting to change, becoming more efficient at a new demand level, and that's a good thing. While business levels are obviously not enough to generate net new firms, this sometimes traumatic reconfiguration helps purge the industry of ineffective management and obsolete equipment. It's not pretty. But it's not disastrous, either.
I've become irritated about all of the grousing around oil prices being "the highest since 1990." Oil is a commodity subject to the interaction of supply and demand, and demand has been increasing, pushing prices up, as the global economic situation has improved. In fact, the same is true of nearly all commodities. While demand is subject to some cartel action, that cartel basically gets weaker in the broad picture from year to year. As far as those "highest prices since 1990," adjusted for inflation our rough $38 per barrel today would be $54 in 1990 dollars, so it's 30% cheaper now than it was then. We would need oil to go up 42% to equal those 1990 prices in today's dollars. This is yet another indication of how the compounding effect of inflation distorts perceptions over time, even if inflation is "low." Remember paying about $1.25 for a gallon of gas in 1982? Double that, and you get what the price would have to be today.
The real issue is that fuel-dependent industries planned on a different level of pricing than what actually exists. Where are the contingency plans? Where are the benefits of much-touted hedging and trading strategies? One of the benefits of planning is that management can adapt to changes in the marketplace with greater confidence and certainty. To hear all this complaining, one wonders how effective the planning has been in fuel-dependent industries. Is your company ready for a major change in prices of its basic inputs? If not, make sure that such scenarios are part of your planning process and that you have appropriate contingency plans in place.
Check out the link below—the "state of the industry" of the media. It looks at the new industry from an insider's perspective, but the site is packed with lots of economic and other trending data about the media business as a whole. It even has interactive graphs and tables. The site is extremely well done, an example of fine Web design and presentation. I highly recommend it.
Libraries are slowly adopting e-books, and kids soon won't be able to say "my parents couldn't get me to the library (because we were at the veterinarian removing my homework from my dog's stomach after my little brother spilled gravy on it)."
On the Web:
Technology provider, OverDrive, Inc.
A few weeks ago, I mentioned how scientific research is moving to the Internet quickly to eliminate publishing lag.
An obscure article in a Pennsylvania newspaper led me to the "Internet-First Publishing Project." Further links to Cornell indicated that the initiative is called "open access publishing," with the idea that full texts are available online, and readers can order on-demand copies of the works they want. The justification by Cornell can be found in the links below.
On the Web:
See the Cornell web site where these texts can be accessed
The obsession with ROI in marketing programs continues, as the short-term orientation of management becomes yet more entrenched. The reason this concerns me is that branding and other marketing initiatives take time to develop. Quarter-to-quarter preoccupation means that managers plant seeds and hover over them complaining that they're not growing. Sometimes they can spend so much time complaining that they forget to feed and water them.
The other issue is that the tools to measure ROI for marketing are just not that good and usually don't take into consideration the many factors and influences that lead to purchase, many of them over long periods of time. The Promotion Marketing Association is attempting to develop tools that can be used in their work. It is essential that someone representing our industry get on board and plugged into these efforts, not to influence them, but to get a heads-up on how things are going. Some links are below.
Some links to the Promotion Marketing Association:
Some studies worth downloading perhaps
US advertising expenditures are up, a sign of loosening corporate budgets. Cable TV, Internet and newspapers are among the beneficiaries. The news reflects the changing media mix and the dizzying array of choices media buyers now have.
As a corollary, BtoB Online had an interesting profile of major ad agencies and the directions they are taking.
Sure, we can discount this study because it's produced from a "tainted" source—a survey sponsored by an e-mail marketing company, but it was also sponsored by B2B Magazine and the CMO Council, a group which claims to have "more than 400 technology companies currently represented on the CMO Council accounting for well over $400 billion in aggregated annual revenues." View it a little skeptically, like all research, but it does have a lot to say.
According to Direct magazine, where I first saw the account, the study claims that "digital marketing has high strategic importance to nearly two-thirds of marketers...[with] over 75% of them plan to increase spending... 40% of those who forecast spending for 2004 said they would spend more than 20% of their marketing budget on digital marketing, which includes e-mail campaigns, Web site interaction, online advertising and e-newsletters...87% of B-to-B marketers are using digital marketing techniques for lead generation... nearly 60% are using it for Web site traffic generation and just over half are using it for customer education." Interest in digital marketing has grown because of the perceived reduced costs, and the biggest obstacle is considered to be the quality of e-mail lists. The report also said that they would "like to improve online analytics" (there's that ROI thing again!) and multi-channel integration (translation: make it work better with the other media they use). Gee, there's an opportunity, solving people's problems. Any printers out there working on this problem for their customers?
On the Web:
Hearst Magazines is now making its Smart Money available in digital form as an incentive for new subscribers. The company supplying the capability is Texterity in its "published Web format." This makes the magazine more similar to a Web site than Zinio's, which is more like a Web-enabled magazine. The companies are obviously coming at this from different angles, and it's quite interesting to see the dissimilar implementations.
On the Web:
My favorite Internet browser has been updated, with some neat new features. Avant Browser is free (runs on top of IE6) and has a great ad blocker. Now you can highlight words on a web page, right click, and open a Google search. It includes lots of other neat stuff as well, such as the feature that lets you create aliases for web addresses (like letting you type in “wtt” when you want to go to www.WhatTheyThink.com). I have used this browser for about two years, and the whole family loves it. When it asks if you want it to be the deferred browser, click “no,” I've had some occasions where websites in e-mails or documents won't start Avant Browser like they should. Occasionally you may have to turn the pop-up blocker off for some sites if you notice something you click on doesn't appear. But overall, this is so much better than IE that you realize you can't do without it. I find new features almost every week. It's free, and if you like it, you can send in a donation to its programmer.