Publishing’s church-state wall is crumbling? Good riddance

The historical divide between editorial (church) and advertising (state) has morphed from publishing’s sacred cow into a red herring – a way to deflect the discussion away from an entrenched culture that can’t let go of outdated, unsustainable ways of doing business.

The issue has re-entered the spotlight following the release of the New York Times’ internal-yet-widely-circulated Innovation report, and also as Time Inc. nears its formal spin-off from Time Warner. Time CEO Joe Ripp, you may recall, caused a stir last fall when he announced, as part of the hiring of Norman Pearlstine as chief content officer, that editors would report into the group presidents of their respective divisions.

“We believe effective collaboration across business and editorial lines is imperative if we are to succeed as an independent company.  With the headwinds facing our industry, we must approach our business through a more entrepreneurial lens and break free from bureaucracy.  We are confident this new structure will create a strong partnership between business and editorial, promote creativity and result in a cohesive vision for each of our brands that will be essential to long-term growth.”

The pronouncement caused much angst among critics who promptly decried the death of the church/state divide or, heaven help us, of journalism altogether. Now it’s the New York Times’ turn under the microscope.

A call for collaboration

The 10 staff members who researched and wrote the internal report, which was originally published, somewhat ironically, by BuzzFeed, were frank in their criticisms of the Times’ slow transition to digital. While they did not recommend wholesale reorganization, they did strongly encourage better collaboration between editorial teams and business functions that are focused on what they call the reader experience.

At the Times, there’s no shortage of resources in those reader-focused functions: approximately 30 people in analytics, 30 in digital design, eight in R&D, 120 in product development, and a whopping 445 in technology. So how does the Times’ editorial staff leverage this deep digital talent pool? Not well, apparently.

The report cites “widespread concern” in the newsroom “that it is inappropriate to speak with colleagues on the business side’s payroll.” A leader in one of the Times’ reader experience departments commented, “Everyone is a little paranoid about being seen as too close to the business side.”

The barrier often results in duplicate work or work with “limited utility” for the newsroom – because designers and developers are simply guessing at editorial needs and priorities. “We can sit around and come up with ideas all day long up here, but they have no legs without editors,” Ian Adelman, digital design director, says in the report.

The authors’ recommendations emphasize better collaboration:

“We still have a large and vital advertising arm that should remain walled off. But the many business-side departments and roles that are focused on readers need to work more closely with the newsroom, instead of being kept at arm’s length, so that we can benefit from their expertise.

We are not advocating a huge new bureaucracy, disruptive reorganization, or a newsroom takeover of these departments. We are simply recommending a policy shift that explicitly declares that Reader Experience roles should be treated as an extension of our digital newsroom – allowing for more communication, close collaboration and cross-departmental career paths.”

A more radical approach

Not every publisher advocates such a measured approach toward a digital transformation. Zillah Byng-Maddick, the newly appointed CEO of UK enthusiast publisher Future, recently promised wholesale changes in order to fix a business model that she said “isn’t working hard enough, isn’t sustainable and needs to change.” From the Guardian’s David Hepworth:

[Byng-Maddick] said there would be redundancies and for those remaining promised a very different way of doing things. For a start the business would no longer be structured round content types. Instead a single content and marketing team would produce all content.

Centralizing editorial staff for such a diverse portfolio of brands – Future has titles that span technology, cycling, crafts and cinema – is a bad idea in its own right. This type of streamlining/cost-cutting rarely (never?) improves the quality of the editorial content. But adding marketing to the content mix will completely muddy the waters and erode any editorial independence that once existed. If Future heads down this path, expect its business to crumble as good journalists leave and readers lose faith and trust in the editorial product.

So why is all the concern about the crumbling of the church/state wall a red herring? For one thing, it’s not a new phenomenon. Advertisers (and, as an extension, publications’ own sales teams) have long tried to exert their influence on editorial coverage. From Hepworth’s post about Future:

“Like overheated suitors, advertisers used to lean against the wall between church and state. … hoping against hope that they would be the first one to punch a hole in that structure. … They wanted to be the one to get their brand on the cover, their product featured on the editorial pages without the pesky words ‘advertorial’ above it, their editorial credits more numerous than any of their competitors.”

Some publishers – especially smaller shops – have been more accommodating than others. In a recent discussion about native advertising, the head of a tiny niche publisher commented, “One advertiser asked me why should they buy a native ad when they can continue to pay us to write articles about them?”

Most editors with any chops, however, diligently guard against the unwanted advances of overzealous advertisers and salespeople. And they should continue to do so. But there’s a difference – a huge difference – between maintaining editorial independence and finding ways to collaborate with the business side to ensure that the editorial products they’re developing can actually make money, directly or indirectly.

Translating editorial into business value

A recent report about the lack of digital tools in news organizations, published by the DeWitt Wallace Center for Media & Democracy in the Sanford School of Public Policy, describes this problem and the way to resolve it:

Getting the full value of [editorial] work requires … that newsroom executives coordinate with their business counterparts to make sure the work gets the marketing, promotion and sponsorship it deserves, given its power to engage news consumers.

That’s a conversation that doesn’t always come naturally in organizations that have church-and-state walls between journalists and the business types. But it’s a conversation that many of the people who have done pioneering work in data journalism know needs to happen if the audience and stories their work generates are going to help the industry’s bottom line.

The Times report, unfortunately, highlights a newsroom culture that actively discourages any type of business collaboration:

“The newsroom has historically reacted defensively by watering down or blocking changes [suggested by reader experience departments], prompting a phrase that echoes almost daily around the business side: ‘The newsroom would never allow that.’”

For news and magazine publishers to survive in the digital age, we need to move beyond the tired church-and-state debate toward more productive discussions about the value a publication brings to its audience, and the ways in which all parts of the organization – editorial included – can work together to create a model for sustainable growth and profitability.

Recommended reading

Why print magazines endure

In a survey released this week by CXense, 37% of nearly 400 U.S. publishers said they believe print will continue to be the primary way readers access their content. Another 34% said print was the least important channel going forward, behind smartphones, tablets and PCs.

That bull-vs.-bear split nicely sums up the debate about the future of print. You either love it or hate it. It’s either driving your business or strangling it. Print titles are closing, and new titles are launching (or relaunching) – some from digital-native publishers. Magazine publishers toil in a world of contradictions and conflicting bullet points.

Beyond breathless romanticism for the “tactile feel” of a magazine page (which, thanks to low-quality paper stock, is far less gratifying than it once was), publishers have their reasons for maintaining a print franchise. Some are more defensible than others. I put them in two broad categories.

Revenues

Print subscriptions and ad pages may be flat or declining across the vogue-coverindustry, but for many publishers print still drives the revenue train. Digital traffic and ad sales are growing quickly but aren’t close to closing the gap with print revenues or margins.

Some magazine veterans continue to defend the power of print as an advertising medium. At a recent Hearst event, media critic Michael Wolff said that “advertising probably works better in print than any other medium; it represents the ultimate engagement,” and that “advertising is so significantly less effective in the digital world, we’ve created a world that can’t pay for itself.”

Vogue Publishing Director Stephen Quinn, speaking recently at Magazines Ireland’s Publishing360 conference in Dublin, said Vogue’s gross print revenues were 11 times that of its online revenues in 2013.  Vogue’s print ad pages and revenue have grown each year since 2009. “The money is still in print – that is overwhelmingly true for Vogue,” he said.

An iconic fashion magazine brand such as Vogue can feed the conventional wisdom that in print magazines, readers consider the ads nearly as valuable as the editorial. Many publishers – and their advertisers – still subscribe to this mindset.

“As much as some of my colleagues on the editorial side may bristle at this, I recognize that readers often buy a print magazine for the ad experience as well as for the edit experience,” Fast Company editor and managing director Robert Safian recently told Adweek. “As long as marketers continue to believe that, we’ll be able to support creating that [print] content experience.”

Fast Company recently was named Magazine of the Year at the National Magazine Awards.

Inertia/Fear/Denial

For a few iconic consumer brands, continuing to pour resources into print is a legitimate growth strategy. For the rest of us, including most B2B publishers, probably not so much.

Which brings me to the second main reason publishers hang on tightly to their legacy print business: They don’t know what else to do. Cultures are slow to adapt to a digital-first mentality, often because operations remain tuned to the legacy business. Sales programs and incentives are structured around print, with digital products offered as add-ons; editorial workflows and content management systems are based on weekly or monthly print cycles, with web/mobile/social tools bolted on, or maintained separately.

If the print business is not growing, this structure creates a downward spiral, often managed through cost-cutting in a feeble attempt to maintain profitability on the print side. Cost-cutting is not a growth strategy, unless those resources are being reinvested in growth areas.

Consider Meredith’s Ladies Home Journal, which last month announced plans to kill its monthly print edition. Meredith said the brand will live on as a “robust digital presence”and a quarterly, newsstand-only publication. That could be challenging, considering the entire editorial staff was laid off.

Print vs. digital does not have to be an either-or proposition. “The best way to tell a story is across multiple platforms,” Roy Schwartz, chief revenue officer of Politico, told Folio earlier this year in regards to parent company Allbritton Communications’ plan to launch a monthly print edition of Capital New York magazine. “The key to the success is to be able to offer clients a true cross-platform solution.”

The key is also to align costs so that you’re investing in the parts of the business that are growing. Some publishers are already taking steps to decrease emphasis on print – through reductions in frequency, for example – while funneling more resources to web and mobile development. It sounds fairly simple, but for legacy publishers that have been following a print-first path for decades, changing lanes can be painfully difficult.

A small publisher makes a big bet on native advertising

Many print publishers approach digital innovation in increments, preferring smaller, transitional experiments over big-bang transformations. The Daily Tea doesn’t fit that mold.

The Daily Tea is the newly rechristened publication formerly known as Tea Magazine. The rebranding is just one part of a far-reaching business model overhaul that also involved eliminating the bimonthly print magazine and embracing a combination of native advertising and paid content as a foundation for growth.

Graham Kilshaw, The Daily Tea’s chief media officer, believes the new model better positions the brand to capture a broader, younger audience – a new generation of tea enthusiasts, if you will.

“The print audience was extremely loyal – and very vocal about wanting to keep print,” said Kilshaw, who was part of a group that purchased Tea Magazine in 2012. Over the past two years, however, the subscriber base remained flat at around 1,000, while the digital audience – website visitors, email subscribers and social media followers – grew from virtually zero to 30,000.

“It didn’t take a genius to know where the audience was,” Kilshaw said. As importantly, engagement through the digital channels was strong – as much as 30% of the magazine’s Facebook fans, for example, were participating in conversations. “So it wasn’t just quantity – there was a quality component [to the digital audience] as well,” he said.

The-Daily-Tea-desktop

Educating advertisers

That was enough to convince the Daily Tea team to replace the existing business model, which was based on print subscriptions and display advertising, with a digital/mobile-first strategy built around a mix of sponsor and paid content. One important step in the transformation was educating existing advertisers about why native ads were a better way forward than traditional banner advertising.

“I believe there’s a desire among an enthusiast audience to be loyal to certain brands – they want to find brands they love,” Kilshaw said. “For this reason, sponsor content works particularly well for niche audiences. The advertisers understood that.”

The Daily Tea made the transition easier for its existing advertisers by locking in their display campaign commitments through 2014 – meaning The Daily Tea will produce all the content for each brand for the rest of the year at no additional cost. For new advertisers, The Daily Tea will sell native ads on a CPM basis, based on a minimum of 10,000 impressions.

Banner ads are still in the digital mix, albeit in more of a supporting role to the sponsor content. “There’s a visual connection between the banner ad and the sponsor content,” Kilshaw said. “It’s not so much to get people to click on the banner ad, but to get readers to more fully understand that this is sponsor content. It’s another way of branding the article.”

The early returns are positive. Open rates for the first round of sponsor content have averaged between 5-10% – far outpacing banner click-through rates.

“Clearly, that’s a very nice engagement metric to take to clients and say, ‘don’t run banner ads, run sponsor content instead,’ ” Kilshaw said.

Creative development for native ads

The Daily Tea is building a small marketing services team to help Daily-Tea-native-mobileadvertisers create native content. Jamie Santoro, hired 18 months ago as a “brand journalist” who reports to marketing, is part of a weekly brainstorming session to generate story ideas for brands, with an emphasis on content that makes an emotional connection with the audience.

“Emotion creates engagement – and conversely, dull material gets ignored,” said Kilshaw. “If [sponsor content] does not generate a clear emotion, we go back and start again. We’re also clear on what crosses the line – if it’s just a commercial, we won’t do it. That’s a very real part of our process.”

(One criticism I have is that disclosure of the sponsor content is not as clear as it should be. Home page posts are labeled as “presented by [sponsor name]” with the brand logo. Sponsor content on topic landing pages, however, is not labeled until you reach the article page.)

Rethinking paid content

The Daily Tea didn’t just shake up its ad model. It also revamped its subscription offering to reflect its digital-first focus. Subscribers used to pay $24.99 for six print issues a year; now, for the same price, they will get access to premium digital content along with the annual Daily Tea Guide, a 150-page “bookazine” that features longer-form articles, sponsor content, catalog pages and a few display ads. The first Daily Tea Guide will be released in September.

The “bookazine” is emblematic of a trend many legacy publishers are pursuing: transitioning print into a channel for specialized, premium content. Readers will also be able to purchase the guide separately for $9.99.

Kilshaw said about 10% of The Daily Tea’s web content will be behind the subscription wall, and producers are currently developing more original content for the site. A digital-only subscription will be $19.99 a year.

The Daily Tea’s transformation shows that innovation doesn’t require deep pockets – just a willingness to experiment with new models and allocate resources to where the business is going, not where it’s been. The moves carry no guarantee of success, but at least they’re pointed in the right direction.

6 strategies to drive a digital media transformation

I had the pleasure of speaking at Magazines Ireland’s Publishing 360 conference in Dublin this week. Here’s a cleaned-up version of my speaker notes. It’s a long read, but I believe it captures the most important trends we’ve been covering here for the past several months.

The dynamics of the magazine publishing industry continue to change dramatically. Print advertising pages and circulation continue to fall across the industry. Digital revenues are growing but still haven’t made up for the drop-off in print revenues at many media companies.

At the same time, ad spend still is not well aligned with consumer behavior. In 2013, consumers spent 38% of their media time on PCs or mobile devices, but advertisers spent just 21% of their ad budgets on those channels. If you just look at mobile, the gap is even wider: 19% share of time spent on mobile vs. 3% of ad spend. Digital advertising will account for just 13% of B2B marketing budgets in 2014.

ad-spend-vs-time-spent

There are some signs that marketers are taking steps to close the digital gap as the overall ad industry rebounds from the global recession:

- Growth rates for global advertising will improve from 3.9% in 2013 to 5.5% in 2014 to 6.1% in 2016, according to ZenithOptimedia.
- Eurozone ad spend is expected to grow 0.7% in 2014 – its first year of growth since 2010 – rising further to 1.7% in 2016.
- Global online ad spend grew 16.2% in 2013, a rate that ZenithOptimedia expects to continue through 2016.
- Global online display expected to grow at 21% annually through 2016 – overtaking paid search for the first time in 2015.
- 70% of B2B marketers said they plan to increase digital advertising expenditures in the year ahead, according to Forrester and the Business Marketing Association. On average, B2B marketing budgets will rise 6% in 2014.

Picking up the pace of digital transformation

In a recent report by EY, 70% of companies considered “digital leaders” in the media and entertainment industry – meaning those that get more than half of their revenues from digital – said they were willing to accept short-term revenue losses as they move up the learning curve for new media. And 65% said they are prepared to cut legacy media investments to support digital efforts.

That 50/50 split between print and digital revenues has become a symbolic milestone for many publishers. Only a handful, including IDG (2008), The Atlantic (2011), Wired (2012) and Forbes (2013), have announced publicly that they’ve reached the tipping point where digital revenues have surpassed print. At many other publications – large and small – the print engine still drives the revenue train.

We’re replacing print dollars with digital dimes. So you need to stack a lot of dimes to drive profits. For publishers that have been trying to protect their legacy print business while investing cautiously in digital, decisions on when and how to shift more resources toward growth channels are taking on greater urgency.

Here are six strategies that can help magazine publishers build a stronger foundation for a digital transformation.

1. Diversify in digital

Digital is not a product. Digital is an ecosystem of many channels – web, mobile, social – for building and serving your audience. The products and services you offer must be tuned to meet the diverse needs and activities of readers in each of these channels.

The best way to begin stacking dimes is with a diversified portfolio of products and services that generate either advertiser or reader revenue – along with a strategy for selling integrated, multi-channel programs.

Advertiser revenue:

  • Display advertising
  • Native advertising
  • Programmatic
  • Private ad exchange
  • Sponsorships
  • Affiliate marketing
  • Marketing services

 Reader revenue:

  • Subscriptions
  • Single-copy sales
  • E-commerce
  • Events
  • Data products
  • Apps

Some of these products are very traditional. Some – like native advertising, programmatic buying and private ad exchanges – are newer and more jarring to existing models. The key here is to experiment with lots of products and programs, measure them religiously, and redirect resources to the ones that show the most potential.

Selling cattle online

Farm Journal Media is a great example of how a B2B media company can successfully transition into the digital age with a mix of advertising, commerce and reader revenue. The 138-year-old publisher, whose agriculture magazines include Farm Journal, Top Producer and Beef Todayhas aggressively built out its digital product offerings to create more inventory and more options for advertisers to reach farmers through a variety of web and mobile channels.

Over one recent 12-month period the company’s eMedia division released two dozen new products or feature enhancements, including an e-commerce site for cattle, an ad network and three mobile apps. Diversification has put the business on track to grow its revenues by 80% during its current five-year planning period.

Cattle-exchange-Farm-Journal

2. Embrace the ‘brand as publisher’ trend

We’ve been writing about brands’ growing interest in creating their own content since eMediaVitals launched in 2009. The trend shows no signs of fizzling. According to the Content Marketing Institute, 90% consumer marketers and 93% of B2B marketers are investing in content marketing. Consumer brands are spending an average of 24% of their marketing budgets on content, 60% plan to increase spending over the next 12 months, and 72% are planning to create more content, including blogs, videos, articles, e-newsletters and case studies.

CMI-content-marketing-plans

While some companies, from American Express and LinkedIn to Red Bull and Tesco, are aggressively building their own media brands, many more lack the skills and other resources needed to consistently create and distribute quality content. That’s why nearly two-thirds of marketers outsource writing, 4 out of 10 outsource design, and another 27% outsource content distribution.

Still, just 42% of B2B marketers believe they’re effective at content marketing. That’s a big opportunity for publishers. Some are already starting to capitalize. Meredith reported a 35% increase in operating profit at its content marketing group for the December quarter, compared with a 1% profit for its magazine group.

Tech publisher IDG has also created a successful marketing services business. The group offers a half dozen core service lines, from mobile marketing to lead nurturing. The group accounted for approximately one-quarter of the company’s total US revenues last year.

The native ad bandwagon

One high-growth area of marketing services is native advertising. As brands’ interest in native advertising grows, publishers have an opportunity to offer services not just for hosting these native ads, but for helping brands develop the content that goes into them.

Forbes is one brand that has invested heavily in native advertising with its BrandVoice program. BrandVoice participants doubled from 15 in 2012 to 31 last year. Those 31 brands published approximately 1,700 posts, which generated more than 11 million pageviews. In 2013, BrandVoice partners accounted for 20% of Forbes’ total ad revenue, a share expected to increase to 30% this year.

The UK’s Guardian is a more recent entrant into the native ad services space. In February the Guardian launched Guardian Labs, a group of more than 130 creatives, strategists, designers, video and content specialists who will develop content and products on behalf of brands. The Guardian’s first program was a seven-figure deal with Uniliver to develop and publish content, including interactive media and live events, on sustainable living.

But native is not just for big-brand publishers. Enthusiast publisher guitars-and-gear-Premier-GuitarPremier Guitar recently hosted a native ad campaign with online retailer Sweetwater. The publisher and brand co-hosted a live video program looking at the 24 coolest products introduced at the National Association of Music Merchants trade show. Each hour-long video segment included links to pages for each featured product – with a “learn more” link that clicked through to Sweetwater’s e-commerce site. The videos generated more than 200,000 views, and Sweetwater sales of guitars and related gear increased 50% year over year for March, when the program ran.

3. Publish with a (re)purpose

Publishers need to continue to explore new ways to “skin the pig” – maximizing their editorial by repurposing content in different formats for different channels. We’ve come a long way from simply reposting print articles online – but there’s a lot more that can be done to leverage your editorial team’s interviews, event coverage and research.

Vox, the startup news site founded by former Washington Post blogger Ezra Klein, just launched a feature that lets users toggle between a story and the interview transcript from the story’s main source. It’s a cost-effective way to present content in two different forms. It gives more depth to readers who choose to dive deeper. And it provides another way to test editorial content to see what resonates with readers.

Ogden Publications, publisher of Mother Earth News, is also investing more resources in repurposing content. It regularly publishes excerpts from its extensive library of books, creating slide shows, blog posts and social media content that not only drives page views, but also drives traffic back to the book page.

Mother-Earth-Beekeeping

Ogden CEO Bryan Welch recently told Bo Sacks that the company has hired a team of editors dedicated to “content proliferation”:

[Their assignment is] taking pieces of preexisting content, updating them and optimizing them for the web emphasis on engagement rather than page views. They have dramatically improved our efficiency in creating new products from repurposed content.

Publishers have also found success in aggregation and curation – in other words, repurposing other brands’ content. Upworthy has built a booming businesses off of third-party video content – to the tune of around 50 million unique visitors a month. It’s now beginning to monetize its model through native ads – in the form of curated brand videos.

Regardless of the source, the key to successful repurposing is creating quality content, not cheap knockoffs.

4. Turn print into something special

If circulation revenues are declining, it may be time to rethink the frequency and purpose of the print magazine.

“Print is not dead – though it will become increasingly coffee-tableish and  collectible,” said Peter Sprague, chairman of Premier Media Holdings, which publishes Premier Guitar.

Publishers with deep archives can create a variety of theme-based special print editions that can generate incremental reader revenue. Ogden, for example, repurposes content for special print editions for the newsstand and periodic digital products like special e-editions. Playboy recently released an exact replica of its inaugural December 1953 issue, priced at $9.99, or $2 above the typical cover price.

Special issues, if done right, can generate so much buzz that they Sports-illustrated-swimsuit-2014outperform regular issues. Sports Illustrated’s Swimsuit issue has become a franchise in its own right; this year’s 260-page print edition contained 112 ad pages, a 14% increase from 2013. The 2013 issue sold more than 800,000 copies on newsstands, while overall newsstand sales averaged just over 68,000 per issue for the first half of 2013.

The key is to get ahead of changing consumer habits. Special editions can create emotional bonds in a way that regular weekly or monthly issues cannot. Start thinking now about ways to combine an increase in special editions – theme-based issues, rankings, buyers’ guides – with a reduction in overall print frequency to improve profitability.

Waiting too long could doom a print franchise. Meredith recently announced that Ladies’ Home Journal would cease monthly publication after 131 years in print. The publisher’s plan to turn the magazine into a special interest publication sold on newsstands was more about cutting losses than creating a growth strategy for the magazine – a sad end to an iconic brand.

5. Be a mobile leader, not a laggard

Are marketers finally ready to align ad spending with consumer media habits? Mobile advertising is growing six times faster than desktop internet; Zenith forecasts mobile ad spend will grow by an average of 50% a year between 2013 and 2016. By 2016 mobile will account for 28% of all Internet ad spending and 7.6% of total ad expenditures – leapfrogging print magazines (along with radio and outdoor) to become the world’s fourth-largest ad medium.

Everyone knows that mobile is a game-changer. Publishers need to take the lead in optimizing their websites, newsletters and other digital content for mobile.

A good first step in mobile optimization is responsive design, a technique that automatically resizes layouts based on the screen size of the device loading the content.

COLE Publishing built responsive design versions of all eight of its magazine sites serving the wastewater treatment industry, including Pumper and Treatment Plant Operator. COLE has seen a notable increase in mobile traffic and total visitors in the year since launching the redesigns. For example, on Pumper.com, traffic coming from mobile devices increased from 25% in March 2013 to 37% this past March. Monthly unique visitors have more than doubled since March 2012.

The redesign hasn’t moved the needle much on the business side yet, however. COLE President Jeff Bruss says they’re still educating advertisers on the value of mobile-specific programs, but he feels they’ve laid a foundation for growth once brands start to grasp the importance of mobile for COLE’s B2B audience.

TPO-responsive-COLE

Email is another channel ripe for mobile optimization – by both brands and publishers. More than half of UK businesses in a recent Econsultancy survey said their mobile email strategy was either “basic” (39%) or “non-existent” (22%).

Advantage Business Media (which owns eMediaVitals) redesigned the newsletter templates for all 26 of its brands after realizing that as much as 45% of its subscribers were accessing its newsletters from mobile devices. Since the responsive templates rolled out over the course of late 2013 and early this year, ad click-throughs have risen by 30%.

Got apps?

There’s still plenty of debate and confusion about whether publishers need an app strategy. Some may consider digital replicas or enhanced tablet editions to be table stakes, but they don’t really address the way mobile users access content. Instead, consider an app strategy that emphasizes utility over information.

Farm Journal’s Cash Grain Bids, for example, is a location-based app that helps farmers compare local grain prices. The RunHub app from Runner’s World magazine includes customizable training plans, route mapping and some community features for runners.

Branded apps can also be useful for any conferences you host – while opening up new advertising streams and audience engagement opportunities. DoubleDutch, a creator of event apps, claims that 56% of users access its clients’ event applications at least 10 times on average.

6. Amaze & delight your audience

In the old days, publishers acted as the ultimate gatekeepers of content, deciding what to cover with little direct input from their audience, save for the occasional survey or focus group. But the way customers interact with businesses in all industries has changed dramatically, and publishing is no exception.

The new school of thought involves actually serving your readers, based on their needs and desires. Ogden’s Welch recently said that his company’s most important innovations have centered on “accelerating use of audience feedback and digital metrics to grow larger audiences and achieve higher levels of audience engagement.”

Ogden’s brands are constantly collecting audience feedback by tracking visitors’ digital activities but also through traditional means, like weekly surveys. Welch believes it’s critically important for premium publishers to  strengthen the emotional bond between their media brands and their audiences to create long-term value.

Jeffrey Rorhs, a VP for ExactTarget and author of “Audience,” spoke recently about what he calls a red velvet approach to customers. He cited five core elements that can deliver value to publishers and their audiences:

  1. Serve the individual. Publishers have the ability to build a large audience but leverage technology to deliver tailored service to individuals. The goal is to get direct, permission-based, push-button access to individual readers.
  2. Honor their unique preferences. Publishers should be leveraging predictive intelligence to personalize content, just as retailers use behavioral and transactional data to make product recommendations (e.g., If you like this you’ll also like this). Even small personalizations can create emotional connections, he said.
  3. Deliver timely, relevant content that improves their lives. If someone downloads a piece of content, subscribe to a newsletter or follow you on Facebook, they expect something relevant in return.
  4. Surprise them with access. Publishers who pull back the “velvet rope” on their business will drive attention and loyalty from their audience. Programs that target “superfans” (such as the one recently introduced by Slate) can drive reader revenue more effectively than a paywall, because readers don’t feel like they’re being charged for something that they used to get for free.
  5. Delight them with your humanity. A restaurant called the Melt Bar & Grilledin Ohio offers any customer that gets a tattoo featuring its logo a 25% discount for life. More than 500 have gone under the needle in the name of grilled cheese.

Personalization plays a key role in a publisher’s ability to amaze and delight readers. Publishers should continue to explore ways to repurpose content to serve ever-narrower segments of their audience. Premier Guitar’s Sprague calls it “sub-compact” publishing – the ability to slice up a niche, such as guitars, into smaller components – guitar lessons, reviews, artists, etc. – and deliver customized content to those segments.

These six strategies are not short-term fixes. A digital transformation requires time to build the skills and scale required to be successful, along with a commitment to constant experimentation and a willingness to take a few risks. But those risks are better than the alternative – the risk of falling further behind by doing nothing.

Is native advertising a dead end?

Is native advertising a dead end for publishers and brands? Ad agency exec Kirk Cheyfitz believes so, calling native ads “a passing fad in the slow demise of traditional advertising.”

In an article for Chief Content Officer magazine, Cheyfitz, CEO and chief editorial officer of Story Worldwide, says that publishers “have talked themselves into believing that ‘native’ is the long-sought replacement for dwindling ad revenue.”

Cheyfitz argues that advertisers really don’t need publishers as part of their media mix and advocates that brands instead focus on their own websites or “neutral” sites like YouTube to distribute their content. In a digital world, he writes, “publishers and their audiences are not particularly valuable to advertisers” and cites research indicating that consumers trust brands more than they trust mass media:

Gallup tells us that last year only 44 percent of Americans trusted mass media. At the same time, Nielsen says that 69 percent of the global online audience trusts what they see on brand websites. In other words, Gallup and Nielsen find brands are roughly 1.6 times more trusted than publishers. So following the logic of the native ad argument, advertisers should be selling space on their brand websites for publishers to publish more credible news.

(For balance, Cheyfitz also could have cited a Forbes-commissioned study by IPG Media Lab, which found that consumers were 41% more likely to share branded content when they read it on Forbes.com vs. the brand’s own website. It’s all how you choose to spin it, I guess.)

Publishing brand content on a third-party media site, Cheyfitz writes, actually diminishes the value of the content:

Brand storytelling with rich content is powerful because audiences — the people formerly known merely as “consumers” — pay attention to valuable content and reward brand-authors by sharing such content with friends and strangers on social platforms. This social sharing increases impact (by two to four times, studies show) and reach (up to nine times, mathematical models show), reducing media spend and boosting efficiency (by as much as 100 times).

A story good enough to accomplish all that is actually rendered less effective (from the advertisers’ viewpoint) by appearing to be part of a publisher’s site. …  Why? A brand must be known as the provider of such content so audiences will see the brand as trusted ally, valued adviser, and inventive entertainer. No sane brand would spend money to create great content only to let some publisher or broadcaster get the credit.

Provocative, but Cheyfitz misses a couple of key points. First, a publisher doesn’t get “credit” for a native ad – the brand does. While much of the debate around how native ads should be labeled centers on ethics and disclosure from the publisher’s standpoint, clearly identifying the source of branded content also benefits the advertiser – by giving them proper credit for producing it.

Second, by painting all media with the same brush, Cheyfitz ignores niche publishers, which have cultivated audiences that advertisers most definitely want to reach. As publishers get better at using audience data to improve targeting tactics, their readers will become potentially even more valuable to brands.

Successful native advertising comes down to this: a collaboration that creates value for the brand, the publisher and, most importantly, the reader, by delivering high-quality, relevant, credible content.

Yes, brands have (re)discovered that storytelling is a powerful communications tool. They will continue to invest in content marketing as a way to make more engaging, direct connections with customers or prospects. But eliminating paid media as a distribution channel for branded content is shortsighted, because it ignores an important lesson that publishers and brands alike have learned over the past decade: that a good digital content strategy finds consumers where they are, not just where you want them to be.

Publisher sites – and the evolving native ad model – will continue to play an important role in the marketing mix for digital-savvy brands. The onus is on the publishers to convince brands that they offer enough added value – through their audience, their content development expertise or other services – to justify a paid program.

Don’t ignore big data – but don’t bet your marketing budget on it, either

Forrester’s Laura Ramos implores B2B marketers to “make a date with their big data destiny.” It’s true that B2B marketers can’t brush off big data as a consumer trend. But they also must understand the limitations that are inherent in big data analytics.

The changing expectations of business buyers – empowered by mobile and social media – “presents big problems to B2B marketers” who are used to leading their campaigns with products and features, Ramos wrote in a blog post last week. B2B marketers “now find they need to fulfill these expanding digital expectations by getting closer to customers and knowing much more about them — a tough problem if access to, quality of, and practices around using customer data are underdeveloped,” she explained.

Ignoring important lessons

Economist Tim Harford goes a step further, suggesting that some of the statistical frameworks on which big data is built are flawed. “While big data promise much to scientists, entrepreneurs and governments, they are doomed to disappoint us if we ignore some very familiar statistical lessons, Harford wrote in an article for the Financial Times.

Harford says one of the myths of big data is the definition that “N = All” – in other words, when we have access to all data, there’s no sampling bias “because the sample includes everyone.” But that’s not quite true. “Big data sets can seem comprehensive but the “N = All” is often a seductive illusion,” Harford writes. ““There must always be a question about who and what is missing, especially with a messy pile of ‘found data.’”

As an example, he offers Boston’s Street Bump smartphone app, which uses a phone’s accelerometer to detect potholes as people drive around the city and uploads the data to a government server for identification and analysis.

“Solving the technical challenges involved has produced, rather beautifully, an informative data exhaust that addresses a problem in a way that would have been inconceivable a few years ago. The City of Boston proudly proclaims that the “data provides the City with real-time in­formation it uses to fix problems and plan long term investments.”

Yet what Street Bump really produces, left to its own devices, is a map of potholes that systematically favours young, affluent areas where more people own smartphones. Street Bump offers us “N = All” in the sense that every bump from every enabled phone can be recorded. That is not the same thing as recording every pothole.”

Using big data to produce better insights will require “large strides in statistical methods,” Harford wrote. “‘Big data’ has arrived, but big insights have not.”

That conclusion is echoed by Dennis Kempner, president of Biel’s Document Management, in a blog post on AIIM.org. “The importance of data isn’t that it exists; it is what we are going to do with that data,” Kempner wrote. “Data analysis is useless if there is no one there to relate it to the company, the company’s mission and what consumers are looking for.”

Beyond basic profiling

Where will these insights come from? B2B marketers, Forrester’s Ramos wrote, must be “willing to go beyond basic customer profiling to tap into the abundance of behavioral data and firmographic insights found in conventional as well as unconventional B2B data sources.” Those sources include Internet browsing, search, smart device usage, content consumption and business community social activity.

“By analyzing the footprints that their best customers leave behind, B2B CMOs can more accurately map their journeys and use technology … and analytics to predict where the next best business opportunities will show up,” Ramos wrote.

As long as they understand the inherent gaps and potential biases in the data they’re collecting. “The data are bigger, faster and cheaper these days – but we must not pretend that the traps have all been made safe,” Harford wrote. “They have not.”

Innovation lessons from an industry pioneer

Last week’s passing of Pat McGovern, founder of tech publisher IDG, feels like the end of an era. Over a span of five decades, McGovern brought a passionate spirit and a culture of innovation to B2B publishing – qualities that too often are absent from today’s B2B media companies.

I met with Pat a few times during my time at IDG from 2004 to 2006, and each interaction left an impression, similar to the times I spent with another tech publishing legend, Bill Ziff, who led IDG rival Ziff-Davis through the mid-1990s. Both were larger-than-life yet surprisingly humble leaders who balanced strong business instincts with a passion for journalism – and the people who produce it.

Here are three lessons B2B media leaders can (and should) take from McGovern’s approach to publishing.

Find & cultivate new markets

Pat McGovern IDGMcGovern was a big thinker who saw great promise in emerging markets for technology news and information, not just in the U.S. but internationally. Just five years after launching Computerworld in the U.S. in 1967, McGovern launched Shukan Computer in Japan, kicking off a long string of global licensing deals and other partnerships that built IDG into a global powerhouse. In 1980, McGovern forged one of the first joint ventures in China by a U.S. business. In 1992, he established IDG Technology Ventures, one of the first venture capital firms in China.

In a 2000 oral history (pdf) for the Computerworld Honors Program, McGovern summarized his philosophy for business success:

The first thing is to find a fertile market, find a need out there that you can fulfill at a cost that is less than perceived value, so you can make a little profit of a positive cash flow and have a healthy business.

McGovern stuck to this approach as IDG continued to expand geographically. Eric Hippeau, the former CEO of Huffington Post who spent 14 years at IDG, recalled McGovern’s support after IDG acquired Hippeau’s publishing startup in Brazil in 1975:

He gave me the resources to turn the company, Computerworld do Brasil, into the dominant computer publisher in Brazil. From that base, we developed similar businesses throughout Latin America. We would not have accomplished this if it wasn’t for Pat’s singular business philosophy of entrusting his business units to be self-sufficient and make the necessary on-the-spot decisions. The fact that I was in my mid-20s did not faze him.

Today, IDG’s global media network includes 460 websites, 200 mobile apps and 180 print titles in 97 countries.

Remove barriers to innovation

As Hippeau noted, McGovern’s “think globally” approach was paired with an equally important principle: “act locally.” These two concepts formed the core of IDG’s decentralized approach to publishing, which kept the corporate staff lean and funneled decision-making down to locally managed business units. In the oral history, McGovern explained how this approach evolved:

I started out like most founding entrepreneurs. You want to make sure that everything is done right and being in control of things. So I would want to approve any major new financial commitment. I would want to meet all the key people being hired by the company. [At one point I realized], “Oh my God, I’m slowing the growth of this company rather than accelerating it.”

The first humbling thought that I had was that there were tens of thousands of very successful businesses that never had any advice, or guidance, or suggestions from me at all. I said, “I really can’t be an essential part of business success. Why am I keeping all these people waiting for a decision?

The real bosses should be in the marketplace. You want to get out of their way and let them do it the way they think is right, let them listen to the marketplace and the customers and let that be the guiding force rather than looking over their shoulder and telling them what your opinion is, because you are not the customer. You need to maximize the amount of time they can spend in touch with the market and minimize the time they have to spend in internal communications.

Time’s Harry McCracken, who spent 16 years at IDG, summarized the philosophy in a tribute post:

Pat … funded other people’s ideas and — assuming that an IDG division’s business plan was met — largely stayed out of the way. IDG publications sprouted all over the world, operating with great independence. Rather than aiming for a cookie-cutter approach, brands such as PC World morphed to fit the cultures of different countries.

Decentralization caused its share of speed bumps along the way, notably the mid-2000s (coinciding with my time there) when the company was slow to react to the publishing industry’s print-to-digital shift. The leadership team eventually figured out that centralizing some online operations would create far more efficiencies – and growth opportunities – than having each publication run its respective web properties independently. With a better structure in place, IDG made up lost ground quickly: its U.S. online revenues surpassed print revenues in 2009 and, last year, accounted for 66% of the company’s $3.6 billion in global revenue.

A “let’s try it” attitude remains one of IDG’s 10 corporate values, which are prominently displayed in the company’s Boston headquarters. Lew McCreary, my former boss at IDG, paid tribute on Facebook to McGovern’s approach to innovation and entrepreneurialism:

He built his company with a clear vision, remained true to it, allowed people to add to it, improvise off it, spread it to new audiences. It was great fun to work for someone who took such pleasure in the many ventures that grew from his big idea.

Invest in people to drive personal and business growth

McGovern encouraged a culture based on hiring smart and talented people and providing the training and support to help them grow professionally, which in turn benefited the business. From his oral history:

You have to find someone who’s passionate and inspired by the opportunity to fulfill that [market] need, someone whose passion and energy and enthusiasm attracts others to join them and they can provide leadership to them.

Then you have to support that person the way you would like to be supported in their position. You want to have trust in them and you want to encourage them. You want to celebrate their successes. You want to give them the resources that they ask for.

We believe in always driving to improve in every fashion and every way, continuously. We always wanted to invest in our team through training and education, so their skills were constantly advancing.

Melissa Riofrio, a senior editor with IDG’s PCWorld, credited McGovern with building a strong culture from “two centers”: technology and people:

He believed that high-quality publications started with hiring and training the best people and keeping them as happy as possible. This was a tall order in the hard-charging, high-pressure world of journalism, but Pat persisted.

A personal touch helped reinforce the culture McGovern cultivated. He frequently sent handwritten “good news” notes to staffers for their accomplishments, and hosted champagne dinners to celebrate employees’ 10-year anniversaries. McGovern’s annual trips to IDG offices to personally hand out year-end bonuses to staff members were legendary in tech publishing circles. Sharon Machlis, Computerworld’s online managing editor, shared the impact of these actions:

I used to joke that he was the only billionaire who actually knew me personally. But it wasn’t a joke — despite leading a global corporation with many thousands of employees, he not only knew my name but what I did. And it was the same for pretty much all of us.

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