From AdAge: Full story here

Magazines and Newspapers Need to Build Better Apps

Viewpoint: Significant Glitches Trouble Too Many Publishers' Apps

Though it is still early in the migration process, Apple's iPad and other tablets appear to be a very good thing for the publishing industry, allowing publishers to monetize their content while avoiding the printing and distribution costs associated with traditional print vehicles. And they've proved to be very good for consumers, offering improved convenience and portability, not to mention the ability to read in the dark.

But there is a large problem that threatens to limit publishers' opportunity. Of the 5,000 magazine and newspaper iPad apps we've evaluated for McPheters & Co.'s iMonitor service since April 2010, far too many simply do not work well.

In the summer of 2010, about 45% of the apps we evaluated revealed significant malfunctions. That proportion is falling, but not quickly enough: Our analysis shows that about a third of all apps we have evaluated still have at least one serious shortcoming.

The biggest issue revolves around authenticating print subscribers. Authentication errors, in which the app fails to recognize existing subscribers, are reported for almost half of the publications that offer digital versions free to print subscribers.

But there are a host of other issues. Pages, video and audio can fail to load. Links may be broken. Audio sometimes won't turn off, leaving users the choice of closing the app or continuing to listen against their will. Spontaneous crashes are common. Downloads continue to be a problem with many apps, particularly when consumers want to download issues over a 3G network or without high-speed connections.

According to Mike Haney, chief product officer for Mag+, the responsibility for malfunctions can reside with the publisher, the development platform, or even the device if memory is constrained by too many apps running simultaneously. In the case of authentication issues, publishers' subscription fulfillment houses can also be to blame.

For the first time, Google has announced the commission it takes when paying publishers who run their ads and it is a lot higher than had been estimated - in some cases up to 49%. To put this in perspective, Mediabids is the only company running a pay-for-response program in print of any size and the commissions we take are, in most cases 10%, or less.

From MediaBuyerPlanner.com - full story here

Google Reveals Revenue Split with AdSense Publishers

Google has announced the revenue split it gives to AdSense publishers for its two main AdSense products, AdSense for content and AdSense for search. Until now, the small publishers who use Google’s self-serve AdSense products had no idea how Google was sharing the revenue pie.

AdSense for content publishers, who make up the vast majority of Google’s AdSense publishers, earn a 68% revenue share worldwide, Google says, clarifying: “This means we pay 68% of the revenue that we collect from advertisers for AdSense content for content ads that appear on your sites.”

The portion Google keeps represents the company’s continued investment in AdSense, including the development of new technologies, products and features. It also reflects the costs Google incurs. Since launching AdSense for content in 2003, this revenue share has never changed.

AdSense for search partners receive a 51% revenue share, worldwide, for the search ads that appear through their implementations. As with AdSense for content, the proportion of revenue that Google keeps reflects its costs, “including the significant expense, research and development involved in building and enhancing our core search and AdWords technologies.” The AdSense for search revenue share has remained the same since 2005, when Google increased it.

Search Engine Land points out that the split disclosed is for self-serve AdSense publishers rather than big publishers who work directly with Google. Those ad deals would have different splits, depending on the publisher, Google says. Bigger publishers are rumored to get bigger shares.

Google said it will not share the revenue split for publishers who use AdSense for mobile apps, feeds or games, because the company is still learning about how much it costs the company to deliver those types of ads. Google says it may divulge those splits at a later date.

This speech was given by Jedd Gould, of Mediabids, to the Suburban Newspaper Association and Southern Newspaper Publishers Association's Strategic Revenue Summit yesterday.

Advertiser's Expectations Have Changed, So Should You

10 years ago Mediabids launched and we have been doing per-response advertising in addition to our conventional online marketplace sales for the past 4 years.

I have been asked to speak a little bit about response-based advertising and there are specific methods that we have developed at Mediabids to handle the demand we have for per-response advertising in print. Not all of these may be right for your publication but here is how we do it:

-          We typically work with advertisers who are willing to pay for an unlimited amount of response.

-          Response is typically defined as a call, a web visit or a text.

-          Response based advertising is heavily reliant upon tracking of the response generated by an ad. At Mediabids we got into charging advertisers on a per response basis because we saw the need for tracking and better understanding the results that print ads were generating.  

-          Every ad that we place has a unique identifier, so we know what each publication is generating.

o   In 2009 we placed 66,350 per response ads for more than 500,000 total insertions.

o   Every single ad we placed had a unique phone number.

o    We then track using the data generated from 800 numbers to determine what a publication is owed.

o   Advertisers typically pay based on either a per-call or per-sale basis and the amounts vary depending on the type of product and the anticipated volume.

-          We give publications the choice of which advertisers they want to run, we resize the ad to their specifications, insert the unique phone number or url, upload it to the website where the publication can download it and then track the response.

-          As some of you may know, most 800#s are really transparent pass-throughs, allowing you to get the information on the caller and then point the call to wherever the advertiser wants the phone to ring.

-          Because we are not depending on the advertiser to provide us data on tracking, we know that the information we use to measure results and then pay publications is accurate.

Per-response advertising accounts for a small portion of what Mediabids does. We are primarily a marketplace for print in which advertising is bought and sold conventionally, in that advertisers pay for space.

However, what we have learned through per-response has influenced everything we do.

From what has gone on in the marketplace over the past 10 years, it is pretty clear that advertiser’s expectations have shifted faster than publications. However, despite what you may read or even hear at times at a conference like this, there is a lot of reason to be hopeful about the future because fundamentally print works. It is important to keep in mind that advertisers don’t love Google or Yahoo because they have some affinity to search based advertising. They spend billions with these two companies because they deliver measurable response.

At Mediabids we have about 17,000 advertisers who use our website to buy ads and in most cases they are spending more in print today than they did 10 years ago. They are not spending more because we are particularly good at selling (as evidenced by my dynamic speaking style), they are spending more because print delivers results and we can prove it.

Suggestion #1: If you are going to talk to advertisers about response you have to have confidence in your product.

Advertisers never tell publications that their advertising works. Your sales reps, people with years of experience, could probably count on one hand the number of times they have walked into an advertiser’s business or called them on the phone and had that advertiser tell them their ad was working well. The problem is that advertisers might be right, they might be wrong. But no one really knows. The tracking methods that advertisers use are weak. The person answering the phone who is supposed to remember to ask – how did you hear about us? Is not a tracking mechanism.  

This constant state of rejection and negotiation creates a type of institutional insecurity. The result is that many people who work at publications seem to have a sneaking suspicion that their product just does not work because, in most cases, that is what their advertisers are telling them- not showing them mind you, telling them.

If you are going to compete with products like Google and Yahoo, you have to believe your publication can generate results and work to make that happen. You have to understand your readers, their demographics and how that overlays on your advertisers’ products, goods or services.

Suggestion #2: acknowledge that advertisers have changed the rules

Google and Yahoo have let the genie out of the bottle. Advertising is no longer about a real estate style approach to a page  – getting an ad on a good page where people will see it – advertising for most companies is now about response, advertising for the sake of a brand is increasingly obsolete for large and small companies and everyday that goes by it becomes more obsolete. This is true in all mediums. Radio, television and the internet are all mediums which have adopted per-response based models and succeeded with them.

If print continues to suffer, it won’t be because of circulation or because publications cannot figure out a way to monetize content or their websites or deliver the product electronically in a compelling way. If print continues to decline it will be because publications still think they are selling real estate in an age when no one wants to buy. Google and Yahoo do not sell real estate, they sell response and results. Selling space against response to a group of advertisers who do not know how to track their own response is a very difficult thing to do.

I am not suggesting that per response is the only hope, in the sense that advertisers should only pay for the response that is generated. Advertisers have changed the rules, because they have changed their expectations.

Whether you use a per call, per sale or charge for space in a conventional manner, you are selling space to advertisers who now care more about the response they are generating than the benefits of branding. Every time someone buys an ad, there is an expectation of response and, unfortunately, most publications don’t have the tools in place to show advertisers how their ads are working.  When advertising works and you can prove it, how you charge is irrelevant. The method of the monetization is academic.

Suggestion #3: Own your data

If publications are going to thrive in the future they must take ownership of the results generated by their product. This is the biggest difference between newspapers and online offerings like Google and Yahoo.

Compare for a moment two mediums - online and print:

With Google’s Adwords an advertiser has real time access to how much money they have spent, how many clicks they have generated and with a simple software install, how many sales the clicks have resulted in. A quick calculation can determine definitively whether those ads are paying for themselves.

Now think about what an advertiser in a daily newspaper does to try to figure out how an ad is working.  A shocking number of advertisers, who are incredibly sophisticated in measuring other mediums, depend on the same devices that were available to them in the 1950s – coupons…  or worse, asking the customer why they called. If you have ever had the misfortune to listen to phone calls, you know that the average American consumer either is uncomfortable answering this question or has an astonishingly short memory, because few people know. In fact, an advertiser we work with did a test where they asked their operator to give the caller 5 choices of where an advertiser heard about a print ad– 4 real publications where their ad appeared and 1 completely fictitious publication. The fake publication outperformed 2 of the real ones.

Advertisers need to be provided the tools to understand how their ads are performing, regardless of whether they are paying per-response, per-sale, or for space.

Tracking for print should not be something left to the advertiser.

1)      Data is valuable. It can be used in so many ways.

2)      Conventional ad selling is, in large part, a negotiation and data is a very compelling selling tool.

3)      Advertisers are bad at collecting this response data themselves and should not be entrusted with this job. Left to their own devices they rarely track results effectively. Mediabids works with more than 17,000 advertisers and there might be 1% who track effectively on their own.

The problem is that when advertisers don’t track, they suspect the worst. We see this first hand – I started Mediabids 10 years ago because I wanted to figure out a way to sell print ads using the tools available through the internet. Thousands of advertisers use our site to buy print ads and four years ago we started to look into why many of these advertisers were increasing their budgets online and decreasing them in print.

The answer was very clear. Our advertisers were not making any effort to track on their own, we were not providing them with any tools and therefore most of the objections to spending we heard centered around the “my  ad is not working” argument. Nothing to back it up, no data, no proof – just a gut feel, the ad isn’t working.

Mediabids got into per-response advertising because we got into tracking.

Like everyone in this room, at Mediabids we knew- on some level - that print worked but we didn’t have any data, we couldn’t back it up, we were as insecure as our publication clients about results. The problem was.. that we really didn’t have a choice – we were really already selling response based advertising without any way of validating the response.

I say that we were selling response based advertising because that is what our advertisers thought they were buying – we were just doing a bad job selling. Because we were selling space, not results. Advertisers were spending money- paying for space - with little concern on our part (Mediabids) or the publicaations’ about the response that was being generated.

Today we track everything in both response-based ads and conventional ads.

What we have learned presents a much different picture than what you have heard about print recently. Here are a few common denominators of the results across advertisers:

-          Print is working

-          The leads generated by print are almost always more valuable than any other medium. More valuable than radio, television or the internet.

-          The ROI of print is almost always higher than other mediums.

-          The close rate on leads generated by print is better than other mediums.

-          The customer retention rate is better: The customers acquired via print tend to be better educated about the products they are buying and therefore are longer-lasting customers.

But Mediabids’ advertisers only know this because we show them and showing them has been worthwhile. In 2009 our revenue nearly tripled after doubling in 2008. Most of our advertisers, who represent a wide cross-section of business types and geographical focuses, spend more today on print than they did 10 years ago because we can show them it works.

Please know, I am happy to get into greater detail of the mechanics of how this is done later.

As I said earlier, Google and Yahoo let the genie out of the bottle and recalibrated advertisers’ expectations but that does not mean that print cannot adapt and succeed by incorporating some basic tracking and measurement devices. In some cases that may lead to a per-response deal. In other cases, a conventional ad sale. But in all cases, we have found at Mediabids, the more data a company has on the response generated by its ad, the more likely they are to feel like their money is being spent wisely.

From Marketing Charts. Read full story here.

They are not right about the long-term viability of alternative methods of delivering news via e-reader type devices but this story points out some of the horrible economics currently in place for publishers distributing content on Kindle and similar devices. One missing ingredient the story does not mention - ads. Currently the e-readers don't deliver the ads with the content but presumably when that begins, it will change the equation.

E-readers, Tablets Not Likely To Save Newspapers

Some industry watchers had predicted that e-readers just might save the newspaper industry - but that has yet to happen, despite the fact that e-reader sales are soaring, reports MediaBuyerPlanner.

About six million e-reader devices - including Amazon’s Kindle, Sony’s e-reader, Barnes & Noble’s Nook, and Conde Nast’s Skiff - will be sold this year, Forrester predicts (via EditorsWeblog).

Newspaper publishers get 30% of subscriptions sold on e-readers, and more newspapers are becoming available every day. Digital newspaper distributor NewspaperDirect, for example, is boosting the number of newspapers and magazines available on the Kindle by 1,400, according to Canada’s Globe and Mail.

Newspapers Can’t Make E-reader Numbers Work

But six million e-readers sold are a pittance when compared with the general US population of more than 300 million people, and the number of newspaper subscriptions sold via those devices will be even smaller. “If the Dallas-Fort Worth area has two percent of that, that’s only 6,000 Kindles,” said James Moroney, publisher and CEO of the Dallas Morning News. Moroney crunches the numbers in a Portfolio article, showing how insignificant e-reader subscriptions really are.

Tablets - the New Newspaper Savior?

Tablets are the latest device being touted as the savior for newspapers, MediaBuyerPlanner said.  With touch-screen interfaces, color screens, web browsing and e-reader capabilities, some think such devices will speed the consumption of digital newspapers. Apple’s iSlate is one such device, said to be ready for launch early this year.

However, as these devices are expected to cost as much as $1,000, they may not be considered as “must-haves” for many consumers. And e-readers boast longer battery life and text that is more easily readable.

Newspaper publishers could boost the potential to cash in on tables by fully embracing multimedia content production and multiplatform distribution, points out the Innovations in Newspapers blog, which offers 10 ways newspapers must adjust in order to take advantage of new content delivery systems like tablets and e-readers.

E-reader Audiences More Affluent, Well Educated

One hope for newspapers in terms of e-reader audiences is that users skew higher in terms of education and income than the general public, which means newspapers may be able to attract more luxury advertisers. According to Mediamark Research & Intelligence, e-reader users are 11% more likely than the average adult to own their home and are 87% more likely to have annual household income of $100K+. And they are 111% more likely than the average adult to have obtained a Bachelor’s or post-graduate degree.

“Clearly, users of the current generation of e-readers are highly educated, upscale and internet savvy,” said Anne Marie Kelly, SVP, marketing & strategic planning, at MRI.

Magazine ad pages continued their slide in November. MediaBuyerPlanner reports that MIN's latest survey of ad pages sold in consumer magazines show that November ad pages were down 19.2% from November of 08. There are a few bright spots.

Of 171 titles MIN reported on, 84% saw ad pages decline for the month; 46% saw pages fall more than 20%, and 24.5% saw declines of 30% or more. Conde Nast’s W was one of the biggest losers, down 51% in ad pages, while Elle Decor was down 49%.

A few titles improved in November. People Stylewatch, for example, was up 32% in ad pages, and National Geographic was up 21.2%. Southern Living, More, Real Simple and Guns & Ammo also gained significantly in ad pages for the month.

MIN’s figures echo the third-quarter results recently released by the Publishers Information Bureau. Total ad pages for consumer magazines were down 26.6% for Q3 compared to the third quarter last year, per PIB. For the first half, ad pages were down 27.9%.

ZenithOptimedia’s latest ad forecast predicts that global ad spending will bottom out this year and will return to positive growth - though at just 0.5% - in 2010. Magazine advertising, however, will continue to decline for at least the next two years, ZenithOptimedia says.

From paidcontent.org: IRex offering better deal to publishers than Kindle. (See related story a few entries down in this blog). The IRex e-reader is hoping to compete with Kindle, in part, based on its ability to attract periodicals. Sounds good, but will people buy the IRex?

"How does the iRex model for periodical publishers differ from Amazon? Hamilton’s pitch: “We’re saying, you promote your product, you price your product, you format and deliver your product in the way that you want to and you’ll enter into a 1-to-1 relationship with your customer. We’ll facilitate that and we’ll take a piece of the revenue. We don’t want to stand in between the customer and the publisher, if you want to cross sell or upsell or cross market or do other things with your customer, it’s your customer. We’re not going to try to dictate or control that. The Amazon approach is very different .. The publisher is cut out of the loop. Almost every publisher we’ve gone to has been very dissatisfied with that model and they’re very eager to be connected to their customers.”

Full story here