2013 Fall Sales Newsletter Fall Newsletter : Page 13

Many publishers are using a “free with subscriber information” model, which allows total free access in exchange for information than can be used for targeted marketing and e-commerce, list rentals, or other data-based initiatives. Digital editions, apps and mobile-optimized websites have opened up the market further, with the ability to offer subscriptions across platforms or upsell customers from one format to another. It also provides the opportunity to incorporate in-app purchases and e-commerce. Advertisers, too, appreciate the increased exposure and multimedia capabilities such as video enabled by mobile platforms. Not all advertisers and agencies have taken full advantage of this, however. Even as audiences become increasingly accustomed to paying for content on mobile, increasing ad revenue has remained a challenge. The growth of “native” advertising (advertorial content mixed in with editorial offerings, usually chosen for context and relevancy) has also become an important, albeit controversial strategy for many publishers. One recent example of a mobile native ad strategy is the integration of sponsored Twitter channels from companies like Delta Airlines on the Flipboard news aggregator app. Ads were integrated with a call to action inviting readers to read more about a particular topic—one with which the sponsoring company wishes to be associated. Many publishers are distressed about the decline in print overall, and in the decline in print ad pages. Historically, much of this loss is attributed to the rise of free web content, and the demographic shift away from print. Attempts to recoup lost print revenue on the web have been discouraging, due in part to the unpopularity of web paywalls, and the decline in perceived value of traditional web ad metrics like impressions and CPM. Mobile apps potentially address this decline by providing a “walled garden” means of delivering content. Other financial benefits include the cost savings in printing and distribution related to the decrease or elimination of print editions, as well as the streamlining of back-office workflows, the ability to “upsell” or transition print subscribers. In addition, digital/mobile apps also facilitate the acquisition of new (often younger) readers who may not have sought out a product distributed solely via print. Hearst Editorial Director Ellen Levine recently told Bloomberg News that digital subscriptions “are not stealing from our print business,” and that most digital purchasers are new to the brand. As the market matures for mobile and cross-platform publishing solutions, innovative technology providers are working with media companies to design and implement the best mix of free, ad-supported, and subscription platforms. Over time, this will help digital companies grow, and ease the transition for legacy print publishers. PAGE 13 Going Mobile: Revenue Opportunities for Publishers

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