The Message is the
Message
"Shift Happens"
for Publishers in a Post-Present World
FROM PUBLISHING
TRENDS (FALL 1999)
Quick quiz: How long does it take
the average Wal-Mart
customer to decide whether or not they will buy a book?
All of 2.3 seconds. Is there anyone besides AOL
making money on the Internet? Yes: pornographers. What
do you call the successful marketing of books today?
A "well-managed accident." To top it all off,
what is $13.3 billion considered in the IPO-addled marketplace?
Not a lot of money.
If you answered correctly, you
were almost certainly at Market Partners International's
second conference, "Publishing Direct: Connecting
to the Consumer," held at the Yale Club of New
York on Nov. 18. There, amid a mixed crowd of old-school
direct marketing hands and virtual-school media folks,
panelists broke news both good and bad for the business
of publishing. And although Marshall McLuhan
did a few pirouettes in his grave when his memorable
"medium is the message" slogan was updated
by none other than BMG Entertainment CEO Strauss
Zelnick, McLuhan can take heart that he's still
nailed the last word on publishing at the dawn of e-everything.
"Innumerable confusions and a profound feeling
of despair invariably emerge in periods of great technological
and cultural transitions," McLuhan wrote in 1967,
and you could not have better described the tenor of
the room as participants struggled with the many transitions
into which they've been summarily plopped.
For his part, Zelnick arrived
brandishing a flip chart, but soon turned the tables
by plunging into a discussion of Internet valuations
and revenue multiples, intended to suggest that with
each passing IPO, a venture capitalist gets richer and
publishers have one more reason to believe that the
Web will be a wide-open portal to robust new markets.
To prove his point, Zelnick stunned the early-morning
crowd with an Econ 101 discourse on the capital asset
pricing model, which looked something like E(ri) = rf
+ Bi[E(rm) rf], and was eventually parsed to the
effect that "new formats generate growth in mature
businesses." Zelnick drew a parallel to cinema
operators in the '80s, who thought it was curtains when
pay TV and VCRs flooded the market. A decade later,
natch, the movie biz entered an unprecedented expansion.
Zelnick's predicting the same will happen when MP3-style
music downloads become today's equivalent of the CD
revolution, and implied that digital distribution will
eventually result in more profits for publishers, not
less.
Words Into Eyeballs
Paul Bennett of the brand
agency Nick and Paul once again let expletives
fly in a refreshingly blunt monologue on how "everyone's
freaking out" over the Internet without understanding
the fundamental issues at hand. He harked back to a recent
visit to an ostrich farm, where it seemed the behavior
of the little beasts was not unlike that of publishers
rushing pell-mell to the Web. "Ostriches run toward
the thing they're frightened of," he said. "You
guys shouldn't be that." To help calm the industry
down, he summarized the results of a recent brain-storming
session with 20 of his staff, who invented tongue-in-cheek
job titles for publishers such as "Pullologist,"
the person who convinces publishers that instead of bombarding
the customer with marketing pitches (the "push"
model), they should be using them as generative agents
(the "pull" model). He recounted the story of
moviepitch.com, the site where people submit one-line
movie pitches. It turns out that an 86-year-old woman
from Arkansas knocked off this one: "There is a woman
who lives inside the Statue of Liberty." It was promptly
optioned by Michelle Pfeiffer for six figures.
Other job titles included the "Director of Fluidity"
(who counsels marketers to check out the fabulous o-pinion.com,
a site where the public critiques various websites) and
the "Officer-in-Charge of Enlightenment" (who
argues that publishers can seize the moment to become
"content filters" for the carcinogenically unfiltered
Web. The whole point, others mentioned, is to translate
"words into eyeballs" by entrepreneurially seeking
out ways to use content on the Internet.
Speaking of the Internet, AOL's
Jesse Kornbluth dolefully pleaded with all those
assembled to email him immediately with suggestions
for how he can help use his "19 million member
focus group" to publishers' advantage. "We
have people with more disposable income in one place
than anyone in the history of the entire world,"
he said, mentioning that an author's picture on the
front screen of AOL is seen 45-50 million times a day.
He suggested that the recent Kennedy death would
have been a perfect opportunity for publishers to drag
out their backlisted Kennedy tomes and have excerpts
linked to the continuous AOL coverage. Or, publishers
could have filled the gaping "news hole" by
whipping out an author who's a Kennedy expert and making
him or her available for a chat. In the event, the only
site with Kennedy-related content was Salon.com,
which had to buy more server capacity when a front-page
AOL link funneled cyber-hordes to the site. Looking
as if he'd just polished everybody off for a mid-afternoon
snack, Kornbluth concluded that Microsoft has
become the operating system of the past, and AOL is
the OS of the future. By the way, that's jessekay@aol.com.
Taking a different tack on the
issue, Chris Paradysz, CEO of the direct response
media firm Paradysz & Matera, implored publishers
to take more risks in all parts of their business. Noting
that 25% of his business investment decisions remain
variable at any given time to allow the company maximum
flexibility when big-idea lightbulbs suddenly blaze
overhead, he laid it on the line thusly: "Don't
do wimpy testing." During the same panel on customer
contact strategies, VNU's Brian Dearth
followed up with true stories of record execs who brushed
off Soundscan when it was first introduced, only
to chew on their platinum Lionel Ritchie LPs
when the POS data system soon became the industry standard,
worshipped by record labels not only as a marketing
kicker but as an indispensable management tool. Troll
president Candy Lee further cowed the audience
with the revelation that she spends two hours every
weekend in a bookstore watching what people actually
do in there. And with regard to the oft-repeated mantra,
"know your customer," National Geographic
senior vice president Nina Hoffman shared data-mining
tips from her database of 33 million names and email
addresses. "It only takes one response from a reader
to create a customer relationship," she said, giving
everyone pause to figure out how they can wrangle that
first golden opportunity. Although blow-in cards, mail-in
rebates, and peel-off stickers were mentioned, nothing
gripped the group like Lee's stories of doing "hypermarket"
research in France, where solicitors offered free stuff
to customers who would enter the store and tell them
what they thought about the book aisle. "We now
know how to sell books in supermarkets because of these
tests," she declared.
To show that new ideas do actually
exist, Herter Studios founder and former Chronicle
publisher Caroline Herter bounced a few of them
off the podium, including an equity partnership involving
Toni Morrison (in which she would give her imprimatur
to selections for a first-fiction book club) and an
Avon-style romance club where readers double
as salespeople, throwing the literary equivalent of
Tupperware parties. She also testified to the vigor
of that old customer-response gig, the focus group.
After getting some kids in a room to hear them shred
some of her interactive designs, she was sold on the
spot, confessing, "I had better ideas coming out
of a group of 13-year-olds than from my adult marketing
meetings all year long."
Living in the Post-Present
But nobody bedazzled attendees
quite like Lester Wunderman, the inventor of modern
direct marketing himself. "Direct marketers are the
only true beneficiaries of the Internet," he said,
stealing more than one speaker's best lines and pretty
much consolidating the entire day's proceedings into those
10 words. His proof-of-concept was something called the
"post-present," which is sort of a now that
has already become the future - or a McLuhan-esque transition
already felt but not quite grasped. Wunderman delved right
in to remind publishers that the increasing fragmentation
of the known universe need not be seen as a threat. "In
the post-present," he intoned, "a great premium
will be paid for original thinking," and at that
moment there may as well have been a halo around his head.
As other panelists reiterated, publishers are sitting
on one of the most valuable assets in this new world of
post-whatever - intellectual property.
On that note, much was said
pro and con on the subject of disintermediation (see
p. 3), with Zelnick issuing a dissenting opinion that,
given the thousands of people who are banging out pre-IPO
business plans - making them precisely the intermediaries
who are supposedly being squeezed out - reports of mass-slayings
of retailers and distributors are premature. Nonetheless,
in a rebuttal by Seth Godin, Yahoo! guru
and author of Permission Marketing, it was suggested
that, with the 100,000 email addresses he's slyly collected
on the site for his business bestseller, he could self-publish
his next opus with the aid of a few hundred thousand
well-targeted promotional emails. Similar arguments
were elaborated with respect to the hands-down ogre
of the post-present, Amazon. "They've got
the front end mastered and they've got the back end
mastered, and now they just need the little stuff in
between," warned investment banker Kemp Battle
of Tucker Capital. "You guys are the little
stuff in between." In one scenario, Amazon could
make a deal with Tom Clancy to publish his next
book, whereby Clancy sends a personal and confidential
email to 15 million people, and rakes in $18 million
for his share, gives Amazon the same cut, and throws
$4 million to Donnelley to print the stuff up
on demand. To which Godin replied, after scanning the
room for author's guild thugs wielding brass knuckles:
"Don't let your writers own this stuff, or you'll
be in the ridiculous, naive business of building brands
you don't own."
Fair enough. Just one more question.
Why the flip-chart, Strauss? "To remind all of
us that no matter how much the new media changes things,
one thing never changes," said Zelnick. "It's
the idea that counts." In other words, the medium
isn't the message. The message is the message.
©1999 Publishing Direct
