Blog
 

What I heard @NY City AdTech

Summary

I had the pleasure of visiting NY City to attend the November Ad Tech show at the Javits Center to observe a mix of Client Side and Supplier side businesses as well as presentations for what is new with techology as it related to the advertising industry. I focused my energies around what the key publishers were doing, particularly the magazines with cross channel content publishing and the emerging iPad strategy that they all seem to have bought into

Around the traps, here is what I heard or observed through personal meetings or listening in on discussions with executives from Conde Nast, Hearst Magazines, Bonnier, Reuters, CNBC and others.

Taking a bite (away) from Apple

I like how the major media players were talking openly about how to circumvent Apple and iTunes in regards to the sales of their iPad apps. One strategy employed by News Corp’s Wall Street Journal is to put a free trial app on iTunes, but drive users to the media company’s own site to buy a subscription.

Consider the financial impact of this assuming media companies must pay iTunes a 30% commission on all paid apps sold through its store. This blog post in June showed Conde Nast Magazine’s Wired Magazine sold 79,000 iPad edition copies. At the current price of $3.99 per issue, this is the difference between earning $315,000 vs. $220,647. As sales volumes increase over time, this financial impact is significant on the bottom line.

Devices – it’s not just about iPads

Devices emerging outside of the iPad include Android OS based tablets, Nook, Kindle Reader, HP tablets, Sony eReaders. Sizes will range from 9” iPads to formats of 7” diagonal screens and below. As you can see, media companies are going to be very very busy creating a presence everywhere their customers are.

iPad Market Research and Competitive Intelligence

I met a company that is producing proprietary panel-based research on iPad apps that reviews the quality and engagement of the apps where you can compare competitors against each other. This is an excellent resource for your internal teams or agencies to get ideas and insights for making more engaging applications. Contact me on mycmo.com.au if you would like to know more. This resource is already available in the USA and I am working with this provider to deliver the same information in the Australian market.

Commercial Returns and iPad (Cost vs. Revenue)

The hype is as big as ever on iPad but I heard some interesting sentiments form a Sales Director of a major syndicated online new outlet. The cost of producing the iPad application in addition to premium applications for advertising within the iPad edition is proving a challenge

“It’s like the wild wild west out there. Lots of experimentation going on still, but we are struggling to get advertisers to put down the big spend when our audiences aren’t large enough yet. With smaller audiences, we have to spend more building apps to create a premium experience to justify the higher spend, but the cost of doing so is outstripping our profits.”

Lauren Zalaznick, President of NBC Universal Women and Lifestyle Entertainment Network, echoed the sentiments of Sony’s ???.

CNBC operates at a scale that other outlets cannot, but this is the industry making a statement that business cases be damned, the industry has to come up with a way to make this work, there is no real choice.

OPERATIONS/COST

My trip to NY City has convinced me that it is too late to try and hold off progress and deny new business models where technology is equally if not more important than editorial. Now, the real worry is not acceptance of new media by old. Instead, media corporations have been brought kicking and screaming into the new world where the bigger worry is how to sustain the costs and complexity of nurturing and developing this model to accomodate an unrelenting set of consumption choices for consumers.

Having been in the publishing business for the last seven years has me accutely aware of the begrudging acceptance of new media and techology by traditional print media. Though the iPad is defintely gaining interest and acceptance from tradional media, having to manage the development of numerous brands of tablets, mobile devices and channels is about to take the new media transition to a degree of operational cost and difficulty that is unprecedented

On the cost portion of this business problem, I have identified at least one good iPad publishing solution that has been tested providing a cost effective platform for delivering engaging apps. I sat in on an intra office demo with time and budget strapped editors raving about it. Contact me through the MyCMO contact form if you would like to know more.

For publishers not across what their brethren on Madison Avenue are doing, the clear message is “Wherever your customer is – you have to be”. This explains why iPad is only a piece of the overall puzzle that includes not only what I mention above with devices, but also a bevy of social media channels including Facebook, Twitter and many many corporate social networking sites and communities being created by the publishers themselves.

Big media outlets like CNBC talk about the major investments they have made to go across channels. This does not make sense

PREMIUM/AD REVENUE

On the revenue portion of the business problem, agencies need to work with publisher platforms to deliver truly creative, inventive and engaging ‘APPS within APPS’ to give mags or papers that experience that cannot be had in print. Contact me at mycmo.com.au if interested as I have at least one contact capable of delivering this.

Other bibs and bobs

Pay for content argument – Key New York City advertising executives seem more credible on the paid content punch line than Rupert Murdoch. ‘Apps issues should be paid just as the magazines print versions’ is their motto. When I see the investment businesses like Hearst Magazines have made to deliver engagement and availability across devices, the user is getting something online they cannot get on the magazine that holds a tangible benefit.

“Our user based research showed that people do not value a replica of the magazine on the iPad…instead the successful approach is to replicate the experience of being in the mag, but enhance the experience so that it looks like it was made for the iPad with Tapping, Swiping and native iPad features integrated into the experience” Quote from an Editorial Director of a high profile Magazine group in New York

Content – quote from John Loughlin, Executive VP, GM, Hearst Magazines “Premium Content has a life beyond any single platform”

One executive’s strategy for magazine content:

  • No Silos
  • Don’t separate magazines from their apps
  • One or single integrated teams

Leave a Reply