Ad Sales Blog

Angie, on why Angie’s List publishes a print magazine

Angie Hicks Bowman, co-founder of the home service rating company that carries her name, is one of the smartest marketers I have ever interviewed. She started her company as "Columbus Neighbors," personally going door to door in Columbus, Ohio to sign up members and collect ratings on local contractors. After her first year of door knocking, her company had 1,000 members. Today, that number is over 1.5 million paid members.

When my wife Lynn became an Angie’s List member, a monthly print magazine started showing up at our Brooklyn brownstone. I was intrigued. In a time when many marketers are scaling back print magazine marketing investment to favor digital media, here was a prominent digital content company publishing a print magazine. Retro marketing? Not on your life. In an interview with Angie I found her rationale for using print magazines so rooted in common sense I wondered why no one had thought of explaining it her way before.

When I asked Angie why she is sticking with print magazines she said, “I think people interact with print publications differently than they do with online content. Angie’s List is essentially a problem solving service. When people say, “Oh, I need a plumber” they come to us. But our print magazine allows us to interact with members when they are not in need of a plumber.” Angie added that her magazine helps differentiate her company in the crowded online market: “It’s one of the neat differentiators about us. We are not only collecting all of this content but actually packaging it into this kind of “news you can use format.”

In addition, Angie said her print magazine helps drive incremental activity by educating members: “Maybe someone had not thought about buying a geo thermal heating and cooling system, but read an article about it in Angie’s List magazine. That person may not have gone on our website to read the article but read it in our magazine, and it created incremental interest.” The magazine also serves as a way to introduce new members, said Angie. “Angie’s List members are busy people, and getting the magazine delivered to them can be a very easy, great way to kind of break in.” She continues, “I get tons of e-mails but on Saturday I might sit down to read a magazine at home, where I don’t want to be sitting in front of my computer. Our members are very passionate about our magazine and a lot of consumers leave it sitting out on their coffee table.” And members love the magazine. Angie recalls, “I remember getting a call from a member who had a hospital stay during which her daughter came in, cleaned her house, and threw away her Angie’s List magazine collection. She was so upset she called and asked if we could send her a whole new set.”

For those of us marketing print products in an ever more digital world, for my money, Angie’s best wisdom came when she described how magazines keep her customers engaged even “when they are not in need of a plumber.” As more marketers abandon print budgets to fund digital initiatives, her comment reminds us of print’s unique marketing value, which is not easily duplicated online. When a print magazine arrives in a home or office it can be read in any physical location, and does not compete for online time with other websites.

In addition, website content is often “purpose driven” -- designed for users to choose their own sequence of information as they search for content and solutions to problems. The magazine experience is different, because an editor selects the sequence of content within an area of interest. The magazine read may offer fewer content options, but sometimes it’s really nice to have someone who really knows the neighborhood be the tour guide. Like many websites, Angie’s List is a problem solving service, so a print magazine is the perfect complement.

Need a book? Go to Amazon.com. The latest political news? Politio.com. Tech news? Mashable.com etc. But what about when you do not need a book, political news, tech news, or a plumber? Maybe you are sitting on your couch just reading a magazine, maybe the one published by Angie’s List.

PS: Watch a video produced by American Business Media on our initiative to help publishers sell more print adverising by selling the value of 3rd party media HERE

For publishers, digital dollars are about data not eyeballs

 Are you swapping analogue dollars for digital dimes? 

If you follow the traditional publishing business model in an ever more the digital world it is inevitable. The traditional magazine business model is based on creating content to attract eyeballs, and then to sell exposure (advertising) to them. This basic plan has kept magazine publishers profitable for over a hundred years. But this model faces harsh challenges in today's digital media world.  The problem is a far more efficient way to deliver eyeballs online, called "search." Every marketer knows that they can get far more eyeballs and clicks per dollar for their website buying “search” instead of digital media from traditional publishers. Why every publisher does not know this is a mystery to me. 
 
To understand the problem let's look a look at a rough example with the math:

Say you publish a magazine that charges $6,000 for a page of print advertising which gets $1,000 for a banner on it's website. What if running either a print or newsletter ad gains exposure to many eyeballs and results in 75 click thoughs to an advertiser’s website. Depending on the expense of appropriate keywords, a click through generated by Google, or another search engine, could cost as little as 20 cents or as much as $5. So, Google would charge between $15 to $375 for the same number of clicks you are asking advertisers to pay $1,000 or $5,000 for. Argue all you want about the quality of your clicks. With this big of a price difference it is going to be hard to make it stick. 
 
If you don’t think the online advertisers in your niche are impressed by this math,

IAB online ad revenue for 2011 shows the continued growth of search

think again. According to Interactive Advertising Bureau (IAB) almost half of all online ad dollars (46.5%) now go to search. A recent analysis of where Google gets its ad dollars shows penetration into niches traditionally held by publishers.       
 
 
 But there is a better way to compete. The core strength of digital media is not in its ability to deliver exposure to eyeballs, but in its ability to deliver interactive experiences. Why sell one way communication (eyeballs) for what is a fundamentally an interactive medium? With this in mind, a new model for publishers is emerging:
 
Use content to build data on potential customers. Use that data to build sponsorable interactive customer experiences.
 
In this contenxt, a piece of data is either the location of an individual (address, phone number, name, company name, e-mail address, zip code, etc.) or information about the individual that explains his or her behavior (buying intentions, current products owned, income, demographics, sex, ethnicity, political orientation, type of car owned, etc.).   
 
What can you do with this kind of data? Let’s look at a that rough magazine example where they are charging $5,000 for print ads and $1,000 for web banners. With the right data, what else could they  sell?          
 
Create targeted sponsored webinars.
Cost of sponsorship $7,500 to $15,000
 
Create live sponsored events. Cost
of live event sponsorships, $5,000 to $15,000
 
Create market research to sell.
Cost of market research, $2,000 to $15,000
 
Create market consulting opportunities.
$7,000 and up
 
Create highly focused direct
marketing based on opt in lists (e-blasts) $2,000 to $4,000
 
These are not digital dimes.

 

Download my white paper on how publishers can profit in a multi-screen world sponsored by Sheridan Press 

 

To monetize podcasts think sponsorships not ads

A study released earlier this year advocates sponsorships over advertising as the best way to monetize podcasts. The Association for Downloadable Media along with Edison Research report that podcast listeners HATE radio style ads but relate much better to "this content is brought to you by" sponsorships. The study says that it helps if the podcast host makes the sponsorship announcement. For content publishers here are the two key charts: 

First: when podcast listeners were asked about traditional radio style ads their response was negative with 62% saying they "generally dislike" them.   
But when the same audience was asked about sponsorship plugs instead 67% responded they "Don't mind them and occasionally find them useful." 
Sponsorships seems the way to gain exposure for advertisers without without turning off listeners.

There were other findings as well. According to Edison Research Vice President Tom Webster, “A podcast advertising buy is not a redundant media buy for advertisers and marketers. These are attractive, affluent consumers that mass media is losing.” He also notes, “Ninety percent of these respondents indicated that they had taken some kind of action as a result of podcast advertising or sponsorship, and over 40% reported purchasing behaviors, which indicates that they are receptive to the right message, in the right context.”

More findings include:  

1. Active Podcast consumers are mobile media consumers - and content creators and advertisers alike should continue to take advantage of that fact

2. Active podcast consumers are not receptive to interrupt advertising, but they are receptive to targeted messages in podcasts

3. There is a "halo" effect ascribed to brands, products and services that sponsor podcasts

Download a PDF of all the ADM Edison Study findings 

Watch an hour long Vimeo video where Edison Research presents the findings:

 

One in three TV viewers becomes an "On Demander" bypassing traditional viewing

How much traditional TV are people watching? Media Research firm Say Media reports that one out of three people in the US has given up watching live TV for Internet TV and time-shifted video.

Consumers are spending less time with live television and more time with online content as well as time-and-device-shifted premium video content. This group is young, educated and affluent – and are increasingly difficult for marketers to reach through traditional broadcast media.

The researchers identify two groups among those giving up on live TV:

"On Demanders"

• -Watch less live TV than a year ago and more     streamed video content
  -Are young, educated, affluent
  Own 5.4 devices for streaming video
  -Consume 30 hours of video content weekly
  -Are least receptive to TV, online and mobile ads

"Opt Outs"

-Do not watch live TV
Are younger (30% are 18-24), live in urban areas
-Get their video content time and device shifted
-Own 3.9 devices for streaming video
-Are most receptive to mobile and online ads

Most people I know are viewing more online and mobile video, which really did not exist just a few years ago, but the results of this study seem a little extreme. I'm a little suspect of the results...

Say Media, previously Videoegg, is a rich media advertising network that delivering over 100 million uniques in 400 leading video, gaming and social network sites and applications. Clearly they have lot invested in our believing that video TV viewing has moved on to new media platforms.

According to the methodology, findings are based "a passive behavioral analysis via comScore's opt-in panel, of 1,159 Internet users" as well as eight interviews with "Off-the-Grid households" in Chicago and San Francisco." 

While a comScore panel is highly credible source, I believe that someone opting onto one of thier research panels is going to be more advanced in their media consumption that the average user. 

For that reason I'm suspect of the claim that a third of all TV viewers are "off the grid" of traditionl  TV viewing. 

But another findings might be more important that the overall numbers for media sales issues: the qualitative aespects the viewers. Even if comScores panels have more new media enthusiasts than an average sample of Americans, the groups with the panel will likey still maintain their characteristics. 

For me this finding is the most important:

 

Media buyers and sellers take note. Some of the most important TV demograpics are slipping away from traditional TV viewership.  

 

Read more findings from the study at Marketing Profs 

 

The Newspaper extinction timeline

Whether you agree or not with the premise of this timeline, the very fact that someone has assembled one should give all in the print media world alarm. The charts creators do not seem like bomb throwing heretics. They calmly explain,

"This schedule for newspaper extinction shows best estimates given current trends. The timeline is intended to highlight the diversity of global media markets and stimulate useful strategic conversations.

Newspapers in their current form becoming insignificant is not the same as the death of news-on-paper, which will continue in a variety of forms. Ways that newspaper publishers of today will succeed in the transition beyond newspapers in their current form” include transitioning to other channels, providing personalized news-on-paper, and tapping niche markets."

Sounds sane enough. Best advice to newspaper people? Change with the times or move to Argentina, where print newspapers are forecast to exist until until 2039.  

Download the whole chart and study

 

Are you in the content delivery business?

  Many print publishing companies are failing  in their transition to digital by giving the wrong answer to the question, "What business are you in?"

  In Theodore Levitt's classic marketing essay, "Marketing Myopia" he describes how the once mighty railroads went bankrupt by failing to understand they were in the transportation business, not the railroad business. Many publishers are making the same mistake, thinking they are in the content delivery business when they are actually now in the customer engagement business.

Like the railroads, many publishers are failing to see how much new technology can transform an industry.

The Internet makes content a commodity. Think that great celebrity interview in your June issue is so unique? Type her name into Goggle followed by the word "interview" and see ten other interviews your readers can instantly access. But your ability to use content to engage and service readers has never been more valuable. The internet may commoditize content, but is also creates a need for knowledgeable guidance though the vast, conflicting, un-moderated content chaos that is the Internet.        

Also, digital media does not just "transmit" content like print media does, digital media transforms it. When content is delivered through digital social media channels the content added by readers can be more important than content generated by editors. How many readers link to an article can have a profound effect on search engines ranking which can make or break the life of a piece of content. Publishers who think their "transition to digital" is about swapping analog transport for digital ignores the importance of interactive reader participation. This came out loud and clear in the recent study, "The Case for Advertising in Interactive Digital Magazines" as it documented the core reason marketers advertise in digital magazines is to deliver an interactive brand experience to readers. When value comes from interactivity it is not hard to see why straight digital replicas of print magazines have less value to advertisers.

 It is important to anticipate that digital content will be aggregated, redistributed, rated, commented on, ranked by Goggle, re-purposed, trashed, praised, and ignored as part of the process. All this is very healthily, adds value to the content you create, and is the key to your ability to monetize it. Why? Because it shows that the mere content that you pump out is driving the creation of an online community. If you can show a lot of interactivity between your community members, the value increases. Again, online, most content is a commodity, but when you use it to build a community, you create something of unique value that you can charge for.   

For publishers, the transition from analog to digital can be painful, unfair, and frustrating. At the heart of a successful transition to digital is a reinvention of the business model. Magazine publishers are often initially surprised by  the tiny revenue their digital media generates as they swap $10K print pages for $1K newsletter banners. But those newsletters, operating within a community as data gatherers, can return big profits when leveraged properly. Subscriptions for magazines and newsletters are harder to charge for when they go digital, but free subscriptions operating as content development centers, can be leveraged to create other reader experiences that can be monetized. 

The key to figuring all this out starts with answering the simple question, "What business are you in?" Online, most content is a commodity. If you still think you are in the content business...please, think again.   

 

Profit on the web is about audience not traffic

At the recent Digital Magazine Symposium, Gordon Borell astonished the audience by blowing up the notion that building that largest base of online readers is the key to ad revenue. 

   After surveying the financial results from thousands of local media Web operations for the past eight years Borrell concludes there is no direct correlation between large amounts of traffic and large amounts of money.

For example, Borrell tracked a wedding Web site in one of the top media ten media markets making nearly as much money in Internet advertising (in millions of dollars) as the #1 ranked TV station website in that market. The TV site gets about 600,000 unique visitors per month, the wedding site gets about 60,000, or 1/10th of that traffic. How can this happen?

Borrell says that online, the best advertising is content. There was a time before the Internet (my kids are shocked at this statement) when the top way consumers learned about products was through advertising. But the Internet has become a far more efficient educator. Many of the most profitable websites make money because their content functions like advertising did years ago, as a customer educator for product sales. According to Borrell, visitors of these sites are “leaning forward” to read the content while probably ignoring the banner ads. 

Some print publishers are still trying to win the print circulation/CPM battles online. But that battle is over. They lost. Online, search, which now accounts for over half of all online advertising dollars spent, has won. A media buyer can always buy more clicks per dollar buying search. 

While the online CPM battle is lost, the war for publisher profit can be won. Borrell shows us how with an example: “Compare radio, a $15 billion media segment, with the yellow pages, a $9.8 billion segment. About twice as many people listen to radio compared with those who use the printed yellow pages. So those ad dollars seem just a little out of whack, right?  Now consider this:  For radio, average weekly time spent listening is about 20 hours.  For the yellow pages, it’s about a minute.  An industry that reaches less than half the audience of radio and gets about 60 seconds of quality time with them every week – compared with radio’s 20 hours a week – can still attract about 65% of the ad dollars as radio?  That’s because the yellow pages, like the Internet, are a lean-forward medium where people see the advertising because the advertising is the content."

At the Digital Magazine Symposium, when Borrell laid this out, everyone in the audience was taking furious notes.

To further support Borrell's points, the chart below illustrates the dollar value of a unique visitor at some of the best known websites. To estimate these numbers, Silicon Alley Insider took the full year revenue for 2009 for each of the companies below and divided them by the number of their average monthly worldwide unique visitors.

As per Borrell, the more "wallet ready" the unique visitor is, the more dollars generated. Search gets the most per visitor, then display, and then social. 

Google's uniques (search) are the most valuable: $18 of revenue per monthly unique per year. Facebook's uniques, meanwhile (social networking) are worth a paltry $3.50. Twitter's uniques are worth almost nothing.

Understanding this, publishers, even small ones, can compete. For example, check out HD Camera Guide which attracts  a relatively small but valuable "wallet ready" audience.

If you had seen the "media correction" of 2009 coming what would it have looked like?

If you were in media sales for print media,television, or radio 2009 was a miserable year. What would it have looked like if you could have predicted it? It might have looked like the following blog post. Based on events that had just happened in the financial industry my June 22, 2007 blog post, describes the "inevitable correction" that ad based media will be going through. It looks like the end of 2009 to me! 

Here's the post:   

A recent "follow the money" analysis of the advertising industry by Dow Jones' "MarketWatch" should serve as a shrill wake up call to anyone in the ad sales business who thinks that online products will not be the biggest part of their portfolio in the future. I also see this article as a great sales tool to show any advertiser who feels the same.

The article looks at the recent spate of acquisitions among online ad giants with eye popping billion (with a "B") dollar signs; Google buys DoubleClick for $3.1 billion, Microsoft buys aQuantive--for $6 billion, etc. MarketWatch concludes, they make perfect sense because of the "inevitable correction" coming to the ad industry as a whole.

MarketWatch lays out the case:
"Last year, U.S. consumers spent nearly a third of their total media-consumption time engaged with online or interactive media, a dramatic increase from just two or three years ago. At the same time, Fortune 500 companies allocated only 6 percent of their marketing budgets to online media in 2006, up from 5 percent in 2005...they're spending ever more money where, increasingly, consumers aren't."

The prediction:
"The inevitable correction is upon us. That's why online adverting in the U.S. market is growing seven times faster than other advertising media: Online was up 35% year over year, while the overall ad market grew only 4 percent. Whether dollar allocation percentages ever match consumer usage numbers is academic; it's clear that the gap between consumer behavior and corporate marketing budgets must close."

If it's anxiety producing to hear financial types apply the word "correction" to the industry where you currently earn a living, take heart. Now that you know what is "inevitable" you can take advantage.

Read the full article on MarketWatch

UK follows Denmark as second country where Internet ad revenue overtakes TV

In the US where television advertising still commands the largest share of ad dollars what has happened in the UK is unthinkable; Internet advertising revenue has surpassed TV ad revenue for the first time. From a recent report in the The Guardian newspaper: 

 The UK has become the first major economy where advertisers spend more on internet advertising than on television advertising, with a record £1.75bn online spend in the first six months of the year.

UK advertisers spent £1.75bn on internet advertising in the six months to the end of June, a 4.6% year-on-year increase, according to a report by the Internet Advertising Bureau and PricewaterhouseCoopers. To put this in perspective, in 1998, when the IAB first measured internet advertising, just £19.4m was spent online.

The internet now accounts for 23.5% of all advertising money spent in the UK, while TV ad spend accounts for 21.9% of marketing budgets.

The IAB's figures show that of the total of £1.75bn spent on internet advertising, £1.05bn, or 60%, was spent on search advertising on websites including Google, up 6.8% year on year.

The UK is not the first country where internet ad spend has overtaken TV spend, Denmark reached the milestone about six months ago. But it is the first major economy to do so.

How soon do you think this will happen in the US? 

Read the entire article in the Guardian 

Media planning contorted by social media

if you want ot sell media these days you need to understand the effect social media is having on the minds of the media buyer. This amazing slide show by Hike Hess, VP of Research at Carat, lays out just how the move to social media is blowing many media buying conventions.Packed with lots of great stats Hess shows us the way:

Ama Social Media Pres100109

View more presentations from garystein.