Memorial Day weekend is the traditional kick-off to summer travel. But with the economy still in decline, industry analysts see a continued trend shaping American travel patterns that will have repurcussions throughout the summer and should send strong signals to marketers in a variety of industries.
Reports indicate that Americans will reduce the amount of summer travel by air. During the Memorial Day weekend alone, air travel is set to decline by 1 percent and could set the pace for a 7 percent drop in travel by plane this summer.
The beneficiary of this decline in air travel are localities. According to a survey done by American Pulse, 27.4% of those survey are looking for a local get-away that does not require air travel. Many are in fact contemplating a series of day-trips and trying to minimize hotel stays whenever possible. This has some states and regions making a push for local tourism in an effort to keep wealth within their own communities and encourage people to rediscover the world closest to them, their friends and families.
Of course, this trend also sends a strong signal to marketers and business developers across many industries that going local may be a way to help take some of the sting of a prolonged economic downturn.
For example, local search companies and online advertisers, as well as those companies connecting people with local listings through GPS and other technologies, stand to help local businesses who are seeking to get their online act together. According to data from The Kelsey Group, a division of BIA, by 2013, local mobile ad revenue is expected to reach more than $3.1 billion, up from $160 million in 2008. Mobile search, which is an area local businesses can start to get engaged in now, will constitute a majority of that revenue at $2.3 billion.
What does this mean to local businesses? Essentially, more people are using their phones as a means for shopping (local and online merchants) as well as local business search. Companies are rapidly developing mobile coupons and text / sms campaigns to help drive commerce through mobile devices.
By connecting people to local offerings, businesses are more likely to build stronger word-of-mouth or viral initiatives to compliment their online marketing efforts. Overall, tapping into the online world can help a local business develop new revenue streams – but now the key is not just to be online, but to target your local consumers as well to address the renewed emphasis on Americans to stay close to home. Using mobile advertising and targeted online ads are two methods local businesses need to consider very seriously.
Expanding Revenue Streams for Media Companies: An introduction to practical strategies for the local media ecosystem
On Tuesday, May 5th, I will moderate a Webinar that will cover expanding revenue streams for media companies. The goal of this event is to provide an introduction in advance of the Winning Media Strategies conference to some practical strategies for the local media ecosystem.
Clearly, the economic downturn / recession has adversely impacted many in broadcast and print media. No one has been immune from the challenges created by declining advertising dollars and viewership. When you look ahead – the next several years the advertising pie is expected to decrease. With so many new media companies and devices emerging, radio, tv and newspaper companies will be fighting for market share rather than trying to grow overall ad revenues.
In order for media companies to grow their business during this period, their company must develop multiplatform strategies to diversify their business models and build multiple revenue streams. This is made tougher by the necessary response to the tight ad market in terms of budget cutting, employee reductions and less tolerance for risk taking.
In addition to steps a media company can take, this webinar will present some revenue forecasts by media platform; best management practices and case studies. The speakers are first rate, and include:
Rick Ducey, Chief Strategy Officer, BIA Advisory Services
Daniel Anstandig, President, McVay New Media
Erik Hellum, President, GAPWEST, GAP Broadcasting
After negotiations appeared to stall last night and into today, the New York Times will give notice to federal authorities under the Worker Adjustment and Retraining Notification law (WARN) that it will close the Boston Globe’s plants. Under law, this notice is required and will last 60-days before any action is taken. In the meantime, the Globe will continue to operate.
The decision by the Times does not prevent both sides from reaching an agreement, and is being described by many in media circles as a tough negotiation tactic designed to push the unions to meet Times management demands. According to the AP both sides have agreed to return to the table for talks in about 2 days.
But the bad blood between both sides that I talked about during yesterday’s radio program and that has been published widely in different reports is only growing worse. The Globe unions have called the approach by the Times as “bullying” while others have openly questioned both the management skills of their parent company and their own level of sacrifice. Not exactly the building blocks to a long-term future.
With that said, no one should forget that the NY Times is in a world of financial hurt themselves. Not only have they cut salaries and reduced staff, they have mortgaged their property, borrowed over $200 million, and are believed to have over $1 billion in debt. With diminishing circulations and ad revenues, there is not a lot of positive news in the short term for the newspaper industry as a whole, but especially for the Times and Globe.
The best advice for the Times still remains to either consolidate operations with the Globe, adopt a more defined multi-platform strategy, or to dump the Globe as soon as possible and try and stop the bleeding. In either case, the road is not an easy one – but one has to question the business logic of keeping a division that stands to lose over $85 million this year and will certainly lose money for the foreseeable future.
The Boston Globe got a little more time to find $20 million, but the bad-blood between the Globe staffers and the New York Times appears to be reaching new levels. According to published reports there is a lot of anger amongst the Globbies that the Times has not been totally accurate on its estimates of Globe losses this year, as well as some of the cuts they are requiring the Globe to make. Globe staffers feel as if the executives and managers at the Times are not making enough sacrifices on their end.
This kind of bad blood could be the kind of thing that destroys a corporation’s unity and damages its ability to succeed over the long haul. That, of course, would assume that such unity existed previously and that success was something probable in the foreseeable future for either side. In both cases – neither appears true.
Never the less, with this recent extension to Sunday at midnight, it appears that the Globe unions are very close to striking a deal, which will help in the short term, but do nothing to address the structural challenges facing both the Globe and the Times in the long term (if we can call a year to a year and a half long term).
The clock is ticking on the Boston Globe’s future. After the last several days of closed-door negotiations and union disagreements, there does not appear to much consensus on what the main unions for the Globe will do. The same is true for the New York Times, which continues a free-fall of its own.
The Globe lost around $50 million a year ago, and was on pace to lose roughly $85 million this year. But with circulation and advertising in a downward spiral (The Globe’s average weekday circulation, for example, fell 14 percent to 302,638 for the six months to March 31 from a year earlier, according to the Audit Bureau of Circulations), as more and more people cut costs and get their news and information from other sources – the unions should consider the $20 million to be a gift.
The truth is really stacked in favor of the Globe being shut-down.
For starters, the New York Times cannot find potential buyers (apparently local Massachusetts politicians have struck out as well) because no one sees value in the Globe. Even local patriots to the area (pun intended to the Kraft family) ran away after reviewing the balance sheets.
Another possibility, consolidating newsrooms and resources to help streamline the operations of both the New York Times and the Globe, has been rejected by Times management.
This means the options are few. Either, find some ways to cut costs now and keep the paper on life-support for another year, or shut it down now and stop the bleeding.
Of course, the obvious pinch for the NY Times is that if the unions stand firm and refuse to find $20 million and they do not shut down the Globe, they will look weak to investors. And if they do shut down the Globe? They are admitting a $1.1 billion purchase (The Globe’s sale price a few years ago) of the historic Boston rag was a colossal bust.
At the end of the day, the worst possible outcome for the Globe and the NY Times is if the Boston unions pull their heads together and find the $20 million in cost savings. It does not take a rocket scientists to realize that if you lose $50 million and then lost $65 million (instead of $85 million), you are still… losing money at an unsustainable rate. The question the Times has to ask itself is, regardless of what the Boston unions do – why are they doing this to themselves?