Writing the new formula for success

While paid-for apps remain a key focus, innovative ways to advertise in print, combined with digital platforms, mean that many publishers are offering marketers a fresh mix of communication opportunities.

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Free newspapers and magazines are hoping to offer advertisers more innovative methods using digital platforms, with advertising in newspapers set to grow in 2012.

QR codes, scratch and sniff scented ads and new types of cover wraps are all set to become more popular this year, contributing to the regional growth that the Advertising Association predicts by Q3 of this year.

This is good news, says Paul Sinker at the Newspaper Society, given the decline in free regional papers. “The majority of closures in regional press have been free weekly papers. Most of these were marginal titles occupying second or third position in their local markets. But despite this, there have been launches of free and paid-for titles. Surrey-based Tindle Newspapers has launched 11 titles recently.”

Cover wrapping has become more popular, not only with national newspapers but also regional newspapers. Translucent wraps are being adopted by the Johnston Press, with its Wakefield Express being one of the first to adopt these pages to highlight the advertising message in a catchy way.

These allow the advertising to work more closely with the editorial – in the case of the Wakefield Express, the unveiling of a new Asda store is the commercial message that doesn’t interfere with the front page story.

Mobile marketing and advertising technology is also being adopted by many news outlets, including SMS applications for competitions, paid promotions and alerts that are all proving popular for consumers.

Meanwhile, popular London ‘freemium’ newspapers and magazines, which are free but do not look cheap, such as City AM, Evening Standard, Shortlist and Stylist are surviving the economic downturn, not by adopting the latest technology but through old-school styles of advertising and street distribution.
So rather than rushing to launch a costly iPad app, these free sheets are focusing on increasing their advertising revenue, according to City AM’s managing director Lawson Muncaster.

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“We haven’t launched the app yet. Technology is changing so quickly that when you work on something new, you come back and things have moved on,” says Muncaster. At present City AM’s app is a work in progress (see Q&A, below).

Similarly, at Shortlist Media, which produces women’s weekly Stylist and men’s counterpart Shortlist, apps are not the priority. Shortlist Media founder Mike Soutar says that as his revenue comes totally from advertising within his free magazines, paid-for apps are not appropriate yet. “I think that the early business models that do that kind of thing [adopt iPad apps] are ones that tend to rely on consumers to pay for the services. But it is inevitable – everyone knows the world is becoming more mobile and a more interactive place in terms of mobility.”

While Soutar has invested in digital platforms and provides a variety of ways for people to advertise, he says the business model for free apps is not yet formed.
“We are yet to see a sustainable business model [for apps] which is free to consumers, is really high quality and funded through advertising. I want to be a little cautious about launching wholesale into those things.”

He adds: “The majority – about 70% – of our revenue still comes from display advertising and the other 30% comes from a mixture of sponsorship, advertorial and creative solutions. “We employ 850 hand merchandisers up and down the UK every week so we also have the ability to distribute sample products, so we can offer really integrated activity to marketers.”

Online, Shortlist.com and Stylist.co.uk have grown quickly and, in the past 12 months, the team has grown from two to 20. Soutar says he is working on initiatives that are likely to include mobile, but not until later this year.

However, the Financial Times predicts further digital integration in terms of advertising this year: “We are seeing rapid growth in our digital subscriptions. Our research shows that readers who see an ad on more than one channel are much more likely to be engaged with the brand than those who see it once. More advertisers are asking for mobile elements in their campaigns,” says Ben Hughes, global commercial director and deputy chief executive at the FT.

Online advertising is also seeing a rapid change and demand for new ways to advertise. The simple banner demonstrating what brands have on offer on a news platform is becoming a more interactive experience.

33m – the number of readers of local newspapers weekly

For example, AOL advertising has launched a display advertising format dubbed ‘Project Devil’ online. The new format is divided into panels and includes media streams such as video, slideshows, 3-D rotation, quizzes and links to social media. The idea is to make advertising online more interactive, attractive and fun.

“The ads themselves should be as engaging as the content on the page that the consumer has chosen to view. We also believe Project Devil marks the largest single change in online ad formats in 15 years,” says Noel Penzer, vice-president of International Huffington Post Media Group at AOL.

42m – number of unique users of local press websites per month

Paps Shaikh, commercial director UK at digital publisher SAY Media believes that as consumers’ media habits change, they are procuring more information and knowledge from digital sources than traditional media.

“This means print publishers need to get to these audiences through their online advertising. The challenge is to get people’s attention in digital spaces for long enough to communicate the required marketing message, and this means changing the way most online advertising is currently structured,” says Shaikh.

By targeting consumers across digital environments, then getting them to engage with an experience, which is presented through an “ad unit”, brands stand a much better chance of getting a consumer to actually click on those ads, he claims.

However Shaikh adds the key to success is simple. “Make the ads look stunning and also provide a reason for the consumer to spend time with the ad. In doing this, brands can showcase video content and sample stories, build in games that provide consumers with a few minutes of light relief, activate social media campaigns and include calls to action in the form of voucher coupons.”

While this year will be a tough one for many brands, a new mix of ad formats may help marketers get their messages across.

Case study

Shortlist media

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The digital arm of magazine Shortlist.com has around 600,000 to 650,000 unique users each month and Stylist.co.uk – started a year after Shortlist – has about 450,000 unique users a month.

“There was a declining general interest in men’s magazines – a market into which we launched Shortlist, something that could reach a high number of men using a high-quality editorial environment,” says Mike Soutar, founder of Shortlist Media.

“When we say ‘freemium’, we mean free but not cheap. Five years ago when we were first conceiving our business, we were fascinated by the power of free in terms of what that was doing to consumer behaviour.

“We were looking at people in their 20s and 30s who had grown up with the web and who had an expectation that they could view high-quality entertainment and content.”

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Stylist’s digital offshoot Emerald Street

So the free model was born, targeting commuters in cities and reaching those with money to spend – who, traditionally, were hard for advertisers to reach, says Soutar.

Data is also a focus for Shortlist Media. Soutar says registered users provide their home postcodes when surfing online. “You can learn a huge amount about your audience, and you can start to see how they react and respond to different things, what they like, what they are engaged with and what they respond to. As a consequence, we are building a rich relationship with our audience.”

Stylist’s digital offshoot Emerald Street was launched last year and now has 70,000 registered users, up from a target of 60,000. Readers get a daily email alert, a “stylish oasis in a busy working day,” according to Soutar.

While he won’t confirm what the plans are in terms of launching apps, he does state/ “We will continue to develop and launch new things so I see no let-up in our appetite and ambition to launch new technology.”

Q&A

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Lawson Muncaster
Managing director
City AM

Marketing Week (MW): How are you using apps?

Lawson Muncaster (LM): City AM will be launching a paid-for iPad app this year. It’s amazing to see how quickly technology moves on, having worked at getting it right over the past 12 months.

We have to be very careful in the technology we choose, as it could be costly if we use the wrong sort and you then waste a lot of money.

It’s very important for City AM to get the app right, as it gives us an opportunity to speak to a global audience, giving them content at the touch of a button. I can see in the future City AM being the content provider for a lot of people in the business community at a global level.

I think technology will give the paper the opportunity to develop and increase that audience but I feel it’s essential to have a real paper as the soul of the business.

MW: Can you explain why the app will be charged for, but the paper remains free?

LM: The dramatic effect of the internet where people are downloading information in short bites is a lesson newspapers must learn from.

To engage with City AM’s content, therefore, we will be charging for the availability rather than the content. If you don’t happen to live in our geographical area we are going to get that content to you, and it happens to be online and from the same source.

But let us make no mistake – if the content is not good enough, people will not pay for it. If the newspaper was not good enough, our audience would not pick it up.

City AM has chosen to deliver its content as a free newspaper. It is a business model where we take the responsibility of giving the reader the opportunity to be able to pick up the paper on the way to work.

MW: How are you using QR codes and other technology?

LM: We tried using barcodes in 2008 and while we had 1,000 downloads, the penetration of the actual software into phones was far too low. It relied on consumers to download the software to be able to read the barcodes. So we felt it was the wrong time to continue with that.

Due to technology moving so quickly, some of it becomes obsolete within a short period. For example, we see a move towards new applications like Blippar through the iPad, that allows a smartphone camera to recognise an image within the advert, taking the reader straight through to links – notably, print is still the driver of this.

MW: How is City AM doing in a tough market?

LM: Around 90% of our revenue comes from display advertising. The last 10% is from other revenue streams including syndication of content, events, seminars and online revenues. In 2011, revenues grew by £1m.

What we try to do is not just look at news and how we break it, but at the London market place. We look at the people behind the deals and their lifestyles.

I think the conversation about free and paid-for media is complete poppycock and is something only newspapers seem to get involved in. Take TV for example; CNN has been free for years. The challenge for City AM now is how consumers have changed their lifestyles considerably and how we position our products into these lifestyles.

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