Can Digital Editions Be Sexy?
If there's any overall message in the recent data about the iPad, it's this: It's tough to overstate the impact of the tablet.
Consider what Josh Quittner, then-director of editorial development at Time Inc., had to report at the Woodwing Xperience conference in Amsterdam in May. Just less than a year since its release, Apple had sold 15 million iPads, amounting to $9.5 billion in revenue from the device. Analysts predict 50.4 million devices will be shipped by 2012.
Since the iPad was introduced, Time Inc. has conducted one-on-one and focus group research, in-app surveys and owner studies through the Time Inc. Innovation Panel—an online research community for tech-savvy users of Time Inc. products. According to Quittner, in a March 2011 company survey, the iPad beat television among all respondents asked to rank the most important devices they own. (This is driven by women, who rank the iPad above computers and television, second only to smartphones in importance. Men still rank the tablet behind the other three). It is used mostly at home for personal business (74 percent of the time) and shared with others in the household. It's even used while watching TV.
Tablets, in other words, appear to be fulfilling their promise as a "lean-back" consumption device, a way to engage with content enjoyed casually, the way people have always interacted with books and magazines.
Such massive success has, of course, been a boon for Apple's iTunes store, which, according to AppleInsider.com, generated $1.4 billion in revenue in the first three months of the year. App Store downloads reached 15 billion, Apple announced in July—a month after the company publicly reported 14 billion downloads. The Android market's growth is nothing to sneeze at either, a Guardian article reports, with 1 million apps downloaded in 60 days.
What does all this mean for digital editions and apps providers? While Woodwing does not track reading behaviors (leaving this to individual publishers), it does track downloads. According to company spokesperson Stefan Horst, more than 1 million digital issues are downloaded via Woodwing's content delivery system (CDS) a month—or one issue every two seconds.
"Digital edition adoption is as strong as ever," notes Ben Edwards, marketing manager of digital magazine software provider PageSuite. "We've grown 25 percent this year, which is testimony to our clients' ROI."
Digital Editions' 'Lean-Back' Nature
In fact, ask most digital editions solutions providers and they'll tell you the iPad and quickly growing popularity of tablets has had a positive impact on their businesses. As tablets seem to be filling a space in the market as "lean-back" consumption devices, digital editions seem to fit comfortably into the tablets' "lean-back" mold.
The negative side of that, suggests Marcus Grimm, marketing director at digital publishing service provider Nxtbook Media, is that "most digital editions have fewer visitors than websites. Unlike a website, where people are comfortable reading a page and leaving, visitors to digital editions inherently recognize the longer-form content and are less apt to go into it unless they're willing to spend the time. That's the bad news," he says.
The good news? "Those readers who decide to go into a digital edition are willing to make the time investment, thus engagement time compared to corresponding websites is much greater," Grimm notes. "Visits of 20 minutes or more are not uncommon, and the average visitor tends to stay about five times longer than [a visitor] to your website. The digital edition acts as the perfect product for your most fervent fans."
Not surprisingly, suggests Grimm, "the more engaged a reader, the more likely they are to click-through advertisements. Most publishers report a four to six [times] greater click-through rate (CTR) than what they experience on their website."
The importance of this, he stresses, is that "few publishers sell off of CTR these days, but rather on CPM [cost per thousand]. ● If we look at the fact that digital editions tend to have fewer views, selling based on CPM means you're drastically undervaluing a product with a much greater CTR."
What About Open Rates?
The main motivation publishers have for launching digital or mobile products "is still a 'value-added to print' mind-set," says Edwards, "which is probably appropriate for most in the first couple of years, because you have to transition your customers from print to digital and mobile, and try and offer as many options as possible."
The second most popular reason "is the growing [number of] publishers who see it as a way to cut print and distribution costs," he notes, and "third is to add interactivity and engagement to customers' experience. Fourth is because they view digital and mobile as a brand new, non-cannibalizing revenue stream, [and] fifth is to monetize the Web (or mobile Web) for the first time. Sixth," says Edwards, "is competitive advantage."
A question that comes to mind for most publishers when talking about digital editions and the opportunities for them moving forward, regardless of their launch motivation, is: What kind of open rates are we seeing with them? What data exists proves this a hard factor to generalize, notes David Renard, a partner at research firm mediaIDEAS. "Having seen many publishers' data, I have seen wide ranges from single-digit open rates on digital magazine announcement e-mails to more than 30 percent with a corresponding dramatic change in actual people reading the magazine—from .001 percent to 15 percent. …" he says.
A 16-percent open rate on digital edition e-mail announcements seems to be accepted as the industry average, though factual data and current reports are hard to come by. Still, most publishers Publishing Executive has spoken with fall somewhere around that 16 percent (with a few definite variants from that number), and most publishers seem to be quite ecstatic with open rates of 20-plus percent.
With print publications having an average newsstand sell-through rate of around 30 percent, give or take a few percentage points, where does that leave digital editions? (Especially when the 16-percent average applies only to the open rate for the e-mail announcement, and not even to those who opened the digital edition.) And consider that browsers at the newsstand who page through print editions and even read articles, but just don't buy the issue, aren't counted in newsstand sell-through, but they would be counted in digital edition click-throughs.
● Some industry experts suggest that the digital edition e-mail open rate of a particular publisher should take into account that publisher's average e-mail open rates. If a publishers' e-mail open rates, in general, are low (current reports put the industry average e-mail open rate at about 23 percent), then expectations for high open rates for e-mails announcing new digital editions are unrealistic, as are high open rates for the digital editions themselves. (Needless to say, the reason for the low e-mail open rates should be examined.)
Publishers, of course, can drill down for individual publications based on more specific measurements.
Texterity products, along with some others on the market, to varying degrees, now feature code allowing for real-time tracking of digital editions usage. "This system is so smart that it can tell when a digital edition (mobile edition) is being read on a mobile device and will identify what kind of device it is," Jill Baker, Texterity's director of marketing, notes on Texterity's blog. Reader behavior tracking can include ads clicked, pages read, shared or printed, and videos watched, with data reports automatically provided to a fulfillment firm and the ability to sell leads or customize content to target audience segments.
Such capabilities allow publishers to "be more accountable with regard to the effectiveness of the ads they run," Baker comments. "[There is] much less reliance on audit numbers to set rates and prove value."
● "For app advertisers," notes Baker, "publishers can also more easily 'go in' and help them change messaging if their banner ad tracking shows the ad isn't working."
According to a recent article on PaidContent.org, Condé Nast also is focusing on the importance of metrics to share with its advertising clients. "Condé Nast and its digital magazine partner Adobe offered a unspecified group of 'key advertisers" a look at some new metrics designed by the software company's analytics unit, Omniture, that promises to show levels of distribution, audience exposure and engagement."
Earlier this year, Condé Nast announced that it was scaling back on mobile apps for smartphones, and instead would focus more on products for tablets. "Condé Nast, which was one of the earliest publishers to try magazines for the iPhone, has since abandoned the small screen for its replicas and has created tablet apps editions of Wired, GQ, Vanity Fair, The New Yorker, Glamour, Golf Digest, Self and Allure," reported PaidContent.org. "… The goal of this metrics project is to prove that the scale is there, and even if it still is a long way from the kind of audience numbers that print has, the tablet versions can offer an array of other touch points that ink and paper can't match."
Among the metrics that Condé Nast and its partner Adobe aim to examine are: "total ad readers (the number of people who have looked at an ad in a magazine app at least once) and total number of exposures per ad (how many times a digital ad was seen)," according to PaidContent.org.
"The current reporting standard of distribution for digital magazines and newsletters is net deliveries," states a report released in July by the BPA, called "BPA Worldwide Audience Metrics for Multiple Media Channels." "As distribution is tied to an e-mail address, the presumption is that there is a one-to-one relationship with an individual. Again, this is not a perfect correlation since an individual may have more than one e-mail address to receive materials. Further, there is no way to account for pass along," the report states.
"There is increasing demand for digital content metrics beyond delivery with open rate, frequency of access and duration to name a few. Technologies exist to reliably track these metrics and there is a clear audit trail for verification purposes," BPA notes in the report. "As there are no generally accepted industry averages for these three metrics, media owners are hesitant to report them for fear of being outside the norm. While BPA reports do include digital magazines and newsletters as net delivered copies, the option is there to report these additional metrics as well as others."
Overall, though, boosting open rates for e-mail notifications about digital editions, as well as opens of the digital magazines themselves, are top priority for many audience development folks and ad salespeople looking to sell advertising in digital publications.
● Heeding the basic best practices for increasing e-mail open rates (e.g., testing subject lines, keeping subject lines short, avoiding spam-alerting copy, telling the reader "what's in it for them") can help gain some advantage for your e-newsletters announcing your digital editions.
● Once the e-mail is opened, the same tactics apply: Try different approaches to the e-mail copy telling the reader about the current issue. Some publishers say including an image of the magazine cover makes a big difference in opens. Others say they put more stock in enticing headlines and teasers for stories for luring readers to click through to specific stories. Some publishers take a personal approach, including a letter from the editor to tell potential readers why they should click through to the issue.
● As for an overall approach to attracting audiences to your digital products, "Think of 'push and pull,'" suggests Jessica Aslanian, director of sales and marketing for digital content solutions provider BlueToad Inc. The 'push,' she says, includes pushing content in front of readers, such as, "including in the e-mail [alert about the new digital edition's availability] links to individual articles of interest to get them to open the digital edition." (Caution: Some advise against including too many links in a digital-edition alert e-mail to avoid your e-mails being caught in spam filters.)
● In addition, she suggests, "Resend e-mails to unopens, but change the e-mail subject to get their attention." ● Another helpful hint, "Send initial e-mails at approximately the same time/day of the week so readers see a pattern," Aslanian says.
For apps, Aslanian says, "Use 'push' notifications to alert readers there is new content. Send e-mails to alert them to open the app and login."
● As for the "pull" part of the "push and pull" strategy, "Use Web, Facebook and Twitter to share articles and links to your digital edition to get [i.e., pull] people into the issue," she says.
● Then, she suggests, use the digital edition to pull people to your website in the same way: "From the issue itself, include links to interactive pages on your site to create that relationship with your site in addition to the digital edition."
● Taking advantage of the capabilities of digital editions can help audience engagement once they've opened the digital edition. Videos, animation, sound, photo galleries, links for related information, etc., all can help pique a reader's interest—make it sexier—according to some experts. For advertising, enhanced content is a win-win for both advertiser and publisher.
● An underutilized feature of digital editions is the ability to implement "zoned" editions, Baker adds. "This allows publishers to utilize the data they collect in fine-tuning their editorial and/or advertising content and deploying to segmented lists." An example of a publisher using these tools to great effect, according to Baker, is AARP.
Are Open Rates Overrated?
According to Grimm, open rates may not warrant all the attention they're being given. "We get a lot of questions about open rates, as many publishers use e-mail as a primary means of digital edition promotion. It's a fair question; however, it ignores the fact that for successful publishers, e-mail is just one way digital editions are found and read," he says. "Social media sharing, in particular, has done far more for digital edition readership in the past three years than changes in e-mail templates. In fact, less than half of all Nxtbooks are now read via e-mail. More than half comes from search engines, posting to websites and forums and other forms of social media," he adds.
● "When publishers are concerned about open rates, we find they're really concerned about readership," notes Grimm, "and there are many ways to more readily affect that than e-mail template changes."
The ability to understand audiences is not diminished with branded reader apps. According to publishing services provider Yudu, nearly 40 percent of users who download a reader app supply opt-in data. The highest rate of user registration—41.48 percent—takes place with magazine apps, according to "The Yudu Report," a study released in May. ● So, asking for data can be a great source of potential customers to market to and leads for advertisers. (Those who downloaded promotional catalog and brochure apps also are willing to supply personal information at a fairly high rate—at 37.48 percent and 38.65 percent, respectively.)
The average reading time for magazines on the iPad is increasing over time, the Yudu study found. An examination of the 10 most recent issues of Yudu-created publications found a 50-percent increase in reading time for magazines on the iPad. In general, time spent on the iPad increases as users become more familiar with features on the device, according to a survey by Business Insider, cited by Yudu.
As for return rates, 64 percent of magazine readers return to an app, on average coming back 3.7 times, the study found. A high rate of downloaded software updates (33.7 percent of all downloads) also indicates a high rate of interaction with magazine apps, "User retention is particularly important for edition-based magazines, whose sales are largely driven by customers returning to the app when new content is available," according to the study.
The study also shows an upward trend in in-app purchasing for Yudu customers, with very high percentage increases in January (53 percent more than the previous month) and February (81 percent over January). While the rate of increase slowed in March (to 8 percent over the previous month), it was still significant. "The relative consolidation of downloads in March demonstrates a new plateau being reached in the popularity of the in-app purchase system," the report concludes. "Even though the up-front payments still make up the largest revenue portion for iPad apps, the data suggests that the revenue stream from in-app purchase is on the increase."
● These numbers are significant as publishers seek to build out a branded magazine app and mobile website strategy.
As Baker says when asked the question "Where are we now?" with digital editions and apps: "I feel like answering, 'Light years from where we were five years ago!'"
So … Where Are We Now … Really?
We may be light years from where we were five years ago, but the way technology evolves, we may be light years from where we are now by the end of the year in both digital editions and apps, consumer adoption and metrics.
"Opportunities are growing," says Edwards. "Newsstand from Apple will be another string to publishers' bows, offering automated content downloads and increased discoverability."
In addition, he says, "Native apps, Web apps and HTML5 digital editions need to be maximized, as vendors should be able to offer cross-platform subscription and advertising integration, as well as custom sponsorship and revenue solutions. Lead generation is one focus of some b-to-b apps."
In fact, sponsorships and in-app ads are being seen more and more frequently in both b-to-b and consumer apps.
Also a boon for consumer publishers or other paid-circ-driven publishers, notes Edwards, "We still see customers willing to pay between 50 percent and 100 percent [of the] traditional print price for mobile- or tablet-only subscriptions. Plus, now, publishers can bundle print and digital and app offering; there is good flexibility in the deals available to customers," he says.
"New, short-term developments are emerging tablets," Edwards adds, "so … Samsung Galaxy and HP (Bada OS), which publishers can jump on through native apps or HTML5. Plus, there will be TV apps in the coming years." PE