Is E-Book Technology the Publishing Savior?

I continue to read with great interest the latest awakenings by the top brass in our country’s leading publishing houses around their plight. Little doubt that we all understand the dire circumstances these businesses are facing. In just the last 12 months, over 700 magazines have shut down. The tidings of the recent decade that foretold of a shift in consumer media consumption patterns have come to fruition. Consumers and business people have found a viable platform with which to do their research, stay informed, purchase products, exchange ideas and read about the latest news, trends and opinions around an innumerable number of topics and special interests. More and more people around the globe are spending more time on the internet than ever before.

Among the major ripples felt from this sea change in media consumption habits is the dramatic shift of advertising dollars away from legacy media of all types to internet venues and communities. Sure… more absolute dollars are still being spent today in traditional channels such as television and direct mail… but these dollars are in steady to not-so-slow decline. That’s because marketers, who must remain media-agnostic about the allocation of their budget, have no choice but to base spending on clear and measurable ROI metrics. As this focus takes hold… the movement away from traditional media has become even more spectacular.

Let’s be clear. The dominant reason why most of the 700 magazines have gone out of business in the last 12 months is NOT that the subscribers and newsstand readers lost interest in the titles’ subject matter. The reason these magazines died… was that these same readers have found new and more interactive communities and locations that provide them the same and/or better content within the new interactive platform. In many cases this content can be customized, aggregated and delivered based on the reader’s desired frequency and interest. Magazines have died and will continue to die in print because the advertisers who once supported these publications with their ad dollars… have moved to position their ad units in these new venues and communities. Not being a fool… they reason that they must plant themselves at the intersection of content and customer. As such, they move out of print into the internet. As a publisher, when your print costs continue to rise, circulation begins to erode and advertising support declines; the end is near.

I know. I was there. At the height of my career in publishing, I found myself at the helm of Computer Shopper, the world’s largest print magazine. We routinely folio’d our monthly publication at nearly 1000 pages. We sold more advertising pages literally than any other magazine in the world for many years. The rise of the internet and comparison shopping engines undermined our core business and reader proposition. Consumers and business people could now find our content online in venues that allowed them to leverage this knowledge and actually purchase products. Truth be told, we saw this coming and created our own ecommerce engine, computershopper.com, which, in the end, served to accelerate our demise. Today, this once great magazine is gone.

Publishers Jump on the E-book Bandwagon
The recent announcement by a consortium of publishers to finally admit that there is a desperate need to remake themselves is a welcome signal. Like other announcements of late regarding partnerships between content providers, book and magazine retailers, and “e-book device” technology makers, there seems to be a mad dash to get “content” onto a digital reader. In fact… much of the talk about these devices now centers on the potential of creating “a new definition of magazine” to leverage this new delivery mechanism.

Based on our own data and feedback from several web-based retailers, e-books of all brands and types are in short supply this holiday season and, in many cases, sold out. Consumers have started embracing this new method of reading books and magazines on a pace that rivals the ipod. My sense is the real tipping point will occur when the device is priced under $150. Publishers and all content providers know that this day is coming very soon and are logically getting ready.

What I am not hearing as of yet is a clear strategy on how the new e-book delivery device is going to solve the real problem: the loss of advertising revenue. In their race to port today’s content to the new device… there is a big warning sign on the road ahead: “You folks have been here before.” When the internet rose to prominence, there was this mad dash to build websites and sell advertising on “box car” numbers… impressions. Marketers flocked to the web to “reach” eyeballs. Sure, there was advertising discussions around click through’s, etc… but the real focus was how “cheaply” an advertiser could purchase 100K impressions. All of our very valuable and costly editorial content was suddenly being hawked as a commodity. The brand that we publishers spent millions of dollars to create… the loyalty and involvement of your readership that took years to cultivate… was relegated to a spreadsheet analysis of audience reach… then, inevitably, marked down. Is it any wonder that our web-based revenues have never really come close to the levels experienced in selling print advertising?

Publishers left it to Google and other search engines to build a model that grabs content and assembles a gargantuan number of advertisers that are willing to stand in line to bid up positioning within search results of your content. Then, after billions have been drained out of our marketplace… we stand and applaud the success of the model. It is truly mind-boggling that the content providers in our world have allowed this to happen. Are we really waiting for Google to figure out the advertising model for the e-book revolution? Let’s stop obsessing about the creative and graphic challenges of porting editorial content to the 6 inch screen or about whether it should be in black and white or color. The real solution for the publishing model is all about reader engagement and analytics.

The Missing Link: Analytics
As we build out the e-book platform…it is critical that deep reader engagement analytics be resident in every device partnership. As CEO of an organization that has just built our own digital publishing solution, we made sure to incorporate both email and Google analytics reporting into the back end from the start. In order to save the publishing industry… we must not only prove that we can create new content and design for this new platform… we MUST prove that we can once again engage the reader. That “proof” lives in our ability to demonstrate that old and new readers are not only purchasing these new devices… they are actually spending time with the content in a meaningful way. Reader engagement data is essential to proving to advertisers that a new publishing platform has been created where it is more than worth their dollars to position their ads adjacent to congregation points. That e-book readers are actually flipping through their magazines on this new device and spending time with the content. We need to clearly demonstrate that “full page” digital advertising units opposite digital magazine content are getting readership and response.

The deeper we can document reader engagement in this new publishing paradigm… the better chance we have to arm the sales team of the future with the tools to establish rates and programs that are commensurate to this level of reader engagement. We have a chance to reestablish the power of quality editorial content to draw quality readers to a venue that can provide meaningful data about this intersection. We can once again prove that readers who spend time with content are more likely to not only observe advertising… in fact they are more likely to take action on those ads. When we prove all of this… the value of advertising within these editorial environments will grow in price and start a new profitable era within the publishing industry.

There is much work ahead. I, for one, don’t believe any of the book merchants selling Kindles, Nooks, etc., care a bit about reader engagement. They want to sell books into this new platform and their devices reflect that. Let us not be deluded into believing that these devices solve the publishing problem. Circulation and newsstand revenue had always been a nice revenue stream… but on-page advertising is truly where profits are made. None of the devices on the market provide the analytics necessary to win this battle.

What we don’t need today is a simple conversion of print to digital… we need a solution that provides the tools to make the case for why digital publishing is the new advertising platform for your publication and/or your company. Thus, be wary of the quick-fix digital publishing solutions being marketed by your ink-on-paper printer. Kinda like having the fox watch the hen house. Printers have the most to lose in this shift to digital e-readers. They will NEVER provide the level of tools and insight to help you win.

There is work in developing content that is engaging to the reader on this new platform. This will not be easy. We must recruit a new class of writer and designer that understands the consumption patterns of consumers and digital content. These new staffers must understand the editorial franchise, the glue that binds your publication and its readers, and be able to bring it to life in an engaging way via this new device and delivery mechanism. Your marketing dept may need to be overhauled. The new team must be focused on designing innovative ways to move your current readership to embrace the new digital content. Marketing folks need to earn their keep by understanding the inflection points amongst readers that will incent them to move to this new platform. They must also be aggressive in terms of creating new sales tools for your team to sell the reader engagement proof of this new connection. You may need to fire your head of sales and a good portion of your sales team who have made money selling box cars and reach; the folks who have presided over the systemic degradation of the advertising value of your brand. We need a new class of sellers who, armed with a deep war chest of reader engagement proofs, have the guts to sell the value of the connection between digital content, readers, and new advertising units. Professionals who will stand up to the current “negotiate everything” mentality that has gripped our industry. We need new leaders at the top that aren’t trying to wait out this current “downturn cycle.” Leaders who don’t really have the chutzpa or desire to make the hard decisions required to transform their business to leverage the new reality. The shareholders of these companies need to be quick and decisive in showing this group the door.

Despite the excitement and mania around today’s e-book releases and announcements, these devices will not solve the publishing problem. Left alone… we will watch the demise of many major legacy companies in the years ahead. The time is now to wake up and put our own house in order and get our priorities straight in order to survive. E-book technology is this generation’s newsstand and subscription delivery system—and it is exciting. But the true winners will look past distribution strategies to the place where real money can and should be made. Let’s not wait for the search engine behemoths to once again take the lead and all of the new advertising dollars. This is our only opportunity to regain the foothold on readers and advertisers that we once enjoyed.

There is some time… just not a lot to get this done.

Al D

Posted in Print Industry | 1 Comment »

No magazines have to die!

Seems like each week, there is yet another death notice published in the trades about the demise of another print publication. As someone who has spent the bulk of his career in print publishing; these notices are a constant reminder of an industry in need of much more than bailout to survive – total makeover is required. My publishing career began in the trade arena for titles like Training magazine and American Building Supplies. I moved on to build a print magazine division for Children’s Television Workshop (working for Nina Link then; now President of MPA) and then to Parade Magazine. My longest publishing stint was some 13 years working for Ziff Davis as Associate Publisher of PC Magazine and then Publisher of the worlds largest monthly print publication; Computer Shopper Magazine. As I have said many times before…I do believe that I have ink flowing through my veins.

The publishing industry should have seen what we did many years ago….the rise of the internet. I remember speeches that I gave at publishing gatherings warning folks nearly 10 years ago that this day would come. Their print readers were getting older and the new breed of subscriber and newsstand customer was looking much more to the internet as their primary source of information. I remember several times nearly being booed off the stage for having the audacity to declare that print publications would ever be in the crisis that we are facing today. In all this wreckage there is no hubris or gloating…no ‘told you so’….more an urge to correct the business model before it’s too late. Those publishing execs who are still in a state of denial about the future of the print publishing business need to retire to other career tracks. What is needed is a bold new initiative…a remaking of the publishing business.

Digital publishing is the answer to the demise of printed publications. The stodgy and legacy print folks…(printers, circulators, paper manufacturers, postal service) will continue to get on their soapbox and proclaim that it has been tried before…that digital publications “don’t work.” Frankly that’s the talk that folks who are trying to protect their butt say all the time. The real answer is that these people are afraid to embrace new thinking and put in the elbow grease required to get the digital model to work. They would rather calculate the months remaining until retirement than forge new ground and rebuild the publishing model. They would rather read more death notices and lay off more folks. They would rather think that trips to Washington to beg for “bailout’’ money is the strategy to save their venerable publications. Flawed thinking to the extreme.

Consumers have embraced the internet and interactive content at a faster rate than any other communications medium in our existence. There is no debate here. While there may be some tough board meeting and shareholder discussions ahead…there is no time to sit around believing the legacy business model will return. Today is the day to get the courage and look at the data and put your people to work on convincing readers and advertisers that digital publishing is the communications medium of 2009 and beyond.

Here is my plan to save magazines:

1. Examine your current print subscriber file – how many email addresses do you have for your print subscribers? If it is small….start today – append your postal file with email addresses. Your goal is to have 100% of your postal subscribers matched with their email addresses.
2. Work with Zeta Interactive on converting your print publication to a digital replica. This doesn’t cost a lot of money or time to do…and it is a mandatory step.
3. Take a look at your P&L and look at costs relating to editorial creation with an eye toward reducing your overall edit expense. There are many ways in which social media, user generated content, etc…can supplement more costly home grown edit.
4. Get your circulation department focused on creating promotions that drive new subscribers to subscribe to the Digital version of your product….you have boatloads of circ and promo dollars…start directing them away from print packages to digital publication promos
5. Get your marketing department ramped up to create promotional efforts that drive your current subscribers into the digital version with added content, video and sweepstakes if needed…Zeta can help here as well.
6. Through the Zeta Interactive Next Page digital publishing solution….the level of analytics available to you will be incredible. Never before has a publisher had the depth of knowledge about how a reader consumes content and advertising in a real time basis. This knowledge can drive editorial decisions and can provide your sales team with tremendous power in quantifying to advertisers the power of your brand and content with its subscribers.
7. Sales team…make the hard decision. Do you have a team that can sell this value of the relationship between your content and audience in the digital world..? If not…Fire them..and get the HR department focused on finding you people who can truly sell interactive advertising.My sense is that many of these teams merchandise the interactive assets in print packages, giving away your valuable interactive relationship with readers. That thinking needs to go bye bye.
8. Selling the power of digital advertising isn’t order taking. Publishers need to be focused , energized and passionate about the power of their brands and content relationship with digital subscribers. This is a much more intense and awake publishing industry. The idea that you print something and it has a shelf life is over. Real time timelines and demands…Real time publishing.
9. Will it be easy to recoup the advertising rates and revenues once enjoyed by the print publishing world? NO. The publishing industry has a wealth of very smart people. It’s time we directed their efforts into understanding and leveraging the new publishing medium. In time…as we get more passionate about the reporting and analytics available in this new digital publishing platform…we will be able to regain the value lost in circulation and advertising revenue.

If you do nothing…if we do nothing…

If we don’t embrace the digital publishing revolution…then there will be many more death notices.

There will be many more board meetings where angry investor groups demand answers and the heads of those who are too fearful or stuck in the old thinking to make the changes…required to build new business models.

We are a country whose legacy is a pioneering spirit. Not sure where all of that courage and spirit has gone. Time to get off our collective butts and put our backs into making the digital publishing business work. I am tired of watching good magazines die. All of us at Zeta Interactive are here to help save magazines, catalogs and direct mail….Check us out…

Al D

Posted in Online Marketing, Print Industry, Uncategorized | 2 Comments »