Wednesday, May 23, 2012

The 142 million dollar question!

The 142 million dollar question--"Why did Warren Buffet spend 142 million dollars on a bunch of newspapers when everyone knows that print is dead?"  Perhaps the answer is that Warren Buffet is not "everyone," in fact he is one of the smartest business people in American history. The secret of Buffet's success is his knack for seeing value that less astute observers miss. While most investors were listening to the "experts" he took a look at the financials of the publishing industry. In his typical understated manner, Buffet said  "I think the economics (of newspapers) will work out OK. It's nothing like the old days, but I think it will work out OK." One of the keystones of Buffet's investing strategy is his belief in buying businesses that provide good value to their customers and fill a marlet need. On this subject he said "Newspapers are still primary in many areas. They still tell me something primary that I can't find elsewhere." Warren Buffet takes a long-term view, buying firms that are positioned for consistent earnings and incremental growth. This is why he chose to prchase a firm heavily weighted toward community newspapers. Here's what the "sage of Omaha" said about our industry "In towns and cities where there is a strong sense of community, there is no more important institution than the local paper." The next time someone tells you that "print is dead", tell them that the most successful business person in the US strongly disagrees. 

Monday, May 14, 2012

Advertising in tough times

Customers often ask us, What is the cost of advertising?" The question they should be asking is, "What is the cost of NOT advertising?" The price of advertising can be counted in dollars and cents, the cost of not advertising is immeasurable, not advertising can result in bankruptcy. We are selling the one thing every business needs--CUSTOMERS! Look at this information collected by the National Federation of Independent Businesses (NFIB)and reported in the December 28, 2011 edition of the New York Times:

1 in 4 NFIB members believe their biggest problem is weak sales.

William Dunkelberg, chief economist for the NFIB, expressed it this way: "The key to everything is cash coming in the front door." This is what we deliver, customers with cash in their pockets walking in the front door or picking up the phone to do business with our advertisers.

Never forget:

 Nobody wants to buy advertising--everybody wants more customers!
Don't talk to your customers about your paper, talk to your customers about your readers. That is what they really want to buy.

Take it easy, but take it!

Thanks for reading.

Jim Busch

Friday, May 4, 2012

"Escape" Television

When I talk to a business owner who is considering advertising on television (Cable or Local Broadcast) I ask them if they watch "Escape Routes" on NBC. Escape Routes is a television program that was produced by the Ford Motor Company and given at no charge to NBC. NBC could air the program and sell advertising around it, the only stipulation being that the network would not sell any other automotive ads on Escape Routes. This show features a group of young adults traveling around the country in their Ford Escapes and trying to win a new Ford by competing in challenges. This is a full 60 minutes of product placement. Ford decided to go this route (no pun intended) when they looked at the results from their advertising on American Idol. Coke whose products were featured during the show did much better than Ford who used traditional commercials. Ford realized that 44% of US homes now own a DVR (Digital Video Recorder such as a TIVO) This is an 11% increase in ownership of these commercial killing machines over just two years ago.Research indicates that DVR owners fast forward through more than 1/2 of the commercials during the programs they watch. Ford countered this trend by building their products into the show's content but this option is not available to small business advertisers. Thess devices coupled with the growing number of people who are watching TV on their laptops and tablet computers greatly reduces the impact of TV advertising.

These are good points to share with prospects to get them thinking before they commit their budget to television.

Take it easy but take it!

Thanks  Jim Busch