5 Factors That Make It Harder to Break Into National Business Media

Securing national business coverage has never been easy. In preparing to talk to a prospective client recently, we thought it would be helpful to explain why it's gotten tougher -- even before you get to the client.

Clients always want to know about relationships with the media but these days, even with a strong knowledge of the media and good relationships with reporters, there are other challenges to consider:

1. Shrinking news rooms. Newsrooms have seen dramatic cutbacks and buyouts. Before Feb. 2019, there were more than 1,000 newsroom job cuts in 2019. There is real concern that some newsrooms are ghost newsrooms, with not enough reporters trying to fill up the newshole, and often relying on syndicated content. So it's harder to find reporters these days.
2. Increased demands on reporters. Concurrent with job cutbacks, the demands on reporters to produce and generate views has increased tremendously. Reporters typically have to file more stories, across different formats (you can read a news story on a radio station's website or watch a video on a print newspaper's website) all while posting content across social media to drive traffic back to the news organizations' website. That means reporters have to think harder about whether they'll even take an interview because of everything else they have to do as part of their jobs.
3. Some print outlets have reduced their publication schedule or size of their print editions. Forbes, Fortune, Fast Company, Inc., Entrepreneur and other prestige publications have reduced the number of issues they publish annually. Fortune used to 25 issues per year; in 2009, Fortune decreased the number of issues to 18. In 2019, it currently publishes 14 issues a year. Forbes published 22 issues in 2010 and current publishes 14 per year. Entrepreneur published 12 issues per year in 2016 but cut back to 10 in 2017 (sorry Feb. & Aug.). Meanwhile, some outlets have reduced their page size so there's less space per issue for news. (A client recently asked about taking out an ad in the Boston Globe business section and we had to tell them that there's rarely any advertising in that section.) Fewer issues and smaller space means it's harder to get ink. There is, of course, still opportunities for online coverage but we still have to deal with fewer reporters with more demands they have to handle.
4. Reporters are harder to contact. We've already established that reporters are busier than ever, But they're also harder to reach than ever. There are more freelancers who regularly contribute to a specific news outlet without being an actual employee. That means you can't reach them by phone through the publication's main number. There might not only be no number to use to call those reporters, but increasingly some of the newer digital news sites themselves don't list their phone numbers -- other than for advertising. We used to be able to follow up by phone and by smiling and dialing but that's less possible these days. For a recent client project that targeted advertising/marketing reporters, we found that fewer than half our list included phone numbers; of the ones who had phone numbers listed, 90 percent were the organization's main number, and the dial-by-name directory did not include the name of the reporter (even if they were staff reporters). By the way, of the 10 percent who did have a phone number we could reach, their voicemails were full and did not take new messages. (This is without pointing out that reporters -- across the political spectrum -- are as distracted as the rest of us by the Washington, DC news.)
5. Tech reporters at national business media are more interested in Facebook, Apple, Amazon, Netflix and Google (aka FAANG of the Big Five), Microsoft and Twitter but not as interested in B2B technology. The products they seem most interested are smartphones, virtual assistants (i.e., Alexa); the issues that interest them are privacy, security, crypto and blockchain but not the underlying business tech that supports those products or issues. We know that cloud computing is hot but that doesn't mean reporters at national business publications -- the Journal, Times, Wired, Bloomberg, etc. -- are able to cover a company doing well in cloud computing. The fact is that those reporters are more interested in business issues than in tech issues, and at the same time, it's hard to sell B2B tech via articles in those publications. (Partly that's because it can be much more complicated for businesses to adopt new technology, as Walt Mossberg, the legendary Wall St. Journal tech columnist, told me more than once.)

We know this list is something most clients won't like reading -- we didn't like it ourselves but we try to give clients realistic assessments -- so we  will tackle some ways to get into the national business media in a follow-up article.

In the meantime, let us what you think of these factors.

Forbes' D'Vorkin's 11 Observations about the New Business

I don't always agree with what Lewis D'Vorkin writes in his column about the confluence of media and journalism in the digital age, but he's always worth reading. Sometimes his column is all #humblebrag about how smart Forbes is -- actually, based on a very unscientific survey, most of his columns are humblebrags. 

But his current column, "Inside Forbes: 11 Realities And Observations About The News Business, Like Them Or Not," is definitely worth reading for the following observations. (I'm not going to repeat all 11 items -- go read the column for yourself -- I'm just pointing out those I find most significant, and including some of my observations based on D'Vorkin's.)

1. Content needs to be mobile-friendly and easy to consume -- but much of it is not. One problem is that when you click on a website on your mobile, often you'll get a pop-up ad (Forbes does this to, by the way) that you can't exit from because the form factor doesn't let you scroll easily to find the X. That's annoying and a problem.
2. Ad-blocking software will get more popular -- a trend we didn't really address for 2016, but I tend to agree. The rise of ad-blocking will hurt online ad revenue that media properties can generate and depend on -- this is will lead to lower revenues, layoffs, and more media properties being shut down. Oh, and higher subscription fees for those media outlets that have a paywall.
3. Facebook is not just a social network. It is a media play, and other sites' traffic rates are declining because people check out the headlines and comments on Facebook without clicking through. Again, that will affect online ad rates.
4.  Lest you think Facebook is unstoppable, it is facing stiff competition from messaging apps like Kik, Snapchat and Whatsapp.
5. A lot of the media sites (and quasi-media/e-commerce sites like Refinery29) that are doing well are targeting women. That says something for companies looking to target customers.
6. Death of Page Views -- which even D'Vorkin admits has been a prediction that people have made for years now. But this time, it's different because there are new data and engagement possible via mobile.

Anyway check out his article.

What the Selling of Forbes Tells Us about the State of Business Media, Part II

(This post originally appeared on CommPro.biz: http://www.commpro.biz/investor-relations/selling-forbes-tells-us-state-business-media/. The companion piece can be found here)

Forbes Media, publisher of Forbes and other magazines, is running into roadblocks as it seeks to sell the company. Working with Deutsche Bank, Forbes was pursuing international companies to purchase one of America’s premier business publications. The problem: Germany’s Axel Springer SE says it is no longer involved in the bidding process while Singapore’s Spice Global Investments Pvt has “removed itself from the process” and China’s Fosun International Ltd. hasn’t held active talks for “some time,” according to a recent Bloomberg article, a Forbes competitor.

At the time when bids were due, New York Times media columnist David Carr, provided some insight in a column entitled, “Foreign Buyers Eying Forbes Magazine, a Chronicler of the World’s Wealthiest.”

Given the limited interest in acquiring a well-known global brand, here are some lessons learned, gleaned from the article and our experience:

• Establishing a strong brand is important but outsiders may not find enough value in it. Unquestionably, Forbes has a strong presence and brand awareness, including its annual Forbes 400 issue in October. Its journalism is respected and the magazine and its website continue to be relevant. But brand may not be enough – certainly at the price Forbes’ current investors and family are searching for. It may be worth noting that McGraw-Hill sold BusinessWeek to Bloomberg for a reported $5 million along with the assumption of $10 million in liabilities in 2009; and Newsweek, a once equally strong media property, was sold for $1 and the assumption of $40 million in liabilities in 2010.
• Standalone magazine companies are at a disadvantage to conglomerates that can spread costs and profits across a family of magazines, according to Carr. For the most part Carr is right — but Forbes actually publishes several other titles — ForbesLife, Forbes Europe, Forbes Asia as well as 29 international editions. (It’s probably not a good time to purchase advertising in Forbes Russia, Forbes Ukraine.) Forbes also runs a very popular website (more on that below) and RealClearPolitics.com family of website. Our point is: it’s not just publishing a range of publications — it’s publishing magazines that reach a range of readers. After all, if you put all your eggs in one high-value Birken bag, when advertisers pull back on your demographic, you could get hit 29 times.
• Sometimes selling isn’t a matter of making money but in preventing additional losses. The estimated asking price for Forbes is between $250 and $400 million. Elevation Partners paid $264 million for a minority stake — so their portion is likely underwater. Carr says the Forbes family is unlikely to make money from the sale. The question becomes: why sell? Seems clear that the reason is that it continues to be tough for media companies to build value.
• The value shoring up Forbes is not its popular website — but its conference division. The publication is probably generating tons of revenue from its growing number of conferences, including luxury cruises offering insights and access to top stock pickers. Conferences have re-emerged for Forbes and other publishers as a profit generation tool. Conferences may have been a difference in the valuation of BusinessWeek for $5 million (and the assumption of debt) when it was acquired by Bloomberg. The same for Newsweek, which had no conferences and was sold for $1 and the assumption of debt. The bottom line lesson: perhaps leverage a successful conference series and turn that into a multimedia property (which is what TED is doing).
• Forbes could generate more money by establishing a paywall around its content. Carr makes the point that others news outlets — including the Times and Wall St. Journal — have successfully boosted revenue by establishing paywalls around their content. Yet Forbes.com aggressively promotes the website in a bid to generate views that can translate into higher revenue. It has been very successful in developing a community of columnists (many of them people trying to position themselves as thought leaders). The bottom line here: there’s still no single, accepted way to generate sustainable revenue online — neither free access (and higher revenue from advertisers) or paywalls (and subscription fees from access) are really replacing print advertising revenue that will never return to pre-mobile/digital levels.
• Circulation is holding steady but it may not generate steady revenue. Last year, Forbes was offering print subscriptions for $10 — that’s a steep discount from prior years. Keeping circulation high is important to advertisers (and the amounts you can charge them) but discounting clearly hurts profits. And constantly discounted subscription offers tell advertisers the circulation figures may be clogged with subscribers who don’t spend much time reading the magazine.
• Forbes is very creative in finding revenue. It’s been a leader in pushing advertorials. It can sometimes feel like a 1/5th of the magazine is devoted to advertorials. But more significantly, Forbes is a pioneer in native advertising through its BrandVoice section on the website and in the magazine. Here’s how Forbes describes it: “Forbes BrandVoice™ is an integrated and by-invitation content-sharing platform …(that) is an innovative approach to integrating marketers’ content with Forbes’ editorial and users’ content — allowing marketers to demonstrate their thought leadership on the Forbes platform using the same tools as content creators.” What does it take to receive an invitation to be a Forbes BrandVoice partner? We’ve heard estimates of $800,000 in annual advertising just to get to the point of discussing BrandVoice. (In other words, BrandVoice spending is on top of a company’s annual advertising buy.)
• Not all ways of charging access are reader friendly. While Forbes doesn’t charge to access its website, it does charge for iPad access even if you’re already a print subscriber. Print subscribers still have to pay $9.95 for an annual iPad subscription.  When you consider Forbes’ $10 print subscriptions price, charging $9.95 to access the iPad version is the equivalence of a 100% tax increase.

Carr makes the point that it’s ironic that a magazine with a strong heritage of America-first is now being sold to an international company. I agree — but I also think that the sale (likely to an Asian company) makes sense because Forbes is more likely to be seen as a trophy property for companies based in Asia than anywhere else in the world. And yet, so far, interest from any part of the world seems less than anyone might have expected.

What Carr doesn’t discuss or speculate is how an international owner will change Forbes. For that, stay tuned.

What Happens to Forbes, Now That Has Been Sold

Earlier this month, I wrote a column for CommProBiz called "What the Selling of Forbes Tells Us about the State of Business Media" that raised some key points about the health of business media, namely:

• Establishing a strong brand is important for readers and advertisers but can be difficult to truly monetize.

• Standalone magazine companies are at a disadvantage to conglomerates that can spread costs and profits across a family of magazines. 

• The value shoring up Forbes is not its free popular website or its steady level of subscribers — but its conference division. 

• Forbes is very creative in finding revenue but not all ways of charging access -- like paywalls (which Forbes does not have) or separate digital subscriptions (which it does) -- are reader friendly. 

Soon afterwards, on July 18, Forbes, which had put itself up for auction in the fall of 2013, announced that it had sold itself for more than $300 million to Integrated Whale Media Investments, a Hong Kong investor group. The asking price had been above $400 million, and the Wall St. Journal had said some "traditional media companies" had offered bids of $200 million but were rebuffed by Forbes. The valuation of Forbes Media is at $475 million, roughly what the family had been asking for.

As part of the sale, Elevation Partners is selling its entire stake. According to the Wall St. Journal, Elevation Partners, which had invested $264 million in 2006, "would recoup substantially all of its investment." Which is to say: Elevation did not make money on owning a portion of Forbes. 

Additionally, "The Forbes family will take some cash out as well, although the precise amount isn't known." Which means the Forbes family has limited its potential liabilities without making much money on the deal.

Meanwhile, here are a few key facts about the business of Forbes from the sale include:

• Forbes's print circulation increased in 2014 to 6.1 million, a record for the magazine and much higher than competitor Fortune (at 3.6 million, down from 3.8 million a year earlier). However, Forbes offered heavily discounted subscription fees that shored up its print circulation.

• Print advertising has continued to drop, declining 11% to 650 pages compared with 2013. (Fortune's ad sales declined 4.7% to 665 pages over the same period.

• Traffic to Forbes's websites increased 17% to 27.7 million unique desktop and mobile visitors last month in the U.S., which makes Forbes the third-largest business and financial news provider online behind Yahoo and Dow Jones.

In my next blog post, I'll address the editorial implications of the sale of Forbes.

Top 7 Things to Understand about Magazines' Lists

If the age of social media and native advertising has taught us anything, it's that people love lists: 

• "15 ways to waste more time on the Internet."
• "10 useless facts that will bore your friends at cocktail parties."
• "10 secrets to reduce procrastination." 

Those aren't real lists but they aren't so far off from native advertising articles (my favorite native ad headline of the day: "Warren Buffett Tells You How to Turn $40 Into $10 Million." Native ads are so prevalent, that The Onion recently launched a spinoff site called Clickhole that serves up faux native ad-like headlines and stories. The main problem is that the blurred line between Clickhole stories and real, unironic native ads.)

No business publication "gets" the importance of lists than Forbes, which researches, compiles and publishes dozens of lists each year, beyond the iconic Forbes 400 of the wealthiest Americans (by which Forbes tends to mean U.S. citizens or residents).

Here's our own list based on Forbes' range of lists.

1. You can never have too many different flavors of lists. In addition to the Forbes 400, Forbes also publishes the Worlds Richest Billionaires issue; "Richest Families in the U.S."; as well as the "Best & Worst Cities for Jobs," "The Best Cities for Business"; "The World's Most Powerful Celebrities" and "The Top Earning Actors" and "The Highest Paid Athletes" and don't forget: "Superheroes of the Celeb 100" and the "Richest Fictional Characters." (Seriously -- Mr. Monopoly ranked #13.) Several lists seem like variations of another list; the most powerful celebs includes top earning actors and athletes.
2. Publishing lists as a slideshow can be great because each click improves the traffic counts on your website. Instead of printing the top 10 of a list on one page, which generates only one click, slides of the top 10 whatevers generates 10 clicks.
3. Lists work best when they are quantifiable, which is why Forbes allocates resources to compile these lists. But there is a lot that can be hard to pin down, even when it comes to net worth. A lot of other lists are subjective, even as they try to apply some framework to the list. For example, Forbes ranks author John Green at 79 on the Most Powerful List, with JK Rowling at 84 -- really? Perhaps it's a nuance of power, but I would think Rowling still has more "power" to get published and movies made than John Green (not to take away from Green) but perhaps Forbes has a different definition of "power."
4. Realize that most rankings are designed to generate a barroom discussion and are not scientific. Most rankings should be taken with a grain of salt. What stars earn each year can be variable, with payouts dependent on sponsorships and multi-album deals. Same for CEOs and stock options.  
5. Even if Forbes provides some quantifiable numbers, there's a lot of guesswork and sometimes those numbers don't really matter. On the "Most Powerful Celebrities" list, which looks at earnings, money rank, press rank and social rank, LeBron James is ranked number 2 (after Beyonce). But King James' scored 19 on the money rank and 22 on the social rank; his highest ranking was the press rank at 9 -- so how can Forbes justify his top-two ranking? Well Forbes adds a "cultural figure," which is not clearly defined.
6. There are always questionable selections. Some of the stars on the Most Powerful list certainly deserve to be there -- Beyonce, LeBron, Dr. Dre, Oprah, Ellen, Jay Z, people known by their first names. But some of the rankings are questionable: Does Floyd Mayweather belong at #7? Roger Federer at #16, the Eagles at #36, One Direction at #28, Justin Bieber at #33? That doesn't include some folks I haven't heard of (because that may say more about me than them). Then there are celebs who don't seem particularly powerful like Avicci (#47), Kate Upton (#94), Kaley Cuoco (#99) and therefore don't belong on the list at all.
7. The teams that compile these lists do not always read the rest of the magazine -- and vice versa. On the very next page of the printed edition, Forbes reported that Michael Jordan is now a billionaire.  Here's the news blurb in its entirety from Forbes' "Scorecard" column: "Jordan never retired. Still earning $90 million a year selling shoes, he ups his stake in the NBA Charlotte Hornets and becomes the first NBA star worth a billion." If I were compiling a list of "Most Powerful Celebrities," I would have included Michael Jordan.

I don't mean to pick on Forbes or that particular list. I like lists as much as the next person but at some point, most are subjective, and that's okay. Cases in point: People's "Most Beautiful" and "Sexiest Man Alive" lists, various magazine's Best (and Worst) Dressed lists, and hundreds more. I think it is helpful to understand how the lists are compiled and why publications rely on them as long as readers take most of them with a grain of salt.

What the Selling of Forbes Tells Us about the State of Business Media (Part I)

According to the New York Times media columnist David Carr, Forbes will be sold to an international company sometime in the next few months. You can read his article, "Foreign Buyers Eying Forbes Magazine, a Chronicler of the World’s Wealthiest." 

But here are some lessons learned, gleaned from the article and our experience:

• Standalone magazine companies are at a disadvantage to conglomerates that can spread costs and profits across a family of magazines, according to Carr. For the most part Carr is right -- but Forbes actually publishes several other titles -- ForbesLife, Forbes Europe, Forbes Asia as well as 29 international editions. (It's probably not a good time to purchase advertising in Forbes Russia, Forbes Ukraine.) Forbes also runs a very popular website (more on that below) and RealClearPolitics.com family of website. Our point is: it's not just publishing a range of publications -- it's publishing magazines that reach a range of readers. After all, if you put all your eggs in one high-value Birken bag, when advertisers pull back on your demographic, you could get hit 29 times.
• Sometimes selling isn't a matter of making money but in preventing additional losses. The estimated price that Forbes may sell is $250 million (though some say that estimate is low). But Elevation Partners paid $264 million for a minority stake -- so their portion is certainly underwater. Carr says the Forbes family is unlikely to make money from the sale. The question becomes: why sell? Seems clear that the reason is that it continues to be tough for media companies to build value.
• The value shoring up Forbes is not its popular website -- but its conference division. The publication is probably generating tons of revenue from its growing number of conferences, including luxury cruises offering insights and access to top stock pickers. Conferences have re-emerged for Forbes and other publishers as a profit generation tool. Conferences may have been a difference in the valuation of BusinessWeek for $5 million (and the assumption of debt) when it was acquired by Bloomberg. The same for Newsweek, which had no conferences and was sold for $1 and the assumption of debt. The bottom line lesson: perhaps leverage a successful conference series and turn that into a multimedia property (which is what TED is doing). 
• Forbes could generate more money by establishing a paywall around its content. Carr makes the point that Carr makes the point that others -- including the Times and Wall St. Journal -- have successfully boosted revenue by establishing paywalls around their content. Yet Forbes.com aggressively promotes the website in a bid to generate views that can translate into higher revenue. It has been very successful in developing a community of columnists (many of them people trying to position themselves as thought leaders). The bottom line here: there's still no single, accepted way to generate sustainable revenue online -- neither free access (and higher revenue from advertisers) or paywalls (and subscription fees from access) are really replacing print advertising revenue that will never return to pre-mobile/digital levels.
• Circulation is holding steady but it may not generate steady revenue. Last year, Forbes was offering print subscriptions for $10 -- that's a steep discount from prior years. Keeping circulation high is important to advertisers (and the amounts you can charge them) but discounting clearly hurts profits.
• Forbes is very creative in finding revenue. It's been a leader in pushing advertorials. It can sometimes feel like a 1/5th of the magazine is devoted to advertorials. But more significantly, Forbes is a pioneer in native advertising (though I don't think that's the term they use) through its BrandVoice section on the website and in the magazine. Here's how Forbes describes it: "Forbes BrandVoice™ is an integrated and by-invitation content-sharing platform ...(that) is an innovative approach to integrating marketers’ content with Forbes’ editorial and users’ content — allowing marketers to demonstrate their thought leadership on the Forbes platform using the same tools as content creators." What does it take to receive an invitation to be a Forbes BrandVoice partner? We've heard estimates of $800,000 in annual advertising just to get to the point of discussing BrandVoice. (In other words, BrandVoice spending is on top of a company's annual advertising buy.)
• Not all ways of charging access are reader friendly. While Forbes doesn't charge to access its website, it does charge to access its content via your iPad. If you're already a subscriber to the print edition, Forbes charges $9.95 for an annual iPad subscription.  When you consider Forbes' $10 print subscriptions price, charging $9.95 to access the iPad version is like a 100% tax increase.

Carr makes the point that it's ironic that a magazine with a strong heritage of America-first is now being sold to an international company. I agree -- but I also think that the sale (likely to an Asian company) makes sense because Forbes is more likely to be seen as a trophy property for companies based in Asia than anywhere else in the world.

What Carr doesn't discuss or speculate is how an international owner will change Forbes. For that, stay tuned! You can check out a subsequent look at the selling of Forbes here. 

Bitcoin Already a Hot Topic in 2014 -- Validates Another Prediction

In our annual trends and predictions, we identified Bitcoin as being a hot, ongoing topic in 2014.  We said:

Bitcoin and cashless payments will continue to generate interest. We’ve seen a rise in interest in bitcoins, and it appears bitcoins may be on the edge of going mainstream. We don’t think that will happen in 2014 but we do think the topic will get discussed.

But more retailers are evaluating whether or not to accept Bitcoins for payment, and already there's been a lot of coverage about bitcoins: such as:

• Yahoo Tech: "Okay, Seriously: What The Heck Is Bitcoin, And Why Do So Many People Prefer It To Dollars And Cents?"
• Bloomberg BusinessWeek: "Bitcoin Woos Washington to Ensure Lawmakers Don’t Kill Industry"
• Forbes: "Taxing Bitcoin: IRS Review Has Big Implications For Investors In Virtual Currency"
•  USA Today: "Ask Matt: Should I invest in Bitcoin?"

And those are just within two hours of when I was writing this post.

We still don't think most consumers will pay with Bitcoins in 2014 but more retailers will announce they accept it for payment in 2014 -- as a way to highlight their being on the cutting-edge.

Meanwhile, we also saw another story prediction get validation. In our list of ongoing tech trends we identified cognitive computing, led by IBM Watson, to score coverage. Here's a recent Wall St. Journal article: "IBM Struggles to Turn Watson Computer Into Big Business;Revenue Is Far From Company's Ambitious Targets."

Forbes Blog Post Validates 2013 Prediction

We've been rolling out predictions over a two week period so some of our predictions have yet to hit on this blog. However, we have posted a complete set of trends for 2013 over on our website here.

In our annual round-up of ongoing stories we think will get coverage, we identified the wage gap between women and men.

So check out "We've Moved Backward in Closing the Gender Wage Gap" on Forbes.com, which validates our prediction.

Bloomberg BusinessWeek Validates Cybercrime Prediction

Cybercrime -- which we also predicted (see original column here) as one of the top ongoing stories the media will cover in 2012 -- continues to generate media headlines.

The latest is from Bloomberg BusinessWeek: "Life in Cyberia: A new brand of warfare is under way. Our five experts discuss the best defenses."

With news just this month of malware attacks on Lebanese banks (potentially to uncover links to terrorists; check out Forbes' article on Gauss) and airports (see a separate BusinessWeek's article), expect coverage of cyberattacks and cyber warfare to continue into 2013.

From Forbes: 7 Networking Secrets from Silicon Valley's Greatest Connector

I found these "7 Networking Secrets from Silicon Valley's Greatest Connector" from Pejman Nozad, an immigrant carpet seller who has made it big in Silicon Valley despite a lack of technology expertise, to be interesting. Worth considering. Check them out here.

Forbes Validates Our Prediction about Curation

In our annual list of predictions, we said we expect to see a lot of "curation" this year. In an April column, Lewis D'Vorkin wrote, "The soul of media: Curation and editing, all one in the same."

Interesting all the more because on Jan. 12, 2011, we posted "Birnbach Communications' Top Predictions for 2011, Part III," in which we said,

As used in 2011, curation does not have anything to do with healing. Sometimes known as "digital curation," the term generally refers to the concept of a website that offers information selected and maintained by an actual human (who might be known as a curator if this were a museum), not by an algorithm. In newspaper circles, this person used to be called "editor."

Read D'Vorkin's column, it worth checking out. But it's also nice to see another prediction validated.

Good Tips from Forbes' Rich Karlgaard on Examples of Great Restructuring

In "Switch: How to Change Things When Change Is Hard," by Chip Heath & Dan Heath, make the case that too many companies try to shore up weak spots rather when what they ought to do is find their bright spots and model that behavior for the rest.

In his Feb. 26th column, "Ten Tips: Great Restructuring Winners," Forbes publisher, Rich Karlgaard picks up that theme: " Let's not spend time dissecting the losers. What are the Great Restructuring winners doing right?"

Karlgaard highlights 10 tips, of which I think four are most relevant to communications functions:

• Internal communication -- Karlgaard cites some organizations as doing a great job with internal communications.  Our point is that communicating to employees is critical as companies gear up from the recession, and that too many organizations overlook internal comms because they're focused on customer communications.  Zappos is an example of engaging your employees to deliver great customer service.
• External communication. Clearly this is a critical area, especially as companies look at how they integrate social media into their communications toolkit.  Karlgaard cites IBM's chief marketing officer, Jon Iwata, who has implemented am IBM alumni network, which has more than 200,000 former employees as members.
  
• Brand. Karlgard's point is that "The best brands are not shallow. They touch a customer's every sense," and companies need to think about and improve how people interact with their brand.
• Purpose. I've been feeling that a sense of purpose is very important, and is something that gets overlooked.  A sense of corporate purpose often gets overlooked, but it's important to engage your employees and your customers.
  
  As Karlgard says about purpose:
  

  There has never been a better time to be a company of integrity. You'll never achieve integrity unless everyone knows what you stand for--your purpose. This must be built on a moral foundation. God and the tweeters will strike down those who fake it.

I totally agree with Karlgaard about a sense of purpose.

Forbes vs. Fortune: Most Powerful Women Edition

Even as the dynamics of print publishing have changed dramatically since I last about Forbes vs Fortune in 2007 ("The difference between Forbes & Fortune"), the two magazines seem to continue to compete primarily with each other, ignoring any online competitors.

One thing for certain: the only people outside of Fortune who read Fortune as closely as PR people do are the editors and reporters at Forbes. The same is true of Forbes, too. (I vividly remember talking with a Forbes reporter who was as well informed as I was about how BusinessWeek and Fortune had covered a client of mine. And that reporter's knowledge was based partly on interest in my client and mostly due to how Fortune was covering the sector.)

Both Forbes and Fortune have redesigned their print publications; Forbes has undergone a more comprehensive makeover while Fortune has added some accessories.

So it's interesting -- and no coincidence, really -- to see that Fortune ran its "50 Most Powerful Women in Business (FORTUNE's annual ranking of America's leading businesswomen) in its Oct. 18th issue while Forbes ran its The World's 100 Most Powerful Women in its Oct. 25th issue.

The differences in the lists and their methodologies tell us a lot about the two magazines.

It goes beyond the fact that Forbes offers twice the number of powerful women than Fortune. And that both lists contain many of the same women, including Oprah (No. 3 in Forbes and No. 6 in Fortune), Pepsi CEO Indra Nooyi (No. 6 in Forbes, No. 6 in Fortune). Wellpoint CEO Angela Braly (No. 12 in Forbes, No. 4 in Fortune), Yahoo CEO Carol Bratz (No. 42 in Forbes, No. 6 in Fortune), and BofA Merrill Lynch's Sallie Krawcheck (No. 44 in Forbes, No. 24 in Fortune).

• Forbes and Fortune agreed on one women: both ranked Kraft CEO Irene Rosenfeld as No. 2. The other women who appeared on both lists were ranked at vastly different levels: Avon CEO Andrea Jung was No. 47 in Forbes but No. 5 in Fortune; Fidelity's Abigail Johnson was No. 59 according to Forbes, but No. 21 in Fortune; Facebook COO Sheryl Sandberg was ranked No. 66 by Forbes but reached No. 16 in Fortune.
  
• The Forbes list includes some women from outside the US like Gail Kelly, CEO of Wespac in Australia. The Fortune 50 list is comprised entirely of Americans. That said, Fortune also includes its global list, the International 50.
• The Forbes list also includes politicians while Fortune lists "Washington's power players," and both lists include Hilary Clinton, Nancy Pelosi, SEC's Mary Schapiro, and Justices Elena Kagan and Sonja Sotomayor. Interestingly, Fortune did not include Justice Ruth Bader Ginsburg (but Forbes did) and Forbes included Michelle Obama at No. 1 while Fortune did not her at all.
• Forbes includes celebrities while Fortune is more serious, and does not. Thus Forbes ranked Lady Gaga at No. 7; Beyonce at No. 9 (but includes her last name (Knowles) for its readers who may not be familiar with her work; Ellen DeGeneres (No. 10); Angelina Jolie (No. 21, and, surprisingly, did not include a photo); Madonna (No. 29 and no photo), Chelsea Handler (No. 33 -- I like her show but I still don't know how she made this list); Sarah Jessica Parker (No. 45); Suze Orman (No. 61), Rachel Ray (No. 78), and Martha Stewart (No. 99).
  
• Forbes, which loves celebrities, also listed models: Carla Bruni-Sarkozy (No. 35 and also the First Lady of France, and instead of a photo of her, there was a photo of the Eiffel Tower); Heidi Klum (No. 39); and Gisele Brundchen (No. 72). Forbes also ranked designers Tory Birch (No. 88), Vera Wang (No. 91) and Donna Karan (No. 96) as well as news anchors and editors Katie Couric, (No. 22), Tina Brown (No. 34), Meredith Vieira (No. 40), Diane Sawyer (No. 46), Rachel Maddow (No. 50), and Christine Amanpour (No. 73).
  
• Forbes also ranked female athletes including Serena Williams (No. 55) Venus Williams (No. 60 and Danica Patrick (No. 93).
• Forbes also listed a number of politicians including those named above as well as Sarah Palin (No. 16), Meg Whitman (No. 47), Carly Fiorina (No. 51), and Maria Shriver (No. 53). I suspect that, if written after the midterm elections, Meg and Carly would not make the list.
• Forbes also includes royalty, including Queen Elizabeth (but not the richer, commoner JK Rowling).

The main criteria for Forbes was dollar amount, including company revenue, and "buzz" factor, defined as the number of Factiva hits, Google hits, Facebook fans, Twitter followers, and radio and TV appearances over the past 12 months.

The main criteria for Fortune "is four-fold: the size and importance of the woman's business in the global economy, the health and direction of the business, the arc of the woman's career, and social and cultural influence." According to a blog article by longtime Fortune reporter, Patricia Sellers, the pattern for selection for Fortune appeared to be that "the consumer packaged-goods industry is welcoming to top-level women."

Forbes' 10 Rules of the Cheap Revolution

Rich Karlgaard, Forbes' publisher, has long written about what he calls the Cheap Revolution since 2006, describing it as "the wholesale shift by corporate customers and techmakers to cheap chips and open-source (often free) software such as Linux. They are embracing simplicity, unlocking prodigious new power and cutting tech costs by up to 90%, threatening the Silicon Valley plutocracy."

In the current issue, Karlgaard cites "10 Rules of the Cheap Revolution," and while I think they all make sense, I want to highlight the ones I think are most important for tech companies.

Consumers rule. Consumer technology is now ahead of most industrial technology, which forces businesses to change their operational practices.

Interface rules. The friendliest interface will win. It's all moving in the direction of entertainment.

Transparency rules. All those 1990s predictions of middleman destruction turn out to be true. Poor bandwidth only temporarily delayed this inevitability.

Self-discipline rules. We are on our own. The most important software of all is our internal operating system.

For the entire article, please check out it here.

Ten Observations about Executive Profiles

The executive profile has long been a staple of business journalism. But given some changes to the media world itself, here are some observations about the current state of the executive profile and some lessons PR functions can consider.

1. Fortune has always favored profiles of well-known CEOs of large companies -- witness the deluge of cover stories on Bill Gates, Warren Buffett and Steve Jobs. If Fortune does not profile a well-known company or CEO, it then turns to a lieutenant (they're always called lieutenants, never colonels, I don't know why). For example: "Warren Buffett's Mr. Fix-It."
   
2. Fortune does run articles on CEOs of smaller companies, though generally the company has to be a cool, innovative startup.
   
3. Fast Company profiles lesser-known executives with an interesting story to tell. It helps if the if they executive -- doesn't have to be a CEO -- works at well-known. Example: "How Nike's CEO Shook Up the Shoe Industry," which graced the cover of the print version under the headline: "The World's Most Creative CEO: Nike's Mark Parker Uses Elite Athletes, Artists & His Own Show Designs to Drive a $34 Billion Business."
   
4. The different headlines for the print and online articles provides a lesson into what might sell as a cover line for print as opposed to what you need for a good, search-optimized headline for the online space. The Online headline is shorter, mentions keywords faster (Nike, CEO and shoe) and avoids words that aren't search-relevant (artists, athletes, creative, elite, and Mark Parker).
5. Forbes runs profiles of CEOs at large companies to depict a buy or sell opportunity or profiles of small, private companies as an opportunity of what to watch and invest in if the company ever goes public. Fortune and Fast Company often write profiles that offer lessons learned or interesting case studies. Forbes often seems to select executives based on the magazine's contrarian perspective.
6. The articles are detailed and well researched, but they tend to show one aspect of the executive. Whether Fortune, Fast Company, Forbes, Bloomberg BusinessWeek -- all the profiles generally have a single narrative, no matter how lengthy. Fast Company likes creativity or innovation so their articles often portray those qualities. Fortune and Forbes like turnaround stories (but you really have to prove that turnaround has occurred (more on this, below). Forbes in particular likes to tell stories that have a lot of drama to them, a CEO undertaking a heroic struggle to launch or save a company.
7. Only after a downfall or misstep, will a follow-up story show a more nuanced portrayal of the executive. For example, Mark Hurd got tremendous, positive coverage (including a Forbes cover story) since taking over H-P in 2005. However, after he was pushed out last month, suddenly stories appeared that said a lot of employees did not like Hurd and that, while great at cutting costs, he was not a great manager, and made some short-term gains at the expense of long-term investments -- and that the alienation of employees and his own board were large factors in the decision to fire Hurd. (I'm not taking sides here, I'm merely pointing out that a different take on the impact of Hurd's management style came to light only after he had left the company.) The same is true for Alex Bogusky, the former co-chairman of Crispin Porter + Bogusky was cited in dozens of Fast Company articles over the past few years, with always glowing anecdotes, quotes, etc. It's only after he stepped down that we get a more complete picture. In "Alex Bogusky Tells All: He Left the World's Hottest Agency to Find His Soul," we find out thata Bogusky could be a tyrant at work (basically telling everyone in his then-Miami offices that the company was going to relocate shortly to Boulder, CO, and cutting out key members who stayed in Miami), that he fired a great copywriter one time to make the point that no one's job was sacred, etc. Some of the aspects of being a bad boss are not unique to Bogusky. But it didn't seem too difficult for Fast Company to find people who provided the Bogusky-as-bad-boss storyline after he stepped down.
   
8. The point is that if you do manage a high profile visibility campaign for your executive, negative stories could appear after that executive leaves the company. Usually those postmortem stories don't make the companies look that good (even H-P after making the decision to get rid of Hurd) -- so companies should be prepared that negative stories could arise at that time.
9. Telling a turnaround story to get the attention of the national business media is difficult. For public companies, you need to show a certain number of quarters of positive results -- and you need validation from analysts who go on record saying that the company has turned around. Sometimes organizations want to tell a corporate change story, but again, you need hard, objective facts to make that case to a reporter. (A decade ago, a client wanted to tell Fortune and BusinessWeek they had made a significant shift in their culture, exemplified by an increase in their US marketing budget of $10 million -- which could have been an interesting hook, except that their overall US marketing budget, which did not go to us, was already at $90 million; the story did not fly because the reporters did not feel a 10 percent increase actually represented a culture change -- a point we had made before contacting the reporters.)
10. You need to have a good story. This seemingly obvious point often gets overlooked. A good story could be a stock increase, entry into a new market, the success of a new technology or device. It often is not the fact that a company has signed a new partnership deal that has no dollar amount attached to it. It combines a good narrative with objective facts. And, PR functions need to figure out the payoff for the the reporter and outlet. By payoff, I mean: what will the readers get after spending time with the article: will it be an investment idea, a management tip, something for them to try or buy? Too often, we forget to think about what need for the reader that the story we're pitching will address and solve. But it's a key aspect that editors consider.
    

Points 7 and 8 may not be relevant for most PR functions out there, but I was struck by recent coverage at how much negative information about celebrity CEOs did not make it into profiles that had helped establish these CEOs as celebrities.

Let me know if you agree or disagree with these observations.

Transparency & Crisis Prevention -- Advice from Eric Schmidt

After writing about crisis management lessons from recent events (PR Lessons from BP, Toyota & Goldman Sachs), I came across a column by Google CEO Eric Schmidt that ran in Forbes.

Schmidt's point: thanks to a 24- hours news cycle, secrecy isn't so easy to come by. (Most people talk about a 24-hour news cycle, but to be clear, we're not saying it takes 24 hours for news to hit; news hits hourly, if not faster.) That's not necessarily a bad thing.

According to Schmidt, the real question is:

"What are our choices when we, whether as individuals or businesses, get it wrong--sometimes badly wrong? We can try to conceal our blunders, as so many people have done for so many centuries. But in a world where everything is recorded and stored, that is not a realistic option.

"Nor should it be. For a company that aspires to true significance or an individual who wants to rise to prominence, the question is, "How should we behave?" The answer must be, "We did the best we could and did so transparently." In time this should move from a defense to an expected standard."

I think it's good that a business leader like Schmidt endorses transparency, and that it will help pursuade other companies of the need to embrace a new way to operate.

But I sometimes I wonder if the idea of business transparency is just another business fad. Perhaps social media's significant contribution will be to make transparency part of the standard operating proceedure for business.

You can read Schmidt's column here.

Forbes & Times Validate Prediction #5 by Writing about 3-D TV

Another day, another validation of our predictions. This time: Forbes, in an article, What's Better Than 3-D TV? 3-D TV And Beer! And the New York Times: The Pluses, and Oddities, of 3-D TV.

Last month, we issued a set of predictions that included top business story angles (available here). And very quickly, we're seeing those predictions validated by new reports and articles.

In its article, which appeared yesterday, Forbes took the approach that most others will take: That network TV is dead, and that the only way it can survive is to offer an experience not available from a laptop screen. (3-D TV also enables Hollywood studies to be able to sell the current slate of 3-D movies.) Or, here's how Forbes described the situation:

Paid-for television has precious few options when it comes to tackling the threat of video on the Web: grab more consumers by going online itself, come up with irresistible content you can't get anywhere but on the tube or entice them back to their TV sets with new technology so innovative they'll pay for it.

More Bad News for Print: WSJ, Time, & Forbes

Although the Wall St. Journal's front page had a positive story about the economy, "Economy Snaps Long Slump," it's clear we're not out of the woods yet.

Need more convincing? This morning's breaking news, Consumer Spending Tumbled, now appears on wsj.com above the story it now contradicts ("long slump").

That perhaps explains recent media moves:

• "Time Inc. Is Expected to Eliminate More Jobs": The $100 million in cuts is expected to come largely from layoffs, which comes after 600 layoffs last year.
• Forbes announced on Monday that it was dismissing 40 to 60 people from its editorial staff. According to an early Times story, "Depending on how you count, there are about 200 editorial employees at the magazine. And depending on who you talk to, at least 40 people could be cut, while one source who was not authorized to speak about the layoffs said the number could go as high as 60."
• Wall St. Journal to close its Boston bureau, according to the Boston Globe. The bureau, which covers health care, education, and financial services, will close Dec. 31. The paper will shift most of the coverage to its New York office...According to Robert Christie, a Journal spokesman, said the paper does not plan to close any of its other 36 news bureaus. “We are not giving up on the beats; we are just relocating them,’’ he said. “A lot of the companies that we used to cover are no longer in Boston and a lot of the jobs that were in Boston could be located anywhere in the US.’’

What's interesting is that even as the Journal reported good news about the economy, it is continuing to look at ways to cut costs. Furthermore, the Journal also is beefing up its tech coverage, called Biz Tech Tuesdays. Guess it won't feature much New England tech.

I think if the Journal can close its Boston bureau, it and other papers will close other bureaus, too, especially those that can be covered by regional hubs. For example, expect that there could be consolidation of all the San Francisco and Silicon Valley bureaus out there.

When in Disgrace with Fortune and Men's Eyes -- Or, less poetically, some serious changes to Fortune Magazine

Ok, perhaps Shakespeare is not relevant, as in the quote from Sonnet 29, but there's still something rotten in the state of the publishing world.

Fortune Magazine will cut its publishing frequency from 25 issues -- basically every two weeks -- to 18 issues, which means some months Fortune will publish only once a month.

Although it recently remodeled the look and feel of the prestigious business magazine, Fortune is expected to remodel the magazine again, this time focusing on longer articles on fewer topics. If Forbes is about investing, and BusinessWeek about news, Fortune will continue its emphasis on managing (which had gotten less emphasis over the past decade) by adding new columns "to help business professionals do their jobs more effectively. It will have a cleaner, less cluttered look and an upgraded Web site," according to the Wall St. Journal.

In other words, the new Fortune will be more like Entrepreneur or Inc. or even its kid sister publication, Fortune Small Business (FSB) -- all good magazines, but all really focused on service journalism. That's not exactly what Fortune, which has columns on investing and executive lifestyles, was known for.

What's interesting, I think, is that service journalism -- basically articles offering advice and how-to's -- has become more important because the media world is evolving so rapidly that few people truly have a secure grasp of things. I think that's why how-to articles in the blogosphere are often so much more widely read than analysis articles (such as this one). People are looking for advice to help them make sense and respond to the changes.

Well, it looks like Fortune is giving people what they want.

Oh, and unfortunately, there will be layoffs, too.

Here are some of the proposed changes, according to the Journal:

• The magazine itself will become more of a lush-looking premium product. Fortune plans to increase the minimum number of editorial pages in each issue.
• They will stop (or reduce the number) of "CEO-as-god magazine covers that have been a staple of the magazine, whether with Jack Welch or Warren Buffett." Replacing the "CEO-as-god" stories will be more conceptual stories, such as one about the White House's relationship with Google.
• The emphasis on large companies will continue, including on its website. Fortune.com will be "recast to focus on key companies. Executives point to Fortune.com's blog about Apple Inc. and said there are more high-profile companies that will be treated similarly."
• I would expect certain special issues to continue, including the Fortune 500 issue, among others. In fact, we can expect more online-only content about the Fortune 500, "which the magazine hopes to turn into more of a brand that lives online all year."
• Fortune is beefing up service journalism (as noted above), "adding features about career advice and business how-tos. One might feature a person who gives hundreds of public speeches a year, and her advice on how to give more effective presentations. Another column might explain how to manage your online profile. Reflecting the growing influence of the federal government in corporate affairs, Fortune is adding a one-page column called 'Washington Watch.'"

But is it enough for Fortune to succeed? I don't think so. I think Fortune looses some prestige by dropping its publishing frequency, and perhaps some of its relevance. I also think they're making at least one mistake: "Executives decided it was more important for Fortune to be more visible on the Web, where the magazine may add staffers."

Yet the web-based version of Fortune is free -- the magazine generates no subscription revenue there, just some ad buys. But online advertising buys typically generate less money than print ads.

Meanwhile, on the personnel front, there are going to be layoffs, probably in the next week or so. It also means that whatever stories reporters were working on may be shelved. It means turmoil for the editorial staff and those of us pitching them.

How Business Magazines Are Responding to the Continued Ad Slump

We've seen a big change at BusinessWeek, now owned by Bloomberg. Big changes at Fortune. I guess we're waiting for the shoe to drop for Forbes.

Meanwhile, here are some interesting points from the Journal article, "Fortune Magazine Cuts Back Number of Issues; Changes Are Said to Foreshadow Further Restructuring at Time Inc. Publications as Ad Slump Drags On"

• "Industry executives believe news, business and general-interest magazines—unlike fashion and entertainment titles—are unlikely to rebound fully even after the economy is on a firmer footing." Which is to say, despite a recent Journal article that the business spending slump looks like it's ending, we're still not out of the woods yet.
  
• "They see a permanent change in how readers interact with news titles in the Internet age." Again, the advice component is something that news outlets and news websites are not offering.
• Business magazines have been hit hard during the ad slump: "The number of advertising pages in Fortune dropped 35% from a year ago, on par with the declines at BusinessWeek, Forbes and Newsweek." In contrast, "Ad pages for entertainment and celebrity magazines declined 15% this year from 2008, and fell 18% for fitness and men's lifestyle magazines such as GQ, according to Mediaweek," a far shallower dropoff.