Book Now For Sipa Conference 19th Nov

Another interesting looking event from SIPA.

Full programme

SIPA’s 3rd online conference will feature two keynote addresses – from David Cushman of 90:10 and Julian Turner, CEO at Electric Word – followed by six interactive round tables.

Each round table will be prefaced by two, 15-minute practical case studies on the topic, leading into a 45 minute discussion.

The breakout sessions include:

• E-readers and mobile apps, and how they will affect the way you do business. (Dominic Jacquesson, Ink on Dead Trees; and Ed Coburn, Harvard Health Publishing)
• Free versus paid content – how can you combine both into a profitable publishing model? (Craig Hanna, E-Consultancy)
  Plus, Subscribers or members? – hear how one leading publisher has turned all his customers into members, improving loyalty and retention  (Robin Crumby, Melcrum Publishing)
• Using social media to build and strengthen your brand. Plus, how does it shape up against other forms of marketing, such as banner advertising? (Matt McGowan, ClickZ, Search Engine Watch & SES, Incisive Media; and Andrew Seel, Qube Media)
• Why dedicated email marketing is more important (and profitable) than ever. How trigger emails and automated campaigns can boost your revenue, how to combine online and offline channels to create sales momentum, using the e-charm offensive to boost sales and renewals, plus the truth about Google Adwords (Riaz Kanani, Silverpop; and Nick Laight, Canonbury Publishing)
• Interactive media and new product launches – Case studies from the winners of the SIPA UK Awards, why they won – and how you can harness their approach (Emma Rogers, Electric Word plc; and Andy Wiliams, Informa)
• Transitioning your product from print to online – Case studies from two leading publishers on how they’ve taken products from individual print subscriptions to portal driven site licenses and membership models  (Louise White, Incisive Media; and Vicky Page, Emap Inform)

Wringing our Hands about paid content and advertising

I didn’t manage to get to the AOP Conference last week, but no surprise that it appears the discussion there was mostly much wringing of hands about how to make the paid content model work.  The Guardian reported;

“Digital consultant Bill Murray warned publishers that if they put a barrier in front of their users, it is likely that they will disappear. Instead he suggested, they need to rethink the concept of content. The most important factor in the success of iTunes success wasn’t the content, he argued, but the service”.

This seems to me to be the crux of the issue and is accidentally a key insight in to the reasons that publishers find the paid model challenging.  The natural instinct for a publisher is to put the content at the centre of the thinking.  Magazine publishers start their working day by thinking about how to make a better magazine and then work out wards from there.  When they ask what their readers want, the answer can only be something that can be squeezed into a magazine delivery format.

“Not me!” I hear the progressive publishers cry.  The honest truth is, it is almost all of us.  The paid content model requires a fundamental rewiring of how our media brains work.  Instead of putting the content at the centre of our strategy we need to put the user at the centre.

If I ran a chain of coffee shops I might consider that if I make the best coffee I can my business will thrive.  I invest in better beans, more reaosting technology, training my staff how to make the best coffee, serving the coffees in the finest china mugs money can buy.  I will fail every time until I realise I am not in the coffee business at all.  Not sure? Well think about this;

A famous case study of the demise of the Parker Pen company exposes the same mistake.  When Bic began eating into the share of the Parker Pen business by selling cheap biros the managment at Parker determined to compete.  They reworked their manufacturing process to produce cheaper pens.  They judged that to match the price of the new upstart they needed to cut their own price.  The result was disasterous and share conitnued to fall.  After a while the rate of decline accelerated to a faster rate than the growth of Bic.  What had gone wrong?  The inisght to fixing the problem was to recognise that Parker was not really in the pen business at all.  When a customer selected a Parker Pen it was most usually as a gift.  The substitues were not the Bic, but a rather a cigarette lighter or a letter opener.  A reduction in the quality of the Parker Pen had sidelined them in the gift market and continued to leave them at a competitive disadvantage to Bic on price.

What is there to learn from this for business media? The content we used to offer (mostly news) is now avaialable for free.  We have competed by offering our own news for free but have discovered that our users, instead of rewarding us with loyalty and praise, now simply take us for granted and use us as one of many sources of news on the Internet.

Other articles in this blog have said this before, and I make no apology for repeating it again.  Our business is not content.  Our business is helping users to make better decisions and helping vendors to sell more.  When David Gilbertson says that we over estimate the importance of business journalism he makes a fair point and if you read this blog and others you will find lots of clues about what to do about it.  But now for a heresy.  What would happen if we put the question differently?

Instead of

“Giving content away in an advertising supported model does not create enough user engagement (page views/session) or repeat visiting to justify a high CPM.  As a result we conclude that the ad model doesn’t work and we say, how can we create a paid content model?”

Lets try, “What would we need to do to persuade users to engage with our content in such a way that advertisers woudl agrees to pay a CPM sufficent to pay for the content creation costs and give us a profit?”

Let’s think about the scale of that task.  In the old model a typical B2B magazine with a 20000 circulation might have expected to sell ads at around £1500 a page.  That equates to a cost/000 of about £75.  Our current free content model is a long way short of that.  Our typical B2B companion website might get 100,000 page views a month. With a 70% bounce rate only 30% of that traffic is likely to be effctive for advertisers to reach.  Let us imagine that we can service three ad impressions on each page.  So if we sellout our usable inventory our total ad impressions will be 90000.  If you are selling your inventory at £30/000 cpm you are probably doing well.  So if we sell out, our monthly revenue will be not more than £2700 – less than two pages of advertsing in the old model.  My hypothesis could be wrong by a factor of ten and we still don’t have a great business!

We need to find a way to take this model and achieve at least £50000 revenue/month. Driving the number of user visits up is unlikely to work.  The universe of relevant people is limited by the scale of the niche.  In any event the task is daunting.

Consider this:

Where maximum monthly revenue = M

Monthly page impressions= T

Bounce rate (expressed as a decimal) =B

Number of Ad impressions/page =A

Average achieved CPM =C

Then M= T*(1-B)*A*C

Max Rev = 100*(1-0.7))*3*30= £2700

So. all other things being equal, by how much would any one variable have to move to achieve our £50k goal? The terrifying answer is we would need either 1.9m page impressions/month or 55 ad impressions on each page or a CPM of £555!

This seems to me to be so far removed from anything that could be remotely achievable that the drive to paid content is impossible to resist

Does this mean that we should give up on the ad model. If we could improve CPM by 50%, increase available traffic by 50% and halve the bounce rate would that help?  The answer is not much.  Our maximum revenue would still be just £13000 a month.

As with content strategy, using offline thinking in the online world is always going to disappoint.  If you think about it, the magazine ad model, where we could charge £70/ooo to perhapsps fifty advertiisers in the same issue is the equivalent of having 50 ad positions on every web page.  No wonder the offline ad model doesn’t work in the online world.

Is it possible to consrtuct an advertsing model for the b2b web that pays the bills? While I think about that keep cracking on with those hybrid strategies.

Appointment of New PPA Chief Executive

The PPA is now engaged in the process of recruiting a new Chief Executive following the abrupt depature of Jonathan Shephard last month.  The PPA has a key opportunity to to raise the level of its game, to reinvent itself and become relevant again in the new media world.  My posts try and stay away from specific news events, but I make an exception in this case as I care about the PPA and I want it to be relevant to me in the future.

When I was at Nexus, for the first time in my professional life we were not members of the PPA.  I thought about joining but then wondered what would happen if I didn’t.  The answer was not much.  Perhaps most surprisingly nobody from the PPA ever called us to invite us to join.  This led to me think about what would persuade me to pick up the phone and join again on my own initiative.  Here are some of the things I thought;

1) Although periodical publishing remains part of what we do, I no longer feel defined by the concept of periodical publishing.  I would be much more likely to join an Association of Business Media Providers.

2) If the PPA, or whatever it becomes, is to survive it must get its membership marketing act together by giving all business media providers, large and small, print publishers and web only providers, good reasons to join the party.

3) Abandon the increasingly irrelevant PPA Awards and replace them with two events – one for consumer media and another for business media.  The categories have barely changed in twenty years (with the exception of adding a business website category).

4) Change the priorities for the PPA lobbying activity.  PPA did a great job over many years in negotiating and managing the relationship with the Royal Mail.  I have no doubt they still do.  In 2009 most of us we are as interested in the relationship with Google as as we are with the post office.

5) Decide defintively what the PPA is for and then pursue that goal with a passion. Lobbyist? Trainer? Networking faclilitator? Promoter of business media benefits to business media customers?  All of these?  None of these? One of these? Which are more important?  Here is the current list taken from the mission statement published by the PPA with my annotations in brackets

By engaging with Governments in the UK and Europe, to defend the legal, regulatory and commercial environment in which our members operate (Agree absolutely, but what are the key deliverables from this work?)

To help our members navigate the transition to the changing digital environment (What if I am in business media but don’t publish magazines.  Am I excluded? The goal assumes that transition is the right approach when it might not be.)

To provide up to the minute information, market knowledge, case studies, analysis and insight  (for whom? Publishers? Agencies?Readers?)

To promote magazines and their brands as the advertising medium of choice (But they are not.  . The emphasis on magazines implies that they are more important than other media deployed by media companies and increasingly they are not.  We know it, our readers know it, our advertisers know it, but our trade association appears not to)

To bring members together to share ideas, information and best practice (Nothing wrong with networking but apart from an annual conference what has actually been achieved here?)

To ensure that the industry continues to attract and develop talent. (Thats an impossible objective for the PPA but it can play a role in facilitating such an outcome. )

To deliver positive results for all parts of our diverse membership (meaningless)

To celebrate success and promote the health and image of our industry (our industry is in a crisis of strategy, profitability and confidence!)

In short too many goals, defined to widely.

Sometimes the PPA appears to live in the same Village as Noddy.  The trees are lovely, the grass is green and we must never go into the dark wood.  Its time to face up to that fearand come and join the rest of us fighting  goblins.

I am a believer in the PPA.  I want it to be relevant.  I hope the Board of the PPA use this opportunity to hire a CEO who has a clear and focussed plan for how to make to make it so.  To get that kind of vision and leadership it may need to pay more than it has ever done before.  If you think that person might be you, give Paul Farrer a call who is acting for the PPA in making the hire.

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• Jonathan Shepherd leaves PPA (guardian.co.uk)

Paid Content – A snack or a Meal?

A lot of people are talking to me about the paid content problem. When Rupert Murdoch starts takiing the subject seriously suddenly everyone sits up and pays attention.  Just a few weeks ago Emap announced that the content from their paid mgazaines was no longer to be made available free and would be put behind a pay wall.  Every media company I know is thinking about how to sell content. Most will fail.

The motivation for this is the difficulties many are having in building a sustainable advertising based digital solution.  Building strategy around the failure of its predescessor caries some risks, not least that the implementation will misunderstand how online paid content works.

If readers have paid for magazines in the past, some argue, then there is no reason why they should not pay for that content online too.  For newspaper publishers and business media owners this is a fundamentally flawed understanding.  Consumption of newspaper printed material is a “lean back” extended disovery of content.  When I pay for my Saturday paper I know I will spend at least half an hour and probably more exploring it.  I am likely to read most of the UK news pages, a good chunk of the foreign news, at least one of the leaders, a rummage through the sports pages and an attempt at the crossword.  I am concentrating on the newspaper, and am fully engaged wth the taxonomy of its construction.  I am enjoying the atmosphere of the paper and its familiarity of structure.

In business magazines the experience of readers is similar.  When print readers are researched they will tell publishers that, depending on the magazine they spend, between 20minutes and an hour on reading their trade title (leastways they used to before the Internet.)

How different is this from consumption on the Web? It is completely different.  The traffic patterns on web sites are very different from print circulations. Most b2b sites will have characteristics similar to the following list;

1) Most traffic comes from natural search (implication – answering the search enquiry is more important than the publishers brand)

2) The bounce rate is between 60% and 70% (implication – if the purpose of a landing page is to get the user to consume another page the approach is failing for most users)

3) The average page views/visit is between 2 and 3. (Implication -  A few users are consuming many more than the average but our levels of engagement with users, even when the information is free is too low to create a paid content model)

4) The amount of time spent on a page averages at less than a minute. (Implication – an individual page or article does not matter that much)

What can we conclude from this?  It appears that consuming web news is a lean forward short content consumption snack.  Readers who buy the Guardian every day and would never been seen dead with a copy of the Telegraph are much less loyal on the web.  If I want to read about the Grand Prix last weekend, I can make a search engine enquiry and discover muliple sources of information.  I will visit a site, perhaps not even note the publisher and then back out intothe search engine and move on.

Snacking for information in this way is very different from the lean back engagement I once enjoyed with the printed media and cannot be monetised in the same way.

There may be a very small number of users who can be persuaded that a subscription to online newspaper content is worthwhile, but it is highly unlikely to be a sustainable business model.

Does this mean that paid content strategies are doomed?  Not at all and in business media the opportunity is huge, but the approach to content selling is not the same online as in print, any more than the marketing and pricing strategy  for Gordon Ramsay is the same as that for Spud u Like.

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• News Corp. to charge for newspaper websites (cbc.ca)
• Barely half of publishers believe in paid content (thisisherd.com)
• Newspaper Publishers Half Way Sure About Paid Content Success (marketingpilgrim.com)
• Google technology to aid charging for online content (telegraph.co.uk)
• Is Free News on The Internet Over? (abcnews.go.com)
• Paying for politics: The Spectator app (bbc.co.uk)
• ‘Only 5% would pay for online news’ (guardian.co.uk)