Publishing Without Profits: What's Behind the Content Marketing Craze?

American Express web site for small businesses

Since when do insurance company web sites look like this?

Though the publishing industry isn’t exactly booming these days, the hottest trend in marketing is for non-publishing companies to act like publishers.

Consider that Citibank is posting articles like “5 Healthy Snacks Your Kids Will Actually Eat” – not what you expect to find on a bank’s web site.

Or that retailers like Walmart, Target, and Walgreens recently launched or are launching magazines primarily to enhance their brands.

Or that content marketing – AKA brand journalism – is taking a growing share of what non-publishing companies are spending on marketing.

It’s no accident that one of the leading books on the trend is Content Marketing: Think Like a Publisher. It explores how non-publishing companies can use “words, images and multimedia to systematically enhance consumer engagement and conversion rates.” (Note: It does not address such key publishing tactics as stating inflated prices on a ratecard, debating whether print is dead, or blaming all problems on the circulation department).

Many content marketers follow the 4-to-1 rule of thumb: publish four non-promotional items for every one that mentions the company’s products or services. But some eschew any promotional copy and focus only on establishing their companies as “thought leaders”: You have to look closely to see who is sponsoring sites like OPEN Forum (American Express), HouseLogic (National Association of Realtors), or especially Brighter Life (Sun Life Financial).

National Assoc. of Realtors site has a Target ad.

Publishing Executive just published in its January 2013 issue my article, The Content Marketing Craze: 7 Ways Publishers Can Fight Back, which explores how traditional publishers can respond to the challenges presented by so many companies vying for our readers' attention.

But why are profitable non-publishing brands emulating Newsweek – pouring millions of dollars into creating content without much of a revenue model? Here are seven reasons content marketing, which has been around in various forms for decades, is suddenly booming:

1. The Web: In the pre-internet days, freedom of the press applied mostly to those who owned a printing press. Now everyone can be a publisher. 
2. Social media: Who would think of turning to an insurance company to read about The Year’s Most Inspiring Athletes or a deodorant to see Seriously Dangerous Snowboard Stunts? It doesn’t matter. With Facebook, Twitter and other social media now rivaling search engines as the means for discovering information on the Web, relevant content can find an audience that wasn’t even looking for it. 
3. Search engines: Algorithm enhancements have made search engines less prone to being tricked by keyword stuffing, link baiting, and other gimmicks. Now they look for quality, which means real people spending time on a page, sharing it with others, and linking to it. Acting like a publisher has become one of the best ways to get “Google love.” 
4. Consumer changes: With so much information at their fingertips, both consumers and businesses are doing more research these days before making purchasing decisions. When considering potential vendors, I often look at their blogs, news releases, Twitter feeds, etc. to get insights on their expertise and mindset. 
5. Banner blindness: Ads in print publications tend to be part of the reading experience; they’re noticed without being intrusive. But, unless they're really obnoxious, Web ads are easier to block out, causing many brands to look for more engagement with consumers rather than just shouting “Buy!” at them. 
6. Measurability: Determining whether branding efforts are working is a notoriously difficult process. After all, what value did the U.S. Postal Service gain from the $30 million or so it spent sponsoring Lance Armstrong and his teammates? (Maybe USPS should get Lance to do ads promoting mail-order drugs.) At least with content marketing, companies have metrics like page views and social-media shares that enable them to figure out which content reaches the most people. 
7. It’s hot: "Clients come to me saying they need a content campaign -- that's a solution. When we ask, ‘What's the problem?,' often it's that every other CMO [Chief Marketing Officer] has one," Kyle Monson, founder of a content strategy agency, told Ad Age recently. Bob Hoffman, a content-marketing skeptic who blogs as “The Ad Contrarian”, puts it more succinctly, "There's no bigger sucker than a gullible marketer convinced he's missing a trend." 

Footnote: My friend BoSacks has some interesting commentary on this article, including the question of whether "content marketing" has become such a broad term that it no longer means anything. It's a valid point: I've seen the term applied too broadly, including to what was basically just an ad campaign. I'm defining the term very narrowly, to mean non-promotional articles, graphics, videos, and other content published by non-publishers.

For other Dead Tree Edition commentary published in conjunction with my "View from the Tree" columns for Publishing Executive, please see:

• Lessons About the New World of Publishing from an Unlikely Source  
• Printed Magazines or Digital Magazines: Do We Have To Choose?  
• Mailers Getting Cold Feet About Postal Service Cuts  
• Censor Me: The Magazine Slogans That Were Too Hot for Publishing Executive

 

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So Far, FSS Is A Step Backward, USPS Data Indicate

The Flats Sequencing System is costing the U.S. Postal Service more than it is saving, information submitted by USPS this week indicates.

USPS's response to a question from the Postal Regulatory Commission showed that FSS has pushed up the costs of mail processing far more than it has decreased delivery costs.

USPS invested more than $1 billion in the huge FSS machines to automate the labor-intensive process of handling catalogs, magazines, and other flat mail, but so far the results have been mixed at best. Meanwhile, the agency continues to seek special rate increases on some types of flat mail, such as Periodicals, on which it claims to be losing money.

The cost of delivering Carrier-Route-sorted Standard-class mail rose 2.32 cents per piece, from 16.54 cents to 18.87 per piece, in just two years almost solely because of a 48% increase in mail-processing costs, USPS told the PRC.

"An examination of mail processing costs by cost pool shows that the bulk of this rise is due to FSS sorting. Specifically, FY 2012 FSS sorting cost per piece for Carrier Route is 1.84 cents while the amount for FY 2010 is likely fairly small [because few FSS machines were operating then]," USPS wrote.

"Delivery costs (both city and rural carrier) have declined by 0.06 cents
[from 10.98 to 10.92 cents] per piece." the agency added. "Included in this overall change in delivery cost per piece is a decline of 0.49 cents per piece for cost segment 6 in-office city carrier labor costs between FY 2010 and FY 2012, despite a 5.9 percent rise in city carrier cost per workhour. This likely reflects the benefits of FSS sorting."

Not rocket science
In contrast to carrier-route pieces, the mail processing cost of non-carrier-route Standard flat pieces has risen only 6% in the past two years, according to USPS data. The reason for the contrast is not rocket science.

For ZIP codes not served by FSS, carrier-route bundles are nearly ideal and therefore result in the lowest rates, except for saturation mailings. Such bundles move through the postal system without being opened until they reach the letter carrier who will actually deliver them. Bundles containing pieces for multiple carrier routes or ZIP codes require additional handling and are therefore more expensive for the Postal Service.

But for ZIP codes served by FSS machines, carrier-route bundles are of little benefit to USPS. Like other bundles, they have to be opened and fed into a machine. In fact, the ideal bundle for FSS is supposedly four to six inches thick, many times larger than the typical Standard or Periodicals carrier-route bundle.

The big benefit of FSS is at the delivery units. When the process is working, a carrier receives all flat mail in delivery sequence, which cuts down on the time they spend preparing the mail.

USPS has not broken out mail-processing costs for Periodicals in the same way as for Standard. But the two mail classes' pieces and carrier-route bundles are so similar that the mail-processing costs for Periodicals carrier-route copies most likely have seen a dramatic increase as well.

And with carrier-route Standard and Periodicals pieces probably representing more than half of all FSS mail, it seems unlikely that FSS is saving enough on delivery costs to counter the system's impact on mail processing.

Related articles:

• FSS Is Increasing USPS's Costs, Expert Says: "There must have been far too many manhours spent on a system that was supposed to be highly automated," an industry expert wrote a year ago.
• FSS Machines Running Far Slower Than Planned  
• 8 Reasons USPS Productivity Is Declining: The Employees Speak Out

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I Knew I Was in the Production Department When . . .

I toured a publishing company recently that had no signs marking the various departments, but I didn't need a sign to know when I was among the folks who buy paper and plan print projects.

Most departments looked pretty much the same -- people sitting at computers. OK, you could spot the designers because they had Macs and big monitors, but otherwise the differences were subtle -- a bit more phone chatter in ad sales, more arguments in editorial, more gossip in circulation.

As an environmentalist, I noticed that every department had recycling bins. And whether people worked mostly in old media or new media, they used those bins the same: as garbage cans.

Then I rounded a corner and saw it -- a recycling bin with a cover that had two holes, indicating it was for bottles and cans. And it actually contained only bottles and cans!

"For paper only"
Nearby was another recycling bin with a sign saying, "For paper only." And people were actually obeying the sign!

I knew right away I was in the production department. (Some of my colleagues in the industry like to call it the operations department because these days they're also doing things like preparing mailings, building web pages, or selling reprints. And some like to call it the manufacturing department, which really throws off the people who cold-call on behalf of factory consultants, only to find that American magazine publishers outsource all of their manufacturing.)

Anyway, this was not an isolated incident. I consistently find that the people in the industry who really care about environmental issues are the ones who buy paper or put ink on it.

They're the only ones you'll hear talking about sustainable forestry, carbon footprint, and the differences between pre-consumer and post-consumer waste (a distinction unique to North America). They understand that forestry industries can benefit the environment, or harm it, and they often wrestle with how to make their companies' paper purchases and other practices more sustainable.

The "print is dead" gang
Meanwhile, the "print is dead" types ignorantly assume they're saving trees, oblivious to the environmental footprints of the web and digital devices. And they rarely lift a finger to make their work any greener.

A similar dichotomy shows up in government. It's no accident that the U.S. Postal Service, the nation's primary distributor of printed pieces, has been far more active on the sustainability front than any other federal agency. There's something about handling printed products that makes people and organizations more environmentally aware and inspires them to take responsibility

As I noted last week, the dichotomy occurs even at Hearst Corporation, arguably one of the world's greenest large companies. (See Killah in Manilla: Hearst's Green Reputation Tarnished by Subsidiary.)

Hearst's traditional publishing people have meticulously documented the fiber sourcing of the company's magazine paper, pressured paper suppliers to use more sustainable forestry, led industry efforts to make the supply chain greener, and even installed a worm farm at one office. But then an all-digital subsidiary called Manilla ignorantly claimed that its involvement in the "Paperless 2013" campaign will "help improve the environment."

You wanna bet which part of Hearst -- the production department or Manilla -- makes the best use of its recycling bins?

Related articles:

• The Takeover of Paperless 2013: How a grassroots guerrilla army is fighting back against the greenwashing sponsored by Manilla, Google and other companies.
• Who is Really Behind #Paperless2013?: Can the anti-greenwashing forces claim partial victory? 
• OK, Johnny, Now Greenwash Your Hands: Another anti-paper effort based on false premises. And speaking of drying your hands, don't miss this gem: Increased Incidence of Gastroenteritis and The Flu - Could the Solution be Hand Drying With Paper Towels?

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Killah in Manilla: Hearst's Green Reputation Tarnished by Subsidiary

Hearst Corporation has earned a reputation as a truly green company by systematically measuring, revealing, and minimizing its environmental impacts – until now.

A subsidiary of Hearst – one of the world’s largest buyers of publication papers – is among seven corporate sponsors along with Google of the controversial Paperless 2013 promotion. That campaign has come under criticism (See The Takeover of Paperless 2013) for unsubstantiated claims that organizations become more environmentally friendly when they switch to cloud computing and other paperless processes.

Manilla, a Hearst unit that offers an online bill-management process, is not just guilty of greenwashing by association. Manilla’s CEO said this month that the company’s sponsorship of Paperless 2013 is “truly representative of Manilla’s overall mission ... to help improve the environment by reducing the overall use of paper.”

Manilla ad

Like Paperless 2013, Manilla presents no evidence that its processes help the environment. In fact, its web site reveals nothing about its environmental footprint or programs. That’s a far cry from the practices of the parent company, which owns such leading media brands as Good Housekeeping, Cosmopolitan, Road & Track, A&E Network, and the Houston Chronicle.

Hearst doesn’t just claim that its headquarters “is the most environmentally friendly office tower in New York City history.” It underwent the stringent process of having the innovative building LEED-certified with a Gold rating.

Hearst paper policies

Dead Tree Edition cited Hearst in 2009 as one of “the real leaders in making U.S. magazines greener” because of its multi-faceted work on such matters as encouraging sustainable forestry and promoting the recycling of magazines.

Documentation and transparency have been hallmarks of Hearst’s efforts. When it set up the Hearst Sustainable Forestry Initiative in 2004, it says it found that 38% of the fiber for its magazines was from certified fiber.

“By modifying our purchasing strategy and working proactively with our suppliers, we were able to increase this level to 75% by December 2009. We continue to have a goal of 80%,” says the company’s annual “Being Green” report. It also says it is not averse to “changing mills or suppliers when certification percentages and targets are unacceptable.”

Methinks that Manilla’s vague, self-serving claim about helping the environment does not represent the new Hearst philosophy but is rather a case of the startup division not absorbing its parent's culture. Manilla could learn a few lessons from its not-so-paperless sister companies about business practices that promote healthy forests and other measurable environmental benefits.

Methinks, to paraphrase a Manilla ad, that when it comes to environmental claims Manilla needs to get its “s**t together.”

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The Takeover of Paperless 2013

A group of companies including Google recently created the Paperless 2013 campaign to promote the use of online solutions, but unsubstantiated environmental claims caused the program to backfire.

The campaign went viral in the past few days, with hundreds of Twitter messages a day using the hashtag “#paperless2013.” But the tweets are running roughly 10 to 1 against the campaign, with most criticizing it for implying that digital media are always greener than paper-based media without providing any facts.

Welcome to a protest tool for the 21st Century – the hashtag takeover. I didn’t invent the concept, but I think I’m the first to use the term (which is ironic given my lack of social-media savvy. My Facebook page has cobwebs from neglect.)

The tactic sprang up in June as one of the grassroots responses to Toshiba’s ill-fated No Print Day. Toshiba was using "#NoPrintDay" to promote its gimmick, but defenders of print turned that hashtag into a
rallying point for anti-Toshiba efforts. (See 9 Lessons From Toshiba's No-Print Day Debacle and Toshiba's No-Print Day As Popular As a Turd in the Punchbowl for the story of how Toshiba backed down.)

Two Sides brought the Paperless 2013 greenwash to light this past Tuesday when it sent an open letter to Google's
CEO, challenging the campaign as "another example of a self-interested organization using an environmentally focused marketing campaign to promote its services while ignoring its own impact upon the environment." The letter cites chapter and verse about Google's own environmental impact.

Deborah Corn, a ringleader of the opposition to No Print Day, rallied the troops this time around with her article, Going Guerrilla Against Google's #Paperless 2013 Campaign. (Yes, she quoted me accurately, including the key point about sending a message to corporations: "If you make false environmental claims about electronic media always being greener than print, expect backlash.")

Here's how the hashtag takeover works: People supporting (or paid to support) the Paperless 2013 campaign have been sending out tweets beginning “My New Year’s resolution is to go paperless in 2013” and including “#paperless2013”. The “#” turns the phrase into a search term that’s supposed to make it easy for people to find fellow pledge takers.

But those who used the hashtag were barraged with replies pointing out that the campaign is misleading, demanding data to back up the vague claims, or highlighting more objective assessments of when to use digital or print media.

Searching Twitter for #paperless2013 has turned into a wonderful way to connect with others who object to the demonization of print and to discover articles and resources about how to make green media choices, including this great infographic: http://pxandpt.com/. It's also become a forum for exploring what else can be done to fight paperless-is-good greenwash: A hashtag takeover is an effective opening salvo but it won't win the war.

If you want to get in on the action, here's a hint: When "Mr. Greenwash" tweets a message bragging about going paperless, don't just hit "Reply" and write your response. Put a colon, period, or other character at the beginning (so that, for example, it starts ":@Mr. Greenwash") and include the hashtag "paperless2013" (no spaces) to ensure your message is seen by as many people as possible.

Related articles:

• Google Using Blatant Greenwash To Promote New Catalog App  
• Going Paperless Doesn't Mean Going Green, The New York Times Proves 
• 10 Questions About Toshiba's No-Print Day   
• OK, Johnny, Now Greenwash Your Hands

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How About a NewPage-Quad/Graphics Merger?

After finally emerging from bankruptcy protection, with a much lighter debt load, NewPage Corp. clearly has merger on its mind.

Why else would North America’s largest maker of coated paper choose as its chairman Mark A. Angelson, the U.S. printing industry’s Great Consolidator? And why else would he accept the job?

Only four months ago, the man who led the rolling up of such major printers as Worldcolor, MooreWallace, and Banta quit an apparently successful run as deputy mayor of Chicago so that he could lead “a somewhat less frantic life.”  It seems unlikely that he took hold of the NewPage reins simply to be caretaker of a stable company in a declining industry. As I’ve noted before, even his initials are M&A.

Further consolidation of the paper industry is inevitable, but could Angelson & Co. have something more radical in mind? Like maybe a marriage with a printing company? Like maybe Quad/Graphics, the continent’s #2 printer?

This is pure speculation, and it might be totally crazy, but hear me out:

Natural allies; failed alliance
The idea that the two Wisconsin-centric companies are natural allies has been around for years. Quad, according to several sources, proposed an unusual alliance with a NewPage predecessor a couple of decades ago:

It would build a new printing plant (this was back when Quad and the printing industry were growing enough to need new plants) next to an existing Consolidated mill. Raw logs would enter one end of the facility and come out as printed catalogs and magazines at the other.

Consolidated declined, supposedly because it feared antagonizing Quad’s competitors. The two companies ended up having a fairly public falling out, with Quad reportedly buying no paper from Consolidated for several years despite the obvious logistical advantages of mill-to-printer shipments of only 100 miles or so.

Recent history is even more significant. Only seven months after taking the helm of Worldcolor following its exit from Chapter 11, Angelson helped engineer a takeover by Quad. He reportedly developed a close relationship with Quad Chairman & CEO Joel Quadracci and served on the combined company’s board to help with the transition. He left the board in April 2011 when he agreed to take the job in Chicago Mayor Rahm Emanuel’s administration.

Where are the synergies?
A mill/printer alliance could remove some of the marketing and transaction costs of paper, provide the printer favorable pricing, and enable the mill to run more efficiently.

Printers are also better shippers than paper companies. Shipping is a necessary cost for paper mills, but a core competency for major printers; Quad has its own trucking company.

Paper machines and web printing presses have some similarities. A couple of paper engineers have told me they could teach printers a thing or two about maintaining proper tension of the paper web.

It’s also possible a combined Quad-NewPage could reduce its income tax bill by millions of dollars via Cellulosic Biofuel Producer Credits, better known as Son of Black Liquor. NewPage has not benefited from that program credits because it has not had any taxable income to offset.

I don’t pretend to know whether these potential synergies are enough to justify a merger between a paper company and a printer in general, or specifically between NewPage and Quad. But after its 16-month sojourn in Chapter 11, NewPage will definitely be worth watching.

Footnote: Like some other U.S. paper companies, NewPage in recent years has derived more profit from government handouts like the original black liquor tax credits and Son of Black Liquor than from actually selling paper. So Angelson’s ties to the Obama Administration, via Emanuel, may be another feature of his resume that was attractive to NewPage’s new owners.

Related articles:

• Printing's New Odd Couple Leaves Some Questions Unanswered
• Quebecor World: Has the Stalked Become the Stalker?
• NewPage's Fraudulent Deals Started in 2007, Creditors Claim  
• Did Verso Come To Purchase NewPage Or To Bury It? 
• NewPage Finally Says the B Word

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