Scott Pellicone, VP, Digital Publishing, Quebecor World, Magazine Business

In fact, by publishers migrating to an electronic electronic edition, we soon will be able to provide the selective serving of advertising content. The industry is aware of the need for this type of functionality, and QW is constantly for companies to invest in that can provide interactive marketing and analytic services. As I mentioned earlier, it is all about targeting. Catalogers right now use analytics to basically thin down their print run. It’s about printing fewer editions but more often, and more targeted.

If they could actually use other vehicles — like the internet and certain sweepstakes and clever mechanisms to identify who’s interested in receiving the catalogue, they don’t need to print as many. So it’s part of that whole targeted response.

MM: Yes. Totally.

One of the things you just touched on is that cataloguers in particular — and magazines maybe to a lesser extent — now use analytics to basically pare down print runs. And to better segment or micro-segment aspects of their portfolio to those audiences or markets that will provide the greatest revenue for the investment.

SP: Yes.

MM: So not only does this mean that we’re doing shorter runs, but we’re doing more analytic-driven or analysis-driven production workflows. Creative in-production workflows.

So the analytics are kind of creeping like salmon moving upstream. The analytic part is moving farther and farther upstream to, “What should we create next week?” What does the data [inaudible] process of ours in our content workflows?

So, analytics become — as opposed to a scorecard — record-keeping forensic, “What happened?” The analytics now are becoming much more integrated to the actual ideation and creation process.

SP: Okay. I would totally agree with that. Analytics basically takes over for telemarketing.

MM: Yes.

SP: Telemarketing will be replaced by analytics. The catalogue is really becoming more like a direct mail piece. It’s basically identifying offers to the end-reader, so they can go to the website and buy it.

MM: Yes.

SP: Today it is very rare for a catalog reader to actually fill out the order form and mail in their order.

MM: A colleague of mine said that the catalogue is actually becoming a product placement, and a user-interface to what’s on the web. What consumers real want is — they like the high-fidelity color-corrected print thing, but then they want to know what the social media around it is. What are the forum discussions and blogs around that particular thing? And are there rich media — like video or Flash animations that show various use cases and/or slice-of-life uses of this product?

SP: Exactly, in fact most people tend to perform their research on the internet to view the best possible combination of features, as well as the most competitive pricing before making a purchase.

MM: Right.

SP: If we parallel this to real life for example, let’s say that you were interested in purchasing a plasma television. First you would go to Consumer Reports to see which plasma television has the best value. Then you would begin your search for the best possible price. Finally you will weigh all this information and make your purchase. The most efficient way to do this is via the internet.

MM: Oftentimes. But then have you ever tried to put a 50-inch plasma on the wall? You discover there are some very specific skill sets of hanging a 100-pound thing on the wall.

SP: Right.

MM: So I’m back to Circuit City.

SP: The other point I wanted to make was, we mentioned that the catalogue is becoming more of a direct mail piece. The magazine printed edition is becoming more of an advertisement piece for the web.

MM: Right.

SP: Almost like the newsstand is more of the product placement for the magazine.

MM: And you can go online and see it for free.

SP: Exactly.

A lot of things are changing. I think the newsstands eventually are going to change and things are going to migrate more to the web.

And we are going to see a lot of portal technologies. Electronic newsstands will be pushing relevant content to your mobile device. Then there’s going to have to be some sort of hooks back to the printed edition.

MM: Today, we touched upon the transformation of the magazine business into a multimedia platform, where the magazine becomes really a facilitator for driving people on the web — to where they can get a deeper and richer interaction, and where you can more specifically and more concretely quantify for your advertiser the added value of the magazine.

These digital supply chains have done a couple of things. One is really to have put an emphasis on the digital logistics piece, which you guys of course address. But it’s also enabled an organic redistribution of work and workflows to lower-cost areas — specifically into centers of excellence. Highly automated low-cost, high-quality operations.

As we move forward, we begin to see that analytics play a much deeper, more pervasive role in the actual business of this supply chain. Analytics about the ultimate consumer of the content, as well as the value of various segments of consumption and/or interest.

Ultimately, these analytics start to drive not just advertising rates and things like that, but these analytics start to drive the actual creation of the whole content and brand and segmentation strategies.

So it seems that in terms of a key stakeholder in the digital supply chain, it seems that analytics become a center of excellence in that DAM is a natural collection point for a whole bunch of structured data that will become increasingly useful, and strategic in an overall analytic framework. And that data mining and business intelligence and benchmarking and scorecards become really core or central to who gets invited back to play in the digital supply chain as a logistics provider.

SP: I totally agree.