Wednesday, October 26, 2011

Afternoon brief: MPA in search for new CMO; an update on Ziff Davis Enterprise's all-digital strategy; Amazon's anticipated losses make some investors a bit nervous

Lucia Moses of Adweek is reporting that the MPA, formerly known now as the Association of Magazine Media, has lost its chief marketing executive only 14 months after he was brought on board.

Andrew Jung, formerly with Kellogg Co., was hired in August 2010 to promote the association and its magazine members. But promoting a medium like magazines is not exactly the same as promoting a consumer product and so, apparently, things have not worked out as planned. Frankly, I can not blame Jung, it is always nice to have a budget.

Yesterday afternoon I wrote about the plans of Ziff Davis Enterprise to go all-digital, closing its print magazines in 2012. Today the company released a press release that spelled out what the company's first moves will be.

According to the announcement, Ziff Davis Enterprise will be releasing next month a series of newly optimized websites and a portfolio of "native" apps for all the major mobile platforms – iPhone, Android, BlackBerry, Windows Phone 7, and Symbian/Nokia-powered smart phones, as well as apps for the iPad, RIM Playbook, and Android-powered tablets.

(I put "native" in quotes because there are reports that they company will be working with Texterity, the maker of digital flipbooks, not exactly a producer of "native" apps.)

Ziff has even come up with a cute name for their digital strategy: Omni Digital.

The strategy, the company says, involves creating mobile optimized websites, tablet optimized websites (I assume this means HTML5 touch controlled sites), native apps for both smartphones and tablets, traditional websites and digital editions of the magazines (presumably to appear on the websites and in digital newsstands).

It will be interesting to see what the B2B Ziff can offer up next month – we'll definitely be watching for the launches.

"The future of engagement is mobile, it is social and it is entirely digital," Steve Weitzner, Ziff Davis Enterprise CEO said in the company's announcement. "We intend to drive the digital marketing standard for B2B tech media and accelerate the 'anywhere and everywhere' consumption of content by exploiting the rapid adoption of mobile and tablet devices in the IT community. We are focused on providing a comprehensive and tightly integrated digital engagement portfolio to help technology vendors with their toughest marketing tasks by facilitating interaction with buyers throughout the purchase process."

If you are an investor with holding in the online retailer Amazon you are not lovin' life today. Despite an up day for the market around 13 percent today after the company reported its earnings yesterday afternoon – earnings that fell short of expectations and the company said that it might post a $200 million loss in Q4.

The losses, of course, are anticipated in part because Amazon has entered the tablet market with a $200 tablet that will actually drive losses (and revenue) instead of profits. How much the company will lose is a matter opinion – I've heard $50 per tablet, Bloomberg is quoting the research firm IHS Inc. as estimating that it is $10 per tablet.

Amazon CEO Jeff Bezos's biggest mistake has been not more strongly warning investors. For that, according to Bloomberg, Bezos himself has seen the value of his stock fall $2.2 billion in value. (A billion here, a billion there, soon you're talking about real money.)

But is the strategy wrong? My own experiences in the media business definitely create a bias in me – I was once a classified advertising manager and was solidly in the camp that pushed for volume. Volume creates markets, it pushes out competitors, and it builds brand. Done right, a volume strategy will result in huge gains in revenue, and healthy profits. Done wrong, a volume strategy will result in huge gains in revenue, and unhealthy losses.

I doubt that Bezos hasn't bet the farm on his tablet strategy, but he has certainly created a lot of nervous investors, and some analysts have begun advising their clients to sell Amazon stock.

But as we all know, if an analyst says sell, it is often a good time to buy.

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