Posts Tagged ‘advertising’

Big Change For a Big Media Change Agent and a Big Publisher

19 Dec
2011

by Ben Elowitz

Laura Lang has a proven and powerful track record as a media change agent.

As CEO of Digitas, she helped uber-marketers like Procter & Gamble and American Express move smartly into digital advertising. And she is conversant and fluid with new publishing platforms – and knows how to make them profitable.

Now, she’s been asked to lead Time Inc., and its 21 venerable titles, which include Time, People and Sports Illustrated.

Time Inc. has absolutely amazing brands with outstanding reputation, heritage, editorial staff, and customer bases; but, at the same time, the business model of magazines is structurally breaking.

What an interesting – and tantalizing – choice.

And you can’t be a media leader today, unless you’re willing to innovate on the business model itself.

Which is why Laura seems so promising.

I love the idea that at Time Inc. she’ll be able to innovate in core product, just like she did at Digitas. I also love the notion that she’ll aggressively develop new products for advertisers.

What will be new to her is the actual business of publishing – a business where Time Inc. stands stronger than almost any other player.

The central question for me is whether Time Inc. is ready for the change that a leader like Laura will want to (and need to) bring.

Indeed, Time Inc. has fundamental open questions to address when it comes to its own relevance in the digital world.

While the powerful brand of Time magazine has set the American agenda for decades, Time.com has wandered.  In the past, Fortune magazine always spoke to the most important business issues and people; but today, its online brand is less clear, with basic confusion even in its home-page address (http://money.cnn.com/magazines/fortune/). This simply muddles Fortune, Money, and CNN.

To be as successful in the next century as it’s been in the past, Time Inc. will have to adapt more fully to the digital world. That means developing new business models, as well as new attitudes toward consumers, advertisers, and the product itself. It will also require a healthy reinvigoration of key brands, an area where I think Laura may especially shine.

All of this will take nuance, to bend things without breaking them.

I’ll end the year on an optimistic note, and say that I hope Laura can finesse major innovation for this major publisher. If she can, watch out world – because very interesting and far-reaching things will happen.

Why Rupert Murdoch Is Right About The Daily

2 Dec
2010

by Ben Elowitz

This article was published as a guest post on paidContent.org

There are plenty of naysayers who point out that Rupert Murdoch’s new initiative The Daily — the first major-media publication created expressly for tablet computers like the iPad — is an expensive and risky bet.

But here are four reasons why Rupert is right:

1) Rupert knows the ad model of publishing is doomed. Print and broadcast command the heftiest premiums, and both are at risk of price and volume erosion as consumers cut their ties to offline media. In the digital environment, online advertising is highly commoditized: the explosion of content publishers is outpacing the shift in demand, while technologies target audience ever more efficiently. Advertisers have plentiful ways to reach a consumer.

For his part, Rupert knows that his offline publications are at risk from decreasing ad revenues, and web-advertising models are hardly an adequate solution. Whether it’s out of desperation or vision, Rupert is willing to break through — and lose money in the short term — in pursuit of a better model.

2) Rupert can afford a long-shot bet — and can’t afford not to make one. He’s leveraging his considerable influence by putting something out there that can be truly cutting-edge. A $30 million investment may seem ridiculous for a new publication — and it is. But even with that hefty price tag, this is an insignificant bet relative to the industry and consumer behavior Rupert is trying to move. Throwing money at this is OK, because the possibilities are so great; if The Daily succeeds — or even provides the key insights so his next venture can succeed — it will be worth billions.

3) Rupert has influence to change consumer and industry behavior. He beat his drum loudly last year to get paywalls on the agendas of other publishers’ boardrooms. And it’s worked; just look at The New York Times’ pending move to a metered system. This is what I love about Rupert: Unlike other leaders in publishing, he uses his voice — and his treasury — to influence the industry and consumer behavior. He’s all about trying to get to a more successful model.

4) Rupert has a friend in Steve. Steve Jobs has a lot riding on this, too. Is Apple (NSDQ: AAPL) in the device business or the media business? To date, the lion’s share of its revenue and growth has come from the sales of ever-more-advanced devices. But as device categories mature, Jobs knows growth will get harder to come by: iPod sales grew at just 2% for Apple in 2010, as the venerable device line nears saturation.

In a world where mobile devices are ubiquitous and fiercely competitive, the fat margins of media revenue-share arrangements can powerfully fuel profits. But even more attractive is the tremendous expanse of the pool:  Apple’s media revenues are currently around $5 billion — a paltry sum compared to the global media and entertainment market that PricewaterhouseCoopers pegs at $1.3 trillion.

Apple has already proven that in its remarkably successful closed media ecosystem, the company’s store can earn an estimated 30% of the top-line for media sales — without having to produce any media. This happens when Apple creates compelling devices, exciting user-experience platforms, and fresh marketplaces. For Steve, the upside here is huge. And so he should be happy to tie that upside with anyone who is as crazy-aggressive as he is about getting legions of consumers in the habit of paying for media. And that list has just one name on it: Rupert Murdoch.

A fresh start and a new division — with a new concept and a new design for a new platform — is the only way someone like Rupert can have the freedom he needs to reinvent media for a new age. And only Rupert can do this — without falling into the ruts of compatibility with existing businesses or holdover assumptions from old models.

Kudos to Mr. Murdoch for summoning up the courage, and putting up the money.

Online Experience for Publishers: Innovate or Die

12 May
2010

by Ben Elowitz

We need an experience revolution.Revolution Fist

Each week, we hear of major publications and traditional broadcasters who are struggling to stay afloat in a digital age with new economics and new expectations.  Despite the promise of interactivity made with the internet revolution over the last 15 years, most publishers have done little more than replicate dead trees online, with zero innovation beyond the hyperlink, the slideshow, and an embedded video now and then.

And yet we can see from the rising successes of the last decade like Facebook, Google, Zynga, YouTube, and others that what catches audience attention is interactivity.

To earn loyal audiences today, publishers need to go beyond content creation:  they need to produce compelling experiences that distinguish them and get the consumer coming back for more.  The Pew Internet & American Life Project concluded that “when asked whether they have a favorite online news source, the majority of online news users (65%) say they do not.”  In an era where the consumer’s cost to switch is the flick of a click, publishers must offer compelling, differentiated experiences to earn loyalty.  Choices abound consumers:  there are scads of publishers online in every category; content suggestions offered constantly via social networks; and blue links proffered by search engines dozens of times per day per reader.  In an environment of choice, as brand experts have known for years, nothing builds loyalty like a great experience.

And now is the perfect time to create those breakthrough experiences.  The enabling technologies for the digital customer experience have improved considerably in recent years: we now have ubiquitous broadband, flash and other streaming video, plus HTML5 and maturing mobile application platforms.   Add to that personalization, targeting and social graph access, and there are some amazing opportunities to innovate.

It’s not just consumers that are thirsty for upgraded experiences.  Advertisers are showing that they will pay more for immersive interaction over basic display ads next to text.   Video ads during full TV episodes on ABC.com, Hulu, and others, or mid-day live sporting broadcasts command many times the CPM of typical display ads. Indeed, according to Michael Learmonth at AdAge, The Wall Street Journal’s online video content is bringing in envy-inspiring CPMs at $75 – $100.

But video is not the only way to create an immersive customer experience online.  Online sites of traditional publishers like Better Homes and Gardens are experience train wrecks (to be fair, they’re not alone in that regard).   Contrast that with the much more successful (certainly from an ad rate perspective) MarthaStewart.com which has many of the same elements – a top stories slideshow, cross-promotions for the print magazine, etc., and it’s a substantially better experience due to the focus on design and usability that is expected of the Martha Stewart Omnimedia (MSO) brand.

Even still, much more can be done with today’s technology to put the consumer’s needs and interests first.  The latest example I’ve seen of true creativity in user experience design is Microsoft’s (MSFT) Glo.    There are additional signs of greatness in the tablet demo that Time Warner (TWX) built for its Sports Illustrated brand.   And The New York Times (NYT) continues to excel in their applications and interactive graphics which enjoy significant pass around (bit.ly shows over 5,000 social media clicks to a recent budget infographic and today’s “A Moment in Time” project has already generated over 100 tweets in the first 15 hours).  But too few companies are making similar efforts to distinguish themselves.  The opportunities are there, and we need to step up.

Consumers will decide which brands deserve their loyalty and content alone won’t cut it.  We are on the brink of a total revolution of experience.  For publishers, it’s reinvent or fail.

Do you know additional examples of publishers innovating?

People StyleWatch: Print Magazine Learns Five Lessons From Digital Media

30 Apr
2010

by Ben Elowitz

People StyleWatchDespite the significant economic pressure they are under, it’s all too rare to see a print magazine let go of tradition and embrace a new model.  So I was delighted to find that at least one Time Inc. magazine is doing just that.

Stephanie Clifford’s article about People StyleWatch in the New York Times last week shows what happens when offline executives adopt a digital mindset.  Clifford points to a number of things that Susan Kaufman, People StyleWatch’s editor, is doing well, and notes the results:  8.6% circulation growth in the second half of 2009 and 130% growth in ad pages in the first quarter, easily besting a shrinking industry.

Although I wouldn’t call it top-tier journalism (does “Find Your Perfect T-Shirt Bra!” really merit an exclamation point?), People StyleWatch replaces an elitist, artistic view of its subject with a pragmatic appreciation of what their audience likes.  It’s a habit learned online and applied offline.

Here are five lessons from online media that the publication is successfully bringing to print:

  1. The text is brief.  Photo-heavy pages with short captions work.  They make for easy scanning, moreover it’s a fashion shopping magazine; ultimately readers care more about the products than a writer’s description of them.  Ironically, although the content is brief, it is resulting in 93 minutes average engagement, with each easily consumable section leading to the next.
  2. The content is advertiser-friendly.  Any web site that is ad-sponsored knows how important it is to create “context” and targeting for advertisers in order to add value and charge higher rates.   Shopping is one of those brilliant subject choices where advertising is content and vice-versa.  It is analogous to paid search online: because searchers are often looking for businesses, their click throughs and effective CPMs are far above internet average.  Moreover, People StyleWatch is open to creating pseudo-editorial sections with featured retailers (such as the recently announced JCPenney partnership).
  3. They offer exclusive discounts. Consumers love to get a deal, and coupon / discount web services (including the recently hyped group-coupon genre) are very popular with women online.   People StyleWatch goes beyond the celebrity watching and fashion trends to become part of their readers’ lives, changing the value proposition from just entertainment to a great way to get more for less.  In so doing, they are enhancing the reader’s experience.
  4. There is a clear call to action.  Most of the products include not only pricing information, but web sites, 800 numbers, and in some cases, text messaging options for buying information.   This is beneficial for both readers and advertisers.
  5. Content costs are low. Some of the most successful online properties such as Facebook, YouTube, and Yelp rely primarily on user-generated content.  Successful online publications like The Huffington Post regularly feature guest bloggers.    Traditional high-cost content is increasingly difficult to support profitably with advertising given the fragmentation of media consumption in recent years.  People StyleWatch features lower cost content, with research consisting of quick calls to publicists or product marketers, and images from paparazzi or retailers rather than expensive celebrity photo shoots.

This is more than just flexing editorial styles to meet the expectations of web-addicted younger readers.   The magazine is embracing a new business model with lower costs and more attractive content for advertisers that allows it to grow in an otherwise contracting space.  They are hitting on one of the key success factors for Publishing 2.0, namely an adaptive business model.  Time Inc. CEO Ann Moore, who has led the People brand for more than a decade in various roles, no doubt is taking notice.

Regardless of your personal opinions of the content, the results – in both readership and profitability – are hard to dispute.


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