Measuring Digital Engagement

Mediaweek has a report on a lively panel discussion of digital magazine auditing at yesterday’s PPA annual conference:

…during the ‘Magic Numbers’ panel session, Tye (James Tye, CEO of Dennis) called for industry measured data to be produced faster rather than waiting on the “perfect”, multi-platform measuring solution for brands.

Tye said that despite the iPad “being around for a year now”, Dennis has not been able to tell its commercial partners officially how many readers download its magazine iPad editions, such as Mac User.

“My worry is we have a system built on the past five decades, we need to build it faster and more reactive to what the customer want,” he said.

“The iPad has been around for a year now, yet only now can we start to think about including it in our future auditing certificates”, he continued. “As an industry I think we’ve got to learn to move quicker than that.” MediaWeek ‘PPA 2011: ABC under fire for ‘five decades old auditing system’

Rupert Turnball, publisher of Conde Nast’s Wired, also had some highly pertinent questions for the magazine audit organizations: “we are interested in measuring engagement and influence and the ability to amplify messages, and that’s not measured at the moment.” That is certainly something that advertisers and big brands are deeply interested in when it comes to digital media. The problem that the magazine industry faces is that there are plenty of solutions, and an increasingly perplexing range of digital advertising metrics (Google Analytics, Adobe Omniture, Hitwise, Flurry etc), but none of them are specific to the magazine industry. Since none of the digital advertising platforms (Google, Yahoo/Microsoft, Apple, Facebook …. etc) are specific to the magazine industry, none of the digital audit tools that are evolving will be specific to the magazine industry. Perhaps the most useful role that the magazine-specific audit bureaux could now play is to recognise that there is no longer a sensible role for narrowly magazine-based audit functions.

Digital advertising is multiplatform and multipolar and so it follows that the audit role has to integrate with the best tools across the web and mobile marketplace. Digital magazines have extraordinarily rich potential for advertisers, and influencers, but the challenge is to find a way of demonstrating and leveraging this without resorting to the simplifications of the one page audit certificate.

Magazine Publishers and Horse Dentistry

It seems that every other day brings a new bout of moaning about the limitations of the Apple iPad system as a digital magazine platform.

But are these complaints justified, or is it really an indication that magazine publishers are both missing the bus and looking a gift horse in the mouth? The latest piece of mis-guided bleating comes in an otherwise sensible article from Damon Kiesow in Poynter Online. He says:

What publishers and consumers need from Apple is a real digital newsstand, which would allow:

  1. One-stop shopping for multiple publications
  2. The ability to buy a single issue or subscribe
  3. Capability to connect print and tablet subscriptions, including any package discounts
  4. A central location to access purchased or downloaded publications
  5. Sales via iTunes or a publisher’s own circulation system, with royalties adjusted appropriately

Damon Kiesow 3 strategies emerge for charging for iPad publications

These sound like reasonable requirements. But the plain fact is that iTunes and the app store pretty much does all that right now. Let us take them one at a time: (1) iTunes is a one stop shop for lots of publications, it is hardly Apple’s fault if plenty of magazines have not ventured in there yet. Even so, the iTunes news stand is better stocked with newspapers and magazines than any other digital news stand. And getting stronger. (2) (the ability to buy single issues or subscriptions) as Kiesow acknowledges earlier in the article Apple through the iTunes app store allows publishers to sell single issues or subscriptions (at Exact Editions we enable publishers to sell 30 day subscriptions to their magazines which is not the same as selling single issues; but there are plenty of publishers and platforms selling single issues through iTunes) (3) (connecting print subscribers to apps) but as Kiesow recognises there is no obstacle to a magazine publisher connecting its existing paid subscribers for free to the app which is being sold by Apple in iTunes (he cites the experience of People magazine, but at Exact Editions we are encouraging all magazine publishers to do this: connect your existing subscribers for free through the branded app which you are offering in iTunes. This is completely within the letter and spirit of Apple’s rules and guidance). (4) is completely baffling, because iTunes so obviously just is that; iTunes is a central location for e-commerce, for storing magazine issues and for providing users with access to archives. How would or could an Apple kiosk do that better? (5) (a system for ‘sharing royalties’) is already in place and Apple has the rather marvellous adjustment that a publisher can choose how to play the game, the publisher can either sell via iTunes in which case he will find that Apple have taken a 30% commission from the sale, or he can choose to give the magazine away, or indeed provide free access to subscribers from whom the publisher has charged an annual or monthly subscription (outside the Apple system). Not only can publishers connect customers who they have acquired via the iTunes system to their existing deals and print-based offers and incentives, but they can do that without paying Apple a cent for the business which is happening outside iTunes. Apple is being a lot more ‘open’ about this than will be some of the competing digital news-stands that are coming along.

All this should be known to the complainers in the magazine industry and I think that the real source of the griping, grumbling and equine mouth inspections is elsewhere. Perhaps these are the real problems:

  1. iTunes is not a complete digital back-end system for magazines. Publishers are used to having a specialist distribution house handle all complications to do with physical distribution and maybe they are hoping that Apple would be able to do this in the digital sphere and look after the magazine publishers special interests in the way that fulfillment houses have done. Once this is formally stated the idea is ludicrous, but some magazine experts talk as though its Apple’s job to deliver, in full working order, the digital back-end of their industry. This is perhaps the burden of Kiesow’s request that the putative Apple kiosk should ‘connect’ the print and tablet subscription (‘including any packet discounts’ — I like that requirement: consider the extreme complications that could arise from blending infinite varieties of print/digital discount packages the magazine publishers will dream up; that modest requirement will keep Apple’s engineers busy for years). But Apple is not in the magazine or newspaper business and it is not their job to build a system which solves the transitional dislocations of those industries.
  2. iTunes does not have an exclusive magazines-only zone. Like the iBooks store. This is true, but it may be a good thing for the magazine industry that Apple does not have a required format and delivery solution for magazines. The jury is still out on the iBooks solution, and perhaps Apple is being very wise in waiting to see how digital magazine delivery evolves. Why should they plump for a possibly half-baked digital standard when we still don’t know what the right digital format for magazines is? Certainly Apple has not solved all the problems of digital magazine production, the result is that there is a rather interesting ferment of development and innovation. If Apple had developed a pre-packaged solution (cf Amazon and their so far half-hearted and not very good magazine delivery) we would not be witnessing these exciting experiments within iTunes.
  3. Apple is not being friendly enough to the existing magazine business. There have been a chorus of complaints about Apple not providing sufficient information on app usage to developers, or to magazine publishers who produce apps. The magazine industry is used to having its own tame auditing service (ABC and BPA being two of the biggest industry consortia providing such information), specifically geared to the magazine industry and its advertising customers. Apple has shown no signs of opening up its books to ABC or the BPA and is frankly unlikely to do so. Why should Apple be unmovable in this respect? Primarily because the business of auditing advertisements has moved on, and there is now no conceivable rationale for having an advertising metric which is exclusively tailored to the magazine industry. Google, Apple, Microsoft and Facebook etc will be the advertising networks that count in the future and they will all be trans-media (web, TV, film, digital publishing, social networking all in a big mix). Since 2005, the boom in digital advertising has shown that measurement and auditing is so closely tied to implementation and operations that it is naive to seek to recreate a magazine-specific analysis or distribution solution. Digital magazines will need advertising but they will need to work with digital solutions and digital metrics which are not narrowly specific to one industry or one media type. It certainly is not in Apple’s game-plan or in their interest to gerrymander a magazine specific solution for reporting and measuring usage on magazine apps.
  4. It is hard to sell magazine subscriptions through iTunes. Kiesow correctly points out that Apple enables publishers to sell subscriptions, and there has never been a problem about doing this (we have been doing so at Exact Editions since the iPad launched). In contrast to Android, Apple in iOS 4 and iTunes actually has a rather effective way of providing in-app purchases of subscriptions. The problem for the magazine industry is rather different: iTunes customers are hugely biased towards buying stuff that is at the low end of the iTunes price matrix. It is very hard to sell annual subscriptions to magazines through iTunes at the prices that magazine publishers would like to charge (and perhaps need to charge). This is a real problem but it really is not Apple’s fault, and they can hardly blamed for this supposed shortcoming. iTunes works very well for low-priced transactions. But it is hard to see annual magazine subscriptions through iTunes flowing off the digital shelves at prices of £20/$30 and upwards. So it will be interesting to see how Newsweek fares with its experiment of selling 6 months subscriptions through iTunes at $14.99. iTunes apps are pretty ‘frictionless’ when priced at $0.99 or $1.99. But it is much harder to sell subscriptions at $9.99 or $19.99. Perhaps Newsweek will start a trend, or maybe magazine publishers should stick with the scheme of using iTunes for customer acquisition and then upselling them to an annual subscription purchased via a credit card direct from the publisher (where consumers are happier to spend $9.99 or $29.99, for a publication they really value).

The conclusion that one should draw from all these niggling gripes about Apple is this: publishers do not realise how lucky they are, magazine gurus should stop complaining and use the Apple service for the tasks it performs so well, and get on and sell or freely provide (in the case of existing subscribers) access to the magazines that they can now deliver digitally or in print. When you think about it, it clearly would not be a good idea for the magazine industry if Apple did provide a complete and end-to-end solution for digital magazine distribution. Magazine publishers need Android, and Windows 7 and pure web distribution to preserve their independence and choice. They need alternative channels for magazine distribution not just an iTunes route to market. Magazines, not Apple need to control and manage their own digital distribution, and if Apple were suddenly to produce a comprehensive digital magazine service, this would be dangerously sedative if it stopped innovative publishers from looking to alternative digital distribution routes and technologies.

New Models for Digital Advertising

In the last couple of weeks we have seen two new models for digital advertising proposed. First Steve Jobs announced iAds as part of the introduction for iPhone O/S 4.0. Second, Twitter announced their new concept of Promoted Tweets which have begun to be rolled out from major brands such as Starbucks, Red Bull and Virgin America. The Apple ads will be ‘rich media’ ads, using HTML5 (of course not Flash) but they will not be web-based, they will be app-based, and their announcement keyed in with the development that will allow apps to be nested within each other in the O/S 4.0. They also look as though they may be require quite complex and high-end design and animation skills. In his presentation Steve Jobs estimates that Apple could be generating 1 Billion iAd slots per day in six months time. That is a big opportunity.

What interests me about these new proposals for streams of digital advertising is that they promise to be quite distinct and different models for digital advertising. Sure they will be competing with Google in the advertising space but they will be competing by offering a completely different form of digital advertising. They are quintessentially forms of advertising which piggy-back on the environment of their hosts: Apple and Twitter. Apple have proposed an app-based form of advertising, and perhaps to no one’s surprise Twitter have proposed a form of Tweet-based advertising. Whereas Google of course has its strongest suite in search-based advertising. Apple and Twitter are both, in their different ways, targeting the type of brand-based advertising which is where Google is least effective and dominant. They are targeting the big-budget, high impact advertising which has been the strong point of magazine and TV advertising for decades. Use of the Twitter and Apple eco-systems may be helpful to digital magazine publishers in the medium term. All publishers and advertisers will hope for more competition for Google in the distribution of digital ad-spending, but the print and TV publishers are losing control. There will be significant cuts for Apple and Twitter.

Notice also, that the Apple system is significantly less web-based than we have come to expect. The ads that are delivered are not web pages. Although the ads are built with HTML5 (big chuckle from the audience when Steve Jobs said that, sensing another jab at Flash) the advertisements are entirely based on inApp deployment. They are seen on the iPhone, the iPad etc within applications. Not on web pages. It would be no big deal to deliver these HTML5 also on the open web, but Apple have not yet said whether they will do that (nor have Apple said whether or not they will deliver iBooks on open web pages. My guess is that they will not). Apple is clearly building an Apple-only, Apple-closed system for advertising (see Frédéric Filoux and Peter Kafka). There is no point in blaming Apple for this closed approach. Google also is pretty closed when it comes to the workings of its advertising system. But the choice of ‘digital advertising’ as the topic headline for this blog is deliberate. Digital advertising systems are increasingly using the web and open web standards only to the extent that it really helps the technology platform to gain acceptance. We will see more proprietary advertising systems developed in the years to come (watch out for Facebook).

Could the same thing happen to books, magazines and newspapers that is now happening to advertising? Could we be moving towards a world in which there are multiple versions of mostly incompatible digital books, targeted or delivered at different types of digital distribution: ebooks for Kindle, Nook, Kobo and Sony, appbooks for Apple, slightly different Flash appbooks for Android, Google Books for Google Editions, Hulu-magazines for digital TV, Nintendo books and comics for game consols? Or will publishers, authors and readers be looking for a distribution model in which the same book, magazines and newspapers can be offered through all these platforms? Fragmentation and differentiation look to be the stronger tendency at the moment, but a move towards interoperability would be good. That should come if delivery via the web remains at the core of the service provided.

Magazine Publishers are Getting Organized (Desperate)

This last week two separate (?) ventures were announced to help solve the problems of the magazine industry. First, a still nameless new company to build a kind of Hulu for magazines, the company is being ‘organized’ by Jeff Squires, a Time Inc, veteran and apparently has backing from Time, NewsCorp, Conde Nast, Meredith and maybe Hearst. The flurry of objectives and business models whirling around this venture are summarized by PaidContent.

This venture is about dual revenue streams and selling content from the start—add the sale of content from the magazines or newspapers their corresponding sites and content created for digital editions to ad revenue and expanding options for advertising. Executives from most, if not all, of these publishers at various times have stressed the need for agnostic solutions that can be used across devices, platforms. Given the fragmentation in the device market, the dominance by walled-garden players like Amazon and the split we’re heading toward in gray-scale and color e-readers, anything less and I’d suggest stopping this before any more money goes in. (Staci Kramer in Paid Content).

The second proposition designed to save the magazine industry is Skiff, a new venture which Hearst have been brewing for a couple of years. They have a nice diagram summarizing its business model and projected revenue streams:

These projects are gaining a hearing in the industry, because they appear to solve the problems of the industry at one bound. They have a deep appeal because they appear to offer a digital future in which the magazine industry continues to be supported by a rich advertising stream, whilst also capturing an audience to digital subscriptions. In effect this dream appeals to the ancien regime because “Everything changes and nothing changes.” Plus ça change, plus c’est la même chose.

The Skiff project is almost impossibly ambitious in simultaneously ‘ingesting, optimizing, delivering and rendering a wide array of content’ to Dedicated Readers, smartphones, tablets and PCs. This is a tall order.

One wishes that they had picked a somewhat less comprehensive target to begin with. How about: designing a platform whereby digital editions can be supplied at very low cost to all existing print subscribers? An industry wide initiative to do this, would do much to encourage a culture of digital magazine reading and digital subscriptions. But one fears that in trying to solve all the problems of the magazine industry (and the fall in advertising budgets is the most painful of these problems, and the one which the magazine industry is least able to tackle on its own), there is every chance that the enterprise will fail.

And the real problem with that, is that too many people in the magazine industry will think that the efforts of these ‘Big Boys’ (and they dont come bigger than Time, Hearst and Conde Nast) will save the industry. The truth is that these big ‘experiments’ are not going to provide a solution, that is much more likely to come from rapid innovation and experiment at the grass roots. Let a thousand flowers bloom! That way there is a better chance that solutions will be found. I have a nasty feeling that with these big propositions on the drawing board, (subject to many months of prototyping and focus-group reactions) Time Inc, Conde Nast and Hearst are going to be even slower to innovate through the publishing activity of the magazines themselves: their publishers, editors and their existing readers have to be in the picture and enjoying the digital proposition if it is to have any chance of success. Conde Nast’s recent effort to launch an iPhone App for GQ is a much more promising approach, in that way they can get feedback and a chance to offer a second iteration of the iPhone App proposition within a month or two. Have the Skiff investors taken on board how quickly the App market will be evolving whilst they spend many months, testing, manufacturing and launching their new proprietary eReader?

The Congleton Chronicle

Yesterday The Congleton Chronicle became the first local newspaper in the Exact Editions store. An annual subscription to the digital edition of this weekly paper is available for £25. There is a free trial issue available here.

The almost immediate launch of the newspaper in the Exact Editions platform was also a record. The publisher/owner of the Chronicle decided to do his digital edition yesterday and uploaded the necessary issues forthwith, discussed the deal, decided the price and the schedule, signed the contract (put it in the post — we trust him), liaised with our team, who promptly processed the files at our end: by 4.00pm everything was shipshape. Files databased, blurb drafted and logo in situ. The net result was that the ‘paper’ was up and in the store less than 6 hours after the decision to proceed had been taken. One wishes that some of the big publishers we talk to could move at similar speed. They need to get moving.

The digital edition gives the Congleton Chronicle a number of things that much larger publications also need:

  • A digital edition which can be bought by any loyal subscriber. So no need to put a paywall around the web site, which will continue to carry fast moving stories. But there is a lot that is not freely available from the web site; if you want the full monty, then the Congleton loyalist will buy a digital sub
  • The digital edition is good for Congleton loyalists because it reaches them on the very morning that the paper is first published in Cheshire. And the statistics from the Chronicle’s web site tells us that there are plenty of curious visitors in far off places who can now subscribe instantly without fuss, and with no more bother than a PayPal transaction.
  • The readers also have the benefit of all the advertisements that appear in the paper. The ads are there in full glory. With clickable telephone numbers, url’s and email addresses. There are hundreds of such navigable and actionable links in each issue of the Chronicle. The ads in a local paper are among the most useful resources of the paper for readers. So leaving them out is a non-sense (the Exact Editions content management solution transforms local numbers into the international format, so the American reader with Skype or mobile phone, can call the estate agent with a click from the page).
  • The additional interactivity in the paper, in particular in the ads, is also excellent news for the advertisers. The ads will get additional and direct response from readers who click on links. The publisher will have the statistics to prove it.
  • The digital edition is completely accessible on the iPhone and from other mobile phones with standard, fully capable web browsers. There is no need for the Chronicle to invest in the considerable expense and overhead of producing and maintaining an alternative ‘mobile’ version of their content platform. All of the newspaper content is accessible week, by week from the digital edition, which can be easily read on iPhones and other mobile devices.
  • The Exact Editions platform also takes care of the support, distribution and e-commerce aspects of the digital edition and this is a proven and reliable system. So it really is possible for a publisher to be up and running with a digital solution a few days after the decision is taken (allow 5 working days, because the Chronicle may be exceptionally nimble).

The Congleton Chronicle’s publisher also figured out a way in which he could recoup the really modest costs of this service from the get-go. Smart move.