ADOTAS – A long time ago, things got mighty comfortable in publishing land. The industry that created the ability to print a trillion newspapers every night and get them into America’s driveways by 5 a.m., got fat and happy on loads of advertising money, and they started building immense sales organizations, dedicating all their creativity and emotion to increasing readership, ad pages, and revenue.
In the meantime, the very platform that they were building this organization on was thinning and starting to teeter as disruptive technologies ate away at the foundations.
The magazine business is still a very powerful beast. Some 300 million magazines were sold last year and they generated $19.45 billion in advertising revenue, according to the Publishers Information Bureau. As our Dallas Ad League Magazine Day panelists pointed out, the average newsstand consumer still just about trips over themselves to shell out $4 to read the latest about Lady Gaga and poor, bamboozled Sandra Bullock. They still control some very powerful content and are starting to get themselves in a position to undo some of the damage they inflicted upon themselves.
It should be noted that all of the panelists issued very refreshing mea culpas when it came to the ginormous mistake of making all of their online content free, and depending on banner advertising revenue to fill the gap. Needless to say, that gap only grew wider over the last 15 years, creating the monstrous chasm that exists today. To fill it, these magazine publishers are looking at the iPad as the greatest thing since the PDF replaced film in their production departments.
Early iterations of online magazine publishing “solutions” tried to bring the advertiser value by taking that PDF and putting in online, where readers could see full-page ads, and enjoy the beautiful layouts that make print so special. Later iterations — featuring in-page video, ad “hotspots” with enhanced product information, and other interactive features—also failed, due to the nature of the engagement.
When a reader goes to the web, he is often looking for “quick bites” of content, not necessarily the longer, more relaxed, engagements that he ordinarily sets aside for a magazine reading session. The iPad and other smart mobile devices promise a reader that wants an interactive experience, but is more engaged and willing to spend time with content.
Maybe he is being held captive by a plane, train, car ride or (dare I say it) boring business luncheon. The iPad user expects interactivity, and something more than just printed content, and he is willing to pay for it.
The last part of that sentence is really what the Ad League luncheon was all about. Magazines are the king of the opt-in relationship. People pay good money to get magazine subscriptions and advertisers know that they are reaching people who are truly engaged with that content. That’s the only kind of validation that’s truly important, and it’s so much more reassuring to an advertiser than a Quantcast or comScore data pull.
People have limited time and limited money. As an advertiser, I know that I will at least have a chance to “have a conversation” with the reader that has plunked down his hard-earned money to spend some quality time with the content my ad is alongside. That translates to the web, when I start being able to charge for subscriptions — and ultimately lifts CPMs (called WSJ.com lately)? And it translates to high CPMs for whatever advertising we will start to find on iPads and other mobile devices where consumers are willing to pay for applications.
For today’s print publishers to truly recapture the ongoing attention of the modern advertiser, and stay relevant in the post-print era of modern advertising, the prescription is obvious, although difficult:
Make It Exclusive. What sets the price for any product is its supply vs. its demand, whether it’s coffee, hotel rooms, or content. New York City Mayor and media tycoon Michael Bloomberg didn’t get rich because he had the best content. He got rich because he has access to proprietary content that no one else had.
The successful content organization has to be able to have the research, stories, and data that no one else has—or present that content in a format that nobody else can match. Whether you are the National Enquirer buying off Perkins’ waitresses to get the Tiger Woods scoop or you are a B2B publisher with a trade magazine that rounds up the day’s prices for pork bellies on the Chicago Mercantile Exchange, you have to lead with content that people can’t find anywhere else easily.
The nature of the content always defines the value of the audience, and content companies always win when they can charge enough to break even on the content production, and make the advertising the gravy on top.
Make It Expensive. It’s funny how people will plunk down good money for a magazine subscription, but hesitate to pay even a few dollars a month for that same content online. A magazine is an object of beauty, with some heft and (depending on the title) conveying a certain image.
Like it or not, reading The New Yorker in an airport lounge says something about you — just as digging into an issue of ESPN Magazine or The Economist. Magazines are consumer products and sold like them, their covers designed to spur us to pay a good amount of money to grab them off the shelf.
If I am an advertiser, shouldn’t I expect a reader to be willing to pay $30 a year for all the content you produce? Shouldn’t I demand evidence that your publication is more valuable than the thousands of other free content sources available in your vertical?
Some magazine publishers are finding out that their content isn’t quite as valuable or differentiated as they would like to think. Maybe after underpaying writers, editors, designers and developers for decades on end, the reason many hot content producers set off on their own is because they see the opportunity to get paid higher prices for their content (or at least be able to own it outright). The modern magazine publisher has to get back to producing exclusive, expensive content that readers are willing to pay a premium for.
Make It Interactive: About four years ago, I was working for Nielsen and getting pitched by a highly progressive interactive company that was taking magazine reading to the next, interactive level. They had an online magazine that blended social media, video, in-page advertising, and a great package of analytics to tie it all together.
You could literally look at a typical magazine fashion shoot, mouse over the various products within the photo and get instant product information, pricing, and find out where to buy the object(s) of desire. Now add in location-based marketing with mobile devices, and you have a whole new, highly relevant type of interactivity that today’s publisher can leverage.
The fact that most magazine websites are still HTML-based and feature standard banner units speaks volumes. The problem wasn’t the concept or pricing of some of the great online magazine ideas. The problem was that Aol (and other online players) defined the platform before the best content producers could.
The magazine industry came up with the 468 x 60 banner (Hotwired.com), but AT&T had to buy into it to create the standard. Now, it seems as though the advertisers have more say in the process of establishing advertising standards than the publishers.
Chris Schembri, VP of Media Services from AT&T (the sole advertiser on the panel) made it clear that marketers were looking for leadership from their publishing partners around creating the digital content standards of tomorrow. Advertisers like Schembri need their publishing partners to create new standards that leverage technology to make their advertising more relevant to today’s audiences. Publishers cannot let their advertisers (or online portals, platforms, and ad networks) tell them what they can sell.
Own the Platform. The biggest challenge facing today’s magazine and newspaper publishers is getting back control over the interactive delivery platform itself. Look how the music industry lost control of their delivery system and the billions of dollars in lost revenue that engendered.
Once technology made it possible to remove a song from a CD and share it with hundreds of people for free, the music industry was sunk. Like publishers today, they found themselves looking to Apple to build a modern platform that would once again value their content. They are finding a rough peace with the $0.99 a song deal they got from Steve Jobs.
If the iPads, Kindles, and Sony Readers of the world end up creating the standard for published content, the content owners will have once again been commoditized by technology players and lack control of their own destiny. Publishers need to think about designing the next printing press, rather than have Apple do it for them.
All of this hyperbole aside, I don’t think magazine publishers will ever go away. Over the years, printed magazines, newspapers, and books will be a great luxury. People who would rather read a solid copy of Moby Dick, or fold The Wall Street Journal on the train, or flip through Architectural Digest will be afforded the opportunity to do so — at a premium price.
The future for these content manufacturers, however, will be around taking back ownership of the delivery mechanism and setting the standards of tomorrow when it comes to content creation, distribution, measurement and (most important) ad formatting and delivery.
That’s a panel discussion I believe would be worth listing to.