Dell advertisements in Saga

Unlike most people, when I receive a magazine, I am more interested in the ads than the editorial. This applies even more so to Saga. This is not a reflection on the quality of Saga's writing but it more interesting, for me at least, to see who is advertising what and in what way.

To the best of my knowledge I spied the mag's first Dell ad, and from what I can see, it is pretty much age-neutral. Maybe they have increased the font size a bit but it looks the same as those in any other mag. If I find any major differences I will blog again about the subject. Dick Stroud

Sagazone revisited

The last time I had a look at Sagazone was back in April.

Since then I have completed a questionnaire asking for feedback about the site. The ‘thank you’ e-mail listed the things people liked and/or wanted to added:

Interest groups
Space for experts to pass on their knowledge online.
Becoming a focal point for the major issues of today
A 'travel planner' with travel information and news of forthcoming events
A mechanism for trading goods online.

These all seem reasonable requests. Since April the number of registered profiles has increased to 44,000 which means the site is adding a 100+ new profiles a day. I am not sure if that is fast enough to substitute for the rate that profiles become inactive but it is faster than at the begining of the year.

Why the photo? That is what you get when you go to http://www.sagazone.com– maybe a bit more of this would help increases the numbers of older gentlemen. Dick Stroud

Fire the PR agency they have been too successful

Sex in the City – the film – has hit the UK. You cannot pick-up a paper, turn on the radio, switch on the TV without one or all of the programme stars doing an interview, walking arm in arm down the street or in some other way promoting the film. Don’t get me wrong I can think of a lot of other people I would prefer not to be hogging the communications channels.

I suspect the promotional campaign has gone way past that point of optimum impact and is now into the danger zone between boredom and annoyance.
The reason for this story is that of course Saga Magazine has Kim Cattrall on the front cover plus pages of film coverage.

As I was looking to see what insights Kim had on the plight of the world’s starving I had my usual quick flick through the magazine. I was stuck by how tired it was looking and how bereft of Class 1 brand advertising it has become. OK, there is a Dove pro.age ad but it is followed in a couple of pages by one for a cat’s charity.

I get the feeling that the magazine is moving imperceptibly towards the cat’s charity end of the spectrum rather than the pro.age.

Maybe I am wrong, maybe it was a bad month for advertising; maybe it is the result of rejecting all advertising from competitors to Saga. Any Saga staff reading this and want to explain what is happening? Dick Stroud

"Be careful what you wish for, lest it come true"

An alternative title to this blog entry is - Full marks to PR department – fire the technies.

I have just received this quaint little note.

I am not too sure if the small font on a green background with a serif font is a good idea. But if you are going to break one rule of “50-plus friendly” web sites you might as well blow a couple of more for luck.

The e-mail rambles on to say: “my apologies for any inconvenience these 'growth pains' may have caused over the last week”.

Well done Saga for generating so much buzz but surely a company worth £6 billion can get the IT right. What’s the betting that SagaZone was a skunk works development and the whole thing was probably being run on a couple of clapped out servers with limited bandwidth Internet connection. Dick Stroud

Saga IT man replaces AA counterpart

Never did I expect to see this headline. Saga has always been known as a moderately smart direct marketing venture but never a leading or even a trailing edge IT company.

Saga and the AA are both in private equity ownership and earlier this year; with a bit of financial jiggery pokery, they were merged. Nobody ever provided a satisfactory answer why, other than to help the financial engineering of the finance companies and probably the bonuses of the managers.

Now Saga takes over the AA’s IT. Weird. Dick Stroud

Over-60s divorce boom

The only age group to show a rise in the divorce rate last year was the over-60s, the Office for National Statistics announced on August 31, 2006.

Whilst the divorce rate in England and Wales fell by 8% overall last year to its lowest level since 2000, there was an increase of 2% in the number of women aged 60 and over divorcing. There is further coverage of the story on the Saga Web site.
The absolute numbers of divorces is relatively small. In 2005, 8086 husbands and 4671 wives, over-60, petitioned for divorce – (each gender’s figures are listed separately as each party may fall into a different age band). Even so it further proof that the old certainties of ageing (like domestic stability) cannot be taken for granted. Dick Stroud

Saga launches a price comparison site

I am normally very rude about Saga’s use the Web. In recent months they do seem as if they are getting their act together and treating the Internet as a business tool rather than as an irritant.

The company has just launched a price comparison site for car insurance called ConfidentCover.com. Seems like a good idea. I don’t want to spoil the fun too much but it would have given the venture more credibility if partner sites included Rias, esure.com and Intune. These are Saga’s main competitors in the 50-plus market. I am sure I will not be the first or last person to point out this omission. Dick Stroud

SAGAzone a place to hangout?

Mmmmm not sure. SAGAzone is like all social networking areas it depends what type of person you are and what you want from an electronic dialogue.

For any readers who do not about SAGA – it is the UK’s first and by far largest company that is dedicated to all things 50-plus (finance, travel, etc). It is valued somewhere around £2 billion. Now whether that is a sensible valuation is another question, but that can wait for another day.

The site is competent. Everything seems to work but compared to eons.com it is at first base.

Some facts. Using the onsite search facilitity it looks as if there are 11,700 signed-up members. It is not clear when the thing started but it looks like it was sometime in March 2007.

Because I am a nice guy I will save you the hassle of working out how they divide by age and gender. I know there is a difference between the total numbers. I guess that is due to people withholding their age or a flaw in the Saga system.

Two things surprise me about this analysis. Firstly, the number of men – I would have expected the users to be primarily women. Second, the youthfulness of users – I would have expected it to have trended older.

What are these 11,700 people talking about? Have a look at the analysis. Again I am surprised. ‘Relationships’ is way down the list and things like Gardening, Health, Money and Technology are ziltch. Chat and Soap Box are the big traffic generators.

I am not sure what to make of all of this. All bright ideas welcomed. Dick Stroud

Chance wasted to shed clear light on this AA-Saga deal

A lot of people are scratching their head about this merger/acquisition and asking the question: ‘Why’.

The Lombard article in today’s FT sums up my take on the market’s sentiment. This is an edited version (sorry subscription only).

The creation of a new company that will make money from holidaying over-50s as they reminisce about how uniformed AA patrolmen used to salute passing drivers is probably a good thing.
If any private equity deal justified a clear explanation of its benefits, it was this one. As investors in the AA, Permira and CVC have had enough stick from unions and the popular media to know better.
They and Charterhouse Capital Partners, Saga's main investor, should have presented the terms of the deal in public markets style - headlines, objectives, potential synergies, financial structure - and in sufficient detail to avoid arid and damaging speculation.

I am even more convinced that this deal has nothing whatsoever to do with business synergy and all to do with clever accounting. Dick Stroud

Saga to acquire/merge with the AA

What an astonishing development. Quote from the BBC:

"..Saga, which sells holidays and other products to the over-50s, is to buy the motoring giant AA in a deal valuing the combined business at about £8bn.
Saga and the AA are owned by private equity groups..."

I wonder how much of this has anything to do with the business synergy between the companies. Being a suspicious person I think it most likely driven by some very fancy financial engineering by the lawyers and accountants in the private equity companies.

This news is likely to generate a hell of lot of hot air in the UK as pundits try and understand the ramifications behind the deal. Dick Stroud

Saga feels the heat of the Single Equality Act

I have a rule to not comment on the idiocies of politicians in my blog postings. But it is Saturday, it is a beautiful morning and so what the hell, rules are there to be broken.

Politicians in the UK are, in the main, a well meaning bunch but are not the brightest group of people you are likely to meet. Most of them are on a mission to solve the world’s problems, well at least to talk about solving them, but cannot think further than the end of their nose when it comes to the policies they cook-up to do this. So it is with the Single Equality Act.

The UK has commissions for all sorts of ‘inequality’ (real or assumed) and to make a mess worse it has been decided to combine them all into a super-commission for ‘equality’ to enforce this new legislation that will cover gender, sexual preference, religion, race and AGE. This brings me back on track to subject of 50-plus marketing.

If you cannot discriminate in terms of age what happens to companies like Saga? It seems nobody has thought of this problem other than the folk at Saga.

The Times published the details of a memo that Saga sent to Government explaining their predicament:

We fear the unintended consequences of such legislation might be to subvert our cruise and holiday business, and our financial services business, whilst causing great collateral damage to our brand.

“One must also question whether Saga as a business could survive if it is forced to abandon its ethos, its branding so painstakingly built up, and to suffer the inevitable perturbation of its local customer base.”

This legislation will, theoretically, have implications for all types of 50-plus marketing. Paul Green, Saga’s communications chief, said: “There is a danger from blunderbuss legislation. It could bring to an end older people enjoying discounts on their fish and chips, or cheaper care insurance.”

Ministers will publish their plans for the Single Equality Act next month – I will read it with interest.

Of course what this legislation doesn’t even begin to address is the culture of youth that pervades the way most companies operate. Will it mean that new products and services must all be equally accessible to people of ages – NO? Will it mean that companies will have to change their marketing to provide equal consideration to all ages – NO.

What it means is that politicians can preen themselves for having done some good whilst actually not changing things a jot, other than to screw up the workings of the market. What a bunch of dimwits. Dick Stroud

What does the flotation of Saga prove?

Charterhouse (Private Equity company) bought Saga in October 2004 in a £1.35bn management buy-out deal from Roger de Haan. The price accounted for about 13 times earnings before interest, tax, depreciation and amortization.

Three years later it looks as if it will be floated on the UK stock market. Estimates range from £2 bn to £3 bn.

During the time the company has been in the hands of the private equity firm, turnover has jumped by 80% to £689.1m while earnings before tax, depreciation, interest and amortization are up almost 69 per cent to £158.2m. It is estimated that 80% of the company’s profits come from its financial services business (health, motor and home insurance and savings products)
The number of staff employed has grown by more than 28 per cent over the same period to 3,854.

It looks like the MD of the company will make around £200 million from the deal and other members of staff will see a rise in their bank balances of £46,000 (according to the FT).

So what does this tell us about what appears to be a significant growth in business performance?

Was Saga badly run under the previously management?
Did the previous owners sell too cheaply?
Is the new management team a group of magicians?
Does the organic growth of the over-50s market, driven by demographic change, account for the performance improvement?

I am sure the answer is that that all of these points have contributed to the increase in the company’s value and we will not really know the real reasons until the financial figures are published, pre-flotation.

From what I can see, Saga has not done anything materially different during the past 30 months other than sell it Radio stations.

I am sure the company has benefited from the injection of new professional management. I also guess that it was previously sold too cheaply.

I think the main explanation for Saga's success is that it is now a more focused and better managed company that has benefited from a fast growing market (over-50s), with low levels of churn in its older customers and a moderately competitive product line.

But, I still have my doubts about the long term position of the company since its new generation of over-50s customers will be far more demanding than its large but continuously diminishing older customer base.
Dick Stroud

Eat your heart out Saga

I like dealing with the Dutch. Maybe it is because the Brits and the Dutch have a very similar sense of humour.

I have just returned from New York where I was speaking at an event staged by Bayard Press, the publisher of Plus magazine. This magazine is published in the Netherlands, Belgium and has just been launched in Sweden. Brent Green was the keynote speaker at the Swedish launch and has posted a great video on his blog.

I was joined in New York by Chuck Nyren and some other fascinating people involved in the 50-plus market. Laurel Kennedy of Age Lessons, John McMenniman (former president of the US’s Advertising Hall of Fame), John Migliaccio, Susan Silver, Mary Duffy, and Peter Himler.

A few facts. Plus claims 1.4 million readers and has a monthly circulation of 320,000. 60% of its readers are under 65 years old and 40% are men.

Saga has a monthly readership of 1,205,000 and a circulation figure of 610,771.

Remember that the UK has 4 times as many 50-75 year-olds than the Netherlands.

The biggest difference between the magazines is the quality of the advertising. Plus is laden with multinational brand advertising, something that is still a bit of a rarity in Saga.

Even though I cannot read a word of the Netherlands version of Plus it has a much more appealing and light feel than Saga.

If there are any Saga people reading this blog I reckon it would be worth taking out a subscription to Plus. Dick Stroud

The over-50s favourite songs – NO

Smooth Radio, the newly relabelled Saga Radio stations; has conducted a survey of their listener’s favourite music (Sample size 3,760). The age profile of Smooth Radio’s audience is predominantly 50-plus.

These are the top ten songs.

1. John Lennon - Imagine
2. Chris De Burgh - Lady in Red
3. Led Zeppelin - Stairway to Heaven
4. Ben E King - Stand By Me
5. Gnarls Barkley - Crazy
6. Lou Reed - Perfect Day
7. Beach Boys - Good Vibrations
8. Simon & Garfunkel - Bridge Over Troubled Water
9. Katie Melua - Closest Thing to Crazy
10. Led Zeppelin - Whole Lotta Love

The trouble with this sort of survey is that you are really measuring the preferences of a very distinct group of people. Firstly, they listen to Smooth Radio (which says something about them – I am not sure what) and secondly they are the type of people who can be bothered (and have the time) to pick up the phone or text the radio station.

All in all a pretty meaningless exercise. Dick Stroud

Saga about to change ownership?

In 2004 Saga was bought for £1.35bn by Charterhouse Capital Partners, a private equity group, in a deal that netted the founding de Haan family a nice little nest-egg of £1.2bn.

Since then not much has happened. The radio stations were recently sold and there has been a wholesale change of management. Otherwise it looks like business as usual. Same ‘old’ Saga.

In the last few days there has been a rumour that the company is either about to be sold or floated. The figure of £2.0 bn keeps being mentioned.

Maybe the rumour has been triggered by the merger between MyTravel and Thomas Cook. Maybe Saga’s management have had a long look at the business and decided to cut and run?

Why the company should now be worth 50% more than Charterhouse Capital Partners paid for it is beyond me. Dick Stroud

Saga ditches its radio stations

SAGA Radio has been bought by Guardian Media Group (GMG) for an undisclosed sum, it was revealed yesterday.

The move is part of a bid by the group to tap into the market currently monopolised by BBC Radio 2, it said.

The regional FM radio network, aimed at the over-50s market, currently attracts around 216,000 listeners in Glasgow. It also operates radio services in the East and West Midlands.

The company said: "It is our intention to rebrand the Saga stations in due course, to a name yet to be announced." So goodbye Saga Radio.

GMG Radio recently received permission to change the format of its London Smooth FM station from jazz and soul to an easy-listening station aimed at the over-50s.

GMG looks like it intends to be the new radio sound of the 50-plus.

An interesting move by GMG – an even more interesting move by Saga. True to form, there was no press release on the Saga web site. Dick Stroud