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January 19, 2018

Publishing News

Manhattan DA Raids Newsweek HQ
NY Post: "About two dozen investigators from the Manhattan District Attorney’s Office converged on the downtown newsroom of Newsweek on Thursday, taking photos of computers and servers, sources said. In addition to the newsroom, the fifth floor of 7 Hanover Square also houses Newsweek Media Group, the publication’s parent company, formerly known as IBT Media. The investigators, who arrived shortly before 8 a.m., focused on the computers’ serial numbers--and walked out six hours later carrying several of the servers, sources said. The probe is believed to be connected to Olivet University, the San Francisco school tied to the controversial South Korean evangelical pastor David Jang, one source said. Jang has close ties to the founders of IBT Media. A lawyer for the company, in a brief talk to shaken and mystified staffers roughly halfway through the raid, said the police action was part of a 17-month investigation... Late Thursday, Newsweek Media Group acknowledged that agents from the DA’s office had been searching their servers for the better part of the day. 'Representatives of the New York County [Manhattan] District Attorney’s Office visited the New York City offices of Newsweek Media Group today to conduct a search of the company’s computer servers to obtain technical information about the servers. The company provided the DA’s representatives with access to the computer servers on location to allow for a technical inspection within the law. No information regarding the company’s content, stories, personnel, or sources was given and Newsweek Media Group has been assured by the DA’s office that the investigation is not about any content-related issues,' the statement said. The company said it is cooperating with the probe. Meanwhile, Etienne Uzac, a co-owner of Newsweek Media Group, was slapped with a $1.2M federal tax lien by the IRS on Dec. 12, according to a record obtained by The Post. Uzac founded the company in 2005 with Jonathan Davis, and together they purchased the money-losing Newsweek in 2013. Uzac is married to Marion Kim, who is tied to Olivet and has served as a translator for Jang. The IRS declined to comment on whether the raid Thursday had any connection to the outstanding federal tax lien, which included $448,313 from June 2016, $455,167 from September 2016 and $343,778 from Dec. 31, 2016. Jang had used Korean and Chinese citizens with student visas who attended Olivet University to secretly work on IBT matters in its early days, according to reports. The company denied the claim at the time..."

Clich Here

Study: Marketers Plan To Up Spend on Publishers' Branded Video
MediaPost: Marketers are upping their investment in branded video created by publishers, according to a new “Digital Video Outlook” survey from Trusted Media Brands study. "Nearly 38% of marketers in the survey believe branded video is increasingly more important to their overall video strategy than traditional digital ad formats, such as pre-roll, mid-roll and post-roll advertising, vs. 23% for agencies. 37% of total marketer and agency respondents claimed that branded video and pre/mid/post roll are equally important to their video strategy. 33% of marketers said they'll increase their ad spend on publisher-produced content, and 35% will increase spending on creation or distribution of branded video in the next 12 months, vs. 28% for pre-, mid- and post-roll. 44% of marketers and agencies agree that publisher-driven content connects better with audiences than content created by an independent content agency or sometimes the brand itself. 'As brands seek ways to efficiently produce video to engage their key audiences, branded video will continue to grow in importance,' said TMB chief digital officer Vince Errico. 'Marketers will view publishers as trusted content creators because of their ability to create visually exciting content in brand-safe environments.' Digital marketers said that one of the top benefits for distributing video on premium publisher sites was a brand-safe environment (39%). They also cited publishers’ expertise in content creation (33%) and measurement (31%). TMB surveyed about 300 U.S. digital media decision-makers from the Advertiser Perceptions Omnibus Panel. The survey was conducted in November 2017."

How New In Touch Editor Published Bombshell Interview
NY Post Page Six: "The brand new editor of In Touch Weekly had the unlikely experience of arriving at his new job to discover that there was a world exclusive about the president of the United States of America gathering dust in a drawer. James Heidenry joined Bauer Publishing from rival American Media Inc. in October--and, on Wednesday, [published] a jaw-dropping 2011 interview with porn star Stormy Daniels in which she claims to have had an affair with Donald Trump shortly after wife Melania Trump gave birth to their son, Barron. Sources say that the interview was never published because of a complicated combination of legal threats from Trump’s team and a management policy that shied away from covering politics at the celebrity-driven title. But we’re told that after the Wall Street Journal published a report on Jan. 12 alleging that Trump’s team paid Daniels $130,000 to deny the affair ever happened, the magazine--which has a new team of corporate execs--searched for the interview and pulled it out of mothballs. An In Touch spokesperson declined to comment."

Dorothy Kalins Elected to Magazine Editors’ Hall of Fame
The board of the American Society of Magazine Editors today announced the election of Dorothy Kalins to the Magazine Editors’ Hall of Fame. Kalins will be honored at the Ellie Awards annual luncheon on March 13. From the release: "Kalins led Metropolitan Home to the National Magazine Award for General Excellence in 1990 and was later named vice president and editorial director of the Meredith Design Group, which included Traditional Home and Country Home as well as Metropolitan Home. In 1993, Kalins became partner and editor in chief of Meigher Communications, where she was the founding editor of Saveur and relaunched Garden Design as a national consumer magazine. In its first five years, Saveur received 17 nominations for National Magazine Awards and won three, including the award for General Excellence. Kalins joined Newsweek as executive editor in 2001 with responsibility for rethinking reporting and design processes. She helped direct the magazine’s National Magazine Award-winning coverage of 9/11. In 2006, she launched Dorothy Kalins Ink. As director, she and her team collaborate on book and magazine projects both here and abroad, consulting on editorial positioning, management, staffing and design as well as producing and writing cookbooks..."

Amazon's Ad Business Is Growing Faster than Google's, Facebook's
Digiday: "Amazon is on top of every marketer’s mind today. Google and Facebook combined still represent more than half of the U.S. advertising market [also see news item below], but Amazon’s ad business, while just 2.5%, is growing faster than both of them, according to speakers at AdExchanger’s Industry Preview in New York City. Scott Galloway, founder of consultancy L2, predicts that digital ad revenue for Amazon Media Group, Amazon’s in-house team that sells ad products, will grow more than 40% YOY. That’s faster than Facebook, which is poised to grow about 25%; and Google, about 15%, he said. Galloway, a marketing professor at NYU's Stern School of Business, said Amazon has aggressively hired marketing talent from top universities over the past year or so. 'One in eight kids in my class goes to work for Amazon,' Galloway said. Another presenter, Geoff Ramsey, co-founder and chief innovation officer for eMarketer, said that although the duopoly accounts for more than 65% of U.S. ad spend, compared to 2.5% from Amazon, Amazon was the second-fastest growing advertising company last year, second only to Snapchat. Ramsey estimated that this year, Amazon’s ad business will increase by 42% compared to a year prior. He didn’t give baselines. 'Facebook and Google are also under increasing pressure to clean up their acts,' he said. 'Brands want to be in a safe environment. Trust is becoming a real issue [for Facebook and Google] in light of activities like fake news.' Amazon’s consumer-obsessed culture has helped it win advertisers, Seth Dallaire, VP of global advertising sales and marketing for AMG, said... Amazon’s growth in advertising can also be attributed to advertisers gradually adopting e-commerce as a marketing discipline, he said..." In a related piece, Bloomberg reports that "For the past five years Amazon’s average profit margins have languished at about 1%. Now, along comes a business that could generate consistent and healthy returns: It’s called advertising. Over the past several years, Bezos & Co. have quietly put together the pieces for a marketing platform that lets Amazon make money from the sheer size of its audience. Having bet on Amazon cloud services and pushed the shares past $1,300, investors are now salivating about the ad business, which doesn’t require big investments in new data centers or shipping hubs and generates fat margins. On Monday, BMO Capital Markets upped its Amazon price target to $1,600 a share, based largely on the growth of the ad business. Some analysts are predicting Amazon will reach $2,000, making it the first company with a $1 trillion market value. 'Advertising is the most profitable business in the world,' says Jay Kahn, a partner at Light Street Capital, who notes that Chinese e-commerce giant Alibaba Group Holding Ltd. gets more than half its revenue from ads. 'For Amazon, advertising is going to be more profitable than its cloud business'"...

Facebook, Google Still Dominate As Video Ads Grow
MediaPost: "A new study commissioned by cloud computing giant Salesforce shows that Google and Facebook continue to dominate the world of digital advertising, and are adapting as more and more marketers and advertisers turn to video. According to Salesforce’s Digital Advertising 2020 Report, 65% of companies increased their video advertising budgets over the past year. 52% of advertisers are choosing to produce their video ads in-house. While video ad spend increases, Google and Facebook continue to dominate the overall digital ad spend landscape, with Salesforce estimating that over the next year, the two companies (and subsidiaries Instagram and YouTube) will account for 66% of all digital advertising spend worldwide. And while Salesforce estimates that display ads, which it says account for 15% of the market, will decline over the next year to 14%, YouTube, which currently accounts for 15% of the market, will grow to 16%. In other words, as display ads decline in favor of video, Google is positioned to pick up those pieces. The report also found that digital advertising and marketing are continuing to converge, with a majority of companies now using the same teams and budgets for both purposes..."


Retail News

Whole Foods Employees Say New System Is Creating Out-of-Stocks
BI: "Whole Foods employees say stores are suffering from food shortages because of a newly implemented inventory-management system called order-to-shelf, or OTS. Whole Foods says the system reduces unnecessary inventory, lowers costs, and frees up employees to focus on customer service. Employees acknowledge that less food is spoiling in storage rooms, but they describe OTS as a 'militaristic' system that crushes morale and leads to many items being out of stock. 'Last week, we ran out of onions and potatoes twice,' an employee of a Brooklyn Whole Foods store said. 'Entire aisles are empty at times.' 'It has for weeks had empty shelves, and I shop there twice a week,' one customer told Business Insider. 'The prepared-food section is not refreshed, and food looks stale.'" MediaPost's Thom Forbes rounds up coverage that on the one hand shows WF boosting Amazon's share of online grocery sales, and on the other, coverage--from BI and other sources--showing operational struggles within WF.

Walmart Invention Aims to Drive Online Perishables Sales
SN: "Walmart has filed a patent application for a system that would allow customers to view individual fresh items remotely before purchasing them. The patent was filed last year and was recently published, as reported by data and analytics firm CB Insights. The "Fresh Online Experience,” or FOE, would allow customers to order produce, meat and bakery items online using stock photos, but then have the opportunity to approve the actual items being purchased via image scans (either two- or three-dimensional) sent to them by Walmart store workers. Once an item is approved by the customer, an 'edible watermark' could be applied to the item before it was packaged for pickup or delivery to verify that it was the item the shopper had selected... The system could also be automated to reduce the involvement of store personnel, according to the filing. The invention seemingly seeks to overcome one of the barriers to online grocery ordering by giving consumers more control over the fresh items they select..."

Kroger Recruits for Management, Supplies for Shoppable Recipes
PG: "Continuing to deliver on its Restock Kroger strategy, Cincinnati-based Kroger Co. revealed that it's actively recruiting for management roles at the same time a shoppable recipe platform is adding more than 1,300 stores and its ClickList ecommerce service throughout 17 states to its list of associated retailers. The company is looking for experienced retail and digital/technology talent for new and open management roles at corporate and store levels across all of its divisions. The initiative is part of the company’s plan to invest an incremental $500M in human capital over the next year, which will be in addition to Kroger’s continued efforts to rebalance store associate pay and benefits while focusing on certifications, performance incentives, advancement opportunities and associate training..."

New Tax Rules Affect Compensation at All Levels
SN: "Tax reform could translate into paycheck reform for many food retail workers as companies look to enhance the in-store experience for customers and attract and retain employees that can provide that experience. Several retailers have already announced bonuses for employees tied to the windfall that companies will receive as a result of the legislation, which cuts the corporate tax rate to 21% from 34% and modifies certain tax deductions. In addition, the boost to the bottom line that the tax reform is providing could force companies to recalculate the performance-driven bonuses they pay their top managers, said Jose Tamez, managing partners at executive recruiting firm Austin Michael. 'Any additional income on the bottom line that comes from tax reform would not be based on performance, or any activity that the executives were a part of,' he said. 'So companies are going to have to rethink those calculations for anyone who has a bonus tied to income performance. 'That's a good thing,' Tamez added, 'because if the performance bonus of senior executives is tied to measures that were drafted three or four years ago, you could make a case that their shelf life has expired.' In addition, the tax reform legislation eliminates the ability for public companies to deduct performance-based compensation in excess of $1M paid to certain executives, now including for the first time chief financial officers. The scope of companies impacted by this rule was also expanded to include companies that file reports with the SEC based on having publicly traded debt..."

Group Forms to Preserve, Update NAFTA
PG: "A coalition of more than 30 organizations representing growers, refiners, producers, transporters, retailers and consumers has formed Americans for Farmers & Families (AFF), whose aim is to ensure that President Donald Trump and federal legislators understand the importance to America’s agricultural and retail economies of preserving and modernizing the North American Free Trade Agreement (NAFTA). Grocery industry members of the coalition include Food Marketing Institute, the Grocery Manufacturers Association, the National Grocers Association and Walmart. According to AFF, since NAFTA took effect in 1994, its positive effects have enabled the food and agricultural industries to grow to support more than 43M jobs, but rural economies and communities have benefited most--the same communities that gave Trump his electoral victory in 2016. The coalition further pointed out that under the agreement, food and agriculture exports have skyrocketed, domestic jobs have grown, and U.S. grocery prices have stayed affordable for consumers. 'Farm Belt voters supported President Trump by a three-to-one margin in the last election, and they are counting on [him] to improve NAFTA in the modernization negotiations,' said John Bode, president and CEO of the Corn Refiners Association... 'It’s not an exaggeration to say many farmers are still farming today because of NAFTA'"...


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