Well, no. Publishers are finding themselves at the wrong end of an uneven, unhealthy bargain, which is bad news for both news business economics and quality, pluralistic information.

“This is a really depressing, dystopian way to think about publishers and platforms. It only really makes sense if you view writing as a fungible commodity,” says John West in Quartz. For the synergy logic to work, a piece of journalism must be viewed as an ad unit, its value being no more and no less than how many clicks it generates. Even more depressing for West is that Facebook, Twitter, Snapchat and all other platforms view journalism in this way – they can see the cost (or potential revenues) of quality content, but not the value – and “that’s going to smother journalistic independence and the open web”.

The platforms have created such seamlessly efficient ways to deliver content that news publishers will soon have no need even to have a website. Facebook’s Instant Articles, Apple News, Google’s Accelerated Mobile Pages, Twitter’s Moments, Snapchat – they provide comfortable, contained experiences, perfectly tailored for mobile, which is the direction audiences are headed. While the bare audience numbers make sense in the short term, warns West, “it will cost you”.

By granting control of content to Facebook and its like, publishers are turning platforms into the world’s gatekeepers to information, and these risk-averse megacorps already have a less than glittering track record of speaking truth to power and promoting diverse views.

It also means that publishers become ever more reliant on clicks: they only have worth to the platform if they bring in the traffic. The implication for quality is clear: as publishers become wire services for platforms, they lose their unique voice, their identity and their connection with their own audience. Editorial output has to match the platform’s audience, so publishers are incentivized to create bland, populist or clickbait brand of news. This means that a publisher’s traditional audience trusts them less and, with the context removed (knowing that an article was produced by The Guardian or The New Republic is an important part of the reading experience), an article has less meaning.

West also laments that “we’re also losing the organic and open shape of the web. It’s becoming something much more rigid and more hierarchical.”

“The answer is simple, but it isn’t easy,” he concludes. “We need to stop pretending that content is free. Publications need to ask readers to pay for their content directly, and readers need to be willing to give up money, as opposed to their privacy and attention. This means that publications will have to abandon the rapid-growth business models driven by display ads, which have driven them to rely on Facebook for millions of pageviews a month.”

John Herman in The Awl take a look at another aspect of the unfolding battle between publishers and platforms. Platforms like Snapchat, Twitter, Facebook and Google are creating their own editorial spaces and, in some cases, standalone apps, but are wrestling with what content to put there. With the platforms not having a clear content plan or even what audiences they want to serve, it leaves publishers with the headache of having to ask: “What do these platforms want from us? What will they then want for themselves? What will be left for the partners?” This is an uncomfortable place for publishers to be.

Herman points out that over the past few years, publishers have been providing platforms like Facebook with huge volumes of free content in exchange for big audiences and, occasionally, revenues. However, he warns that Facebook is simultaneously intent on destroying this same advertising system.

Platforms are sucking in the ad revenues that used to go to web advertising that helped support publishers. “These new in-house editorial projects located at the center of the platform, rather than at its edges, will succeed or fail based on how they assist in that project—not according to how well they replicate or replace or improve on publications supported by a model they’re in the process of destroying.”

Publishers be warned.

An article in The Wall Street Journal claims that desktop usage isn’t decreasing, as is often claimed. Jack Marshall explains that while the share of the market enjoyed by mobile internet access is growing fast, the total time spent online from desktops isn’t falling and might even be increasing.

However, Thad McIlroy on the Future of Publishing blog says this interpretation is misleading. The data The Wall Street Journal bases its findings on “encompasses all desktop computer usage, the majority of which relates to the Microsoft and Adobe application suites as well as email”.

“The real story is not that the PC usage is up, but that simultaneous device use — usually called ‘multi-platform’ — has changed the device landscape.” McIlroy says that data from another comScore report, The U.S. Digital Future in Focus 2015, shows that the number of people only using desktops to access the internet is declining sharply in all age groups, even the 55+ segment, and that across all ages the amount of mobile-only users is also growing fast.

This interpretation of the data – that mobile is growing at the expense of desktop – seems to be backed up by Google, which recently confirmed that it’s now serving more Google searches on smartphones than desktops in 10 counties, including the US and Japan. To respond to changing demands, Google is “rolling out new, smartphone-optimized ad formats that give users more reason to tap than its traditional AdWords. These include picture-heavy automobile ads that show users a gallery of their dream ride before directing them to dealerships, and hotel ads that sandwich together availability, prices, user reviews, and pictures into a compact mobile format.”

However, while the amount of mobile access might be outstripping desktop, an Outbrain study in the Asia-Pacific region shows that people consuming content on desktop are much more likely to engage with content compared to mobile, especially when it comes to paid content, reports Trak.in.

“In fact, if we compare desktop vs mobile, then engagement level falls drastically to 36% in Australia; and 9% in India. This means that if an Indian accesses a piece of content on mobile, then there is 9% less chance of his engagement compared to accessing content on desktop. Engagement here means sharing, commenting, liking the post or following the author/publication on social media.”

Of course mobile and desktop are both heavily used to access email. Yesware Enterprise examined more than 14 million messages sent by its users earlier this year to produce a detailed pattern of when and on what device people use to read their emails. This slideshow gives an insight into their findings.

This would be quite a calamity, as what has truly hampered news publishers’ ability to innovate and reposition is not so much the need to restructure their business model for the digital era but, rather, the fact that this era is forcing on key industry players ever shorter cycles of disruption.

Take the printed press. It had decades to accustom itself to a multi-channel TV media environment and then a dozen years or so to adjust to the desktop internet, whereas today it barely has a year or two to be fully ready for the ‘mobile internet’ – let alone futuristic- sounding concepts like the gradually emerging ‘Internet of Things’.

In the past, content providers from less mature markets (from, say, the European periphery or Latin America) could take heart from the fact that they could learn from the successes and errors of pioneers, as publishers in the USA or the larger European markets would inevitably be – it is indeed a rare privilege to have constantly, through peer experience, a crystal ball at one’s disposal. But probably not this time: as ‘second tier’ digital economies go through a leapfrogging process, with swathes of new users coming online directly via mobile (having never gone through the, possibly intermediary, stage of the desktop or laptop), most news providers have to start with a slate that is unnervingly clean.

Still, sceptics of the mobile revolution abound – not so much with regards to the medium’s usage proliferation but its potential for advertising sales.  Indeed, with the percentage of mobile visitors to news sites rising inexorably – a current estimate would put it at an average of one in three – it is hard to dispute the prognosis that, in the near future, close to half (or more) of website visitors will be accessing content and services through a smartphone. Which means that publishers will need to find a coherent and sustainable strategy for monetizing the mobile half of their audience – and this is where things get complicated.

Any monetization strategy will rest on one fundamental parameter: the size and form of mobile advertising.  Unfortunately for publishers, this remains a major question mark.  Most pundits predict that the ‘time spent/dollars spent’ gap will narrow, as it did for the desktop internet over the last ten years – i.e., the fact that users spend more than 10% of their media consumption time on mobile devices yet only 1% or so of ad revenue is directed at this channel is unsustainable and will converge, possibly quite rapidly. Though there have been dissenting voices claiming that mobile will never be a branding medium (and absorb those big budgets) and so never become a leading marketing solution, the consensus – as outlined recently by eMarketer – is that mobile advertising will grow at an annual rate of 50% over the next two years, while desktop ad spending will remain broadly stable. Indeed, in 2017 mobile advertising is predicted to overtake desktop spending.

In theory, this would be welcome news for news providers worldwide as it highlights the key growth area while also underlining the potential weight of the different components; again, eMarketer considers video to be the strongest category, with rich media and native advertising a close second. However, a closer look at the current state of the mobile market can only be a cause of major concern: Google, Facebook and Twitter are absolutely dominant, leaving less than 20% of budgets to be contested by other providers. In short, publishers will struggle to gain what, in the end, may prove to be petty cash.  Indeed, in many ways the writing’s on the wall: mobile banner advertising tends to command lower CPMs and, even worse, is often sold on a CPC basis; ad networks often represent news brands, yet treat this inventory in a purely quantitative rather than qualitative manner. And while the most advanced digital markets count on the emergence of video ads and better creative (such as the IAB’s “mobile rising stars”) to reclaim the branding promise and increase value – and thus price – to the advertiser, at present the picture remains fairly grim.

Does that mean that charging users for content and services will be a sustainable strategy for most news providers? Probably not. Unless a publisher can provide truly unique content (if, for instance, it is the only news provider in the local community or offers some ultra-niche thematic content), it’s clear that the ‘drift to free’ that dominated the desktop web for years is replicated in the mobile environment. This is not to say that all mobile content and services will be free – rather, paid content is going to be more the exception than the rule and it is going to represent only a fraction of overall revenues for publishers. Indeed, as is the case already today with leading news brands, paid content on mobile is going to be part of a broader ‘one subscription’ (probably freemium) scheme that encompasses print, desktop, mobile and tablet.

So, if mobile advertising is mainly going to the global giants and, in addition, user revenues are not enough to sustain a quality news provider, what strategy can improve in the near term a news publisher’s position, especially those not at the very forefront of the mobile transformation? Possibly one that rests on three fundamental pillars, namely:

• A content mix that does not replicate the entire gamut of print or web content but that recognizes the particularities of the platform and the way it is consumed, i.e. during commute times or as a ‘snacking’ medium. This translates to a tailored product with an emphasis on the (latest) news stream – including (even bare bones) live coverage of events, particularly sport, as well as practical, often ‘static’, location-based information (e.g. where is the nearest XYZ?).  Based on examples of major news brands, two extra points need to be borne in mind. First, it may at first appear counter-intuitive given screen size, but short-form video content also scores very highly in user preferences, though its monetization is often problematic as pre-roll ads need to be edited down to be proportionate with, say, a 30-second clip. Second, for publishers active in app publishing, push notifications appear to be a key element in user satisfaction, leading to better affinity metrics and repeat visits – thus either to greater advertising inventory or improved chances to charge for some content or service.
• A marketing strategy that is heavily skewed towards social media, particularly Facebook and Twitter. This does not refer to advertising solutions that these two platforms offer, but to an active posting/tweeting policy. Simply put: research from all regions finds that Facebook and/or Twitter are the new ‘home pages’, also for news, particularly for younger demographic groups. What this new form of aggregation means for the news industry is that publishers seeking to build their mobile audiences should be present at the news streams/feeds of their fans and followers in order to maximize referral traffic. They should also fine tune their specific editorial policies to each platform’s profile and consumption patterns. As things stand, it appears that Twitter is used for ‘harder’ news and Facebook for ‘softer’, and that Twitter works best on weekdays and Facebook on weekends.  Finally, it should come as no surprise that multimedia material, especially video, performs much better than straight text/photo articles.
• A commercial approach that does not rest on ineffective mini-banners, often sold through ad networks which means that revenues are only a fraction of a CPM that is already low, but relies on two principal elements. First, a drive for sponsorships, particularly for native apps, possibly as part of a cross-media deal, that gives maximum visibility to one partner through intrusive creative such as launch ads or interstitials – making a brand ‘co-own’ mobile content is one of the few ways to deliver value and raise noteworthy revenue, at least in less mature digital markets. Second, and more importantly in the medium term, a native advertising offering – with clear rules in terms of layout/notification, pricing and frequency – whereby branded content appearing in the publisher’s news stream is likely to yield positive results. It is hardly a coincidence that Facebook and Twitter’s meteoric rise has rested on varying forms of native advertising.

Will such an approach resolve all questions related to mobile strategy? Does it address all opportunities and threats portable devices pose to digital news publishing? Certainly not. However, it does provide content providers with a solid and scalable first step that does not require a massive investment in capital, human resources or technology in both a challenging macroeconomic environment and an uncertain emerging media ecosystem.

Finally, it brings further to the fore publishers’ key asset: news. Either as a main thrust of mobile content or as a critical ‘social promotion’ tool or as a way to present (clearly labelled) advertising, it is refreshing and encouraging to see that the newest of digital media may rely anew on our industry’s timeless core mission.

While tablets and flagship smartphones might seem developed-world luxuries, mobile broadband and increasingly inexpensive internet-enabled mobile handsets are bringing digital media and communications to all markets. Desktop computer and laptop sales are set to decline in emerging markets, while smartphone and tablet sales expand dramatically, according to figures from research organisation International Data Corporation. As we have noted, for many transitioning countries, mobile is the only way that audiences access the internet.

If you do not deliver a mobile-optimised experience to your mobile audience, you are missing an opportunity to grow audience and grow revenue, as Terence Eden demonstrates in his look at mobile ad networks.

Serving mobile audiences need not be complicated or expensive, and independent news organisations are finding ways to launch mobile strategies despite the press of other priorities and lack of dedicated mobile resources.

Assess the opportunity

The first step in your mobile, or in fact, any strategy is to understand the opportunity, both editorial and commercial.

As Premesh Chandran, the CEO and co-founder of Malaysiakini.com, says, he views everything in terms of return-on-investment and opportunity costs. He outlined some of the thinking that went into assessing their mobile options:

Really, are we going to make money (advertising, subscription) with a mobile app versus a mobile site? What kind of resources will I have to put in? How do we sustain the development?

Malaysiakini, Malaysia’s largest independent news website, had plenty of other challenges and opportunities in the past few years, including defending itself against cyber-attacks that attempted to make the site inaccessible to its millions of monthly visitors.

Chandran had to determine whether the mobile opportunity was valuable enough to dedicate time and resources to when weighed against other demands.

Mobile market statistics for your country are one place to look. For Malaysia, the opportunity is clear. Mobile subscribers have expanded from 6 m in 2000 to 37 m in 2012, according to market research firm BuddeComm. “After starting off slowly, broadband internet has been expanding strongly in recent years and coming into 2012 had reached a remarkable 63% household penetration,” the group added.

Beyond relying on market statistics, you also have a rich source of information already in your own site data. By looking at your site analytics, you’ll be able to see who is coming to your site via mobile devices and also some basic information about the type of devices. This can help you develop a profile of your mobile audience. You can see if they are using smartphones, such as Android, Blackberry or Apple smartphones, or whether many are using more basic internet-enabled handsets, including Nokia’s Asha line of handsets, which target developing markets.

With more sophisticated analysis, you can determine whether mobile visitors are coming to your site and leaving quickly by analysing your bounce rate and seeing whether mobile visitors are a higher proportion of those leaving quickly. The article linked here highlights the three mobile statistics to focus on in Google Analytics and how to find them. The article says the three figures are:

• How many people are visiting your website on mobile.
• How your mobile bounce rate compares to your desktop bounce rate.
• Which devices your mobile visitors are using.

If mobile visitors are contributing more to your bounce rate than desktop visitors, it might indicate that they are leaving in frustration as your site fails to load quickly and eats into their data use. For many emerging market mobile data users, they are price sensitive and will not want to download large pages. It is not uncommon for modern pages with non-mobile optimised images to be a megabyte or more. On more basic internet-enabled mobile phones, these large pages will be almost unusable.

Mobile site, app or both?

Delivering a good mobile experience for your audience need not be difficult or expensive. After assessing the opportunity, Chandran was able to deliver a range of mobile options for Malaysiakini readers. He said:

We ended up with a mobile site (m.malaysiakini.com) an Android app (because one of our developers was keen to do it) and a iOS mobile app (because an external developer was willing to do it for free). The iOS mobile app, also had a tablet version (one app, two layouts).

Regardless of the project, this shows the value of hiring not just good, but passionate, developers, whether on staff or via contract. Good developers want to take on new projects and develop new skills.

Most publishers will want to start small, which means delivering a mobile site. Chandran said:

We think that for news sites, mobile browsing is easier and more cost effective to manage than apps. Apps need to be consistently updated with every OS version, which is costly.

Many content-management systems can automatically detect whether a visitor to your site is coming from a computer or from a mobile or tablet device and deliver the appropriate template. However, to take advantage of this, you’ll need to have a good mobile template, which includes:

• A basic fast-loading design modified for smaller screens.
• Mobile optimised search and navigation.
• Mobile optimised images that load more quickly over slower mobile connections.
• Mobile advertising options.
• If necessary, integration with your paid content system.

Achieving these goals are much easier than they were a few years ago. With growing mobile audiences, content-management systems have added mobile features, and for popular open-source CMSs such as WordPress and Drupal, mobile templates are common.

With the proliferation of devices and screen sizes, some news groups have turned to responsive design. Kayla Knight has a concise but comprehensive overview of responsive design in Smashing Magazine. In it, she writes:

Responsive Web design is the approach that suggests that design and development should respond to the user’s behavior and environment based on screen size, platform and orientation.

Malaysiakini does not use responsive design, and it is still very rare amongst news websites. As your mobile strategy and the revenue from it develops, you might want to consider it in the future. For those publishers who use WordPress, fortunately there are several very good free and premium themes that are responsively designed.

Revenue options

Of course, part of assessing the opportunity includes trying to estimate the commercial opportunity. As with your standard website, you can easily start to generate some revenue using mobile ad networks. As you develop your strategy, you will want to make sure that the ad network you choose meets the needs of your strategy, such as supporting not only a mobile website but also any apps that you might considering developing.

Ad networks can allow you to start earning revenue, but you will also want to make sure that selling your own mobile advertising is part of your revenue strategy. Malaysiakini does not have any advertising staff dedicated to mobile, but they are using both ad networks and in-house sales to support their mobile strategy, Chandran said.

However, one of the key things that many sites are finding is that advertising is only one revenue option in terms of mobile. As we saw in our recent article looking at paid content strategies in Latin America, mobile and tablet apps can be an important part of a paid content strategy. Smartphone and tablet owners are often more affluent than the general population, even in developed markets, and have shown a greater willingness to pay for content.

Mobile must be a part of your digital strategy or you risk artificially limiting your audience and missing the opportunity to establish yourself early in the mobile advertising market. Fortunately, delivering your content to mobile audiences is getting easier, and you shouldn’t wait to start taking a few simple steps to inexpensively serve mobile users in your audience.

All of this represents an amazing opportunity and an incredible challenge to news organisations who want to engage with their audience and generate revenue to fund their journalism.

As the mobile phone has become the primary means of accessing information, entertainment and socialising for billions of people, mobile advertising has become the primary means of remuneration for content owners.

In many countries, mobile advertising is a mature industry.  No longer the preserve of dubious links offering “Free Crazy Frog Ringtones!!” – mobile advertising is used by global and local brands to drive engagement with users.  If it’s still in its infancy in your country, it won’t be for long. It offers a credible and sustainable way for media organisations to produce their content at no direct cost to their users.

In the old-fashioned days of advertising, every newspaper would have an ad-sales desk.  Hordes of salesmen (and it was nearly always men in my experience) would shout down the phones trying to convince companies to buy a quarter-page advert in the weekend edition.

All that has changed.  Rather than employing sales people to negotiate directly with potential advertisers, most mobile sites use an Advertising Network.

Understanding ad networks

Ad networks are really simple to understand.

• A business owner creates a space for advertising on their mobile site (or app).  This is called a “slot”.
• The advertising network analyses the content on the page and the people who are visiting it.
• The advertising network then conducts real-time bidding among the advertisers.  It looks through all the adverts that it has on its books, matches up the adverts that it thinks will get a high rate of engagement, then sees which company is willing to pay the most to be shown at that specific time, on that specific page, to that specific user.
• The advert is then shown to the user in the page’s slot.

All of this happens in just a few milliseconds.

Getting paid

Broadly speaking, there are three ways that mobile adverts make money for content owners: CPM, CPC and CPE.

CPM – Cost Per Mille is the most “traditional” way of advertising.  It is also the least profitable and is falling out of favour.  It simply measures how many times the advert is shown to a user.  For every thousand (mille) impressions a fixed sum is paid.

CPC – Cost Per Click is the most common way of measuring mobile advertising.  Whenever a user clicks on a mobile advert, a variable sum of money is paid out.  Depending on the advertiser, and the market, this can be anywhere from a tenth of cent to a dollar.

In some cases, the advertising network will track whether the user went on to purchase a product or install an app based on clicking an advert – if so, it will pay out more money to the content owner.

CPE – Cost Per Engagement is the newest – and potentially most profitable – method of mobile advertising.

Using HTML5 – the latest version of the code that creates web content – it is possible to create interactive adverts which don’t result in the user leaving the site.  For example, clicking on an advert could play a trailer for a movie.  In this case, the advertising network pays out every time a user engages with an advert.

Mobile advertising networks

There are dozens of mobile advertising networks available.  The industry is still relatively young and contains many companies which have grown rapidly in just a few years.

When choosing a mobile advertising network, be sure that the company has an account manager located in the same country as you, and also ensure that they have sales teams in the countries you wish to target your content.  Finally, make sure they support the platforms that you are currently on – and those to which you wish to expand.  For example, you may be mobile web only now, but do you have plans for an Android app?

While there are hundreds of mobile advertising networks (http://mobithinking.com/mobile-ad-network-guide), there are a few major players.

InMobi

InMobi started in Bangalore, India, and has rapidly expanded into Russia, Asia, Africa and Europe.  They support mobile web, Android, iPhone, and Windows 8. The author is a former employee of InMobi.

Google AdMob

Google is well established in the mobile advertising world.  AdMob will only work on SmartPhone apps – it will not work on mobile websites.

Google AdSense

Google’s AdSense platform allows publishers to monetize mobile websites.  If you already use AdSense for Web, you will be familiar with its layout and how it works.

Amobee

With offices from Buenos Aires to Singapore, Amobee is well placed to integrate with a variety of mobile devices in a wide range of markets.

BuzzCity

Specialising in Asia and Africa, BuzzCity is serving billions of mobile adverts every month.  It can target mobile web, Android, and iOS – as well as older devices such as BlackBerry and J2ME.

Hunt

Dedicated to the Latin American market, Hunt has seen huge growth over the last few years.  It can deliver adverts to mobile web as well as app.

In addition to choosing an ad network, there are several other things to consider when working with mobile ad networks.

Filtering adverts

It is vital that your mobile advertising network allows you to maintain quality control on the advertising you are showing.  For example, you may decide that you don’t – or legally can’t – show gambling adverts.  All good networks will offer you fine grained control over what content gets shown on your site.

All networks will let you filter out adverts by category.  Some will let you filter by keyword or destination URL.  That means you can block your competitors’ adverts from appearing on your site.

Make sure that your network will fully explain how their filtering works – your reputation may be at stake if you allow advertising which runs counter to your editorial position.

Of course, the more adverts you filter out, the fewer adverts may be shown.  This will lead to a high NFR…

NFR

One important thing to consider when choosing a mobile advertising network is their NFR – No Fill Rate.

Every time you request an advert from your network, they will perform a complex series of calculations to determine which advert will be best suited to your content and your visitors.  On occasion, they may find that they have no suitable adverts – or their advertisers’ budgets have been depleted and they cannot afford to advertise with you.

At this point, the content owner is faced with either showing the content without advertising, or using house advertising.

House adverts

Most mobile advertising networks will let you run “house ads” at no extra cost.  A house ad is an advert for your own internal products and services.  For example, a newspaper may run a house ad encouraging readers to download their branded Sudoku app or to subscribe to the paper’s print edition.

Running house ads is a great way to show off your own content to your readers.  It is also a low-cost way to deal with NFR.

Mediating networks

Why choose just one mobile advertising network?  Rather than signing a contract with a single provider, it’s possible to use an advertising mediator.

The concept behind mediation is simple, you engage multiple networks to bid against each other for your advertising locations.  If one network has a high NFR you can use another network to ensure that the advertising location is filled.

You can choose which advertising networks you want to integrate with your mediator – and which you wish to exclude.

With most mediation networks, you will still have to sign contracts with each individual advertising network.

There are two potential downsides to using mediators.  First, they may take a percentage of your earnings as commission.  So while you may get more advertising, it may not be as profitable.

Second, you run the risk of duplication.  For example, suppose that your primary advertising network has shown the user a Coca-Cola advert.  After displaying the advert 5 times, the network may conclude that as the user hasn’t engaged with the advert, it’s unlikely to elicit a response and so it will stop showing it – thus generating a NFR. At which point, your mediator will pick another advertising network which will start showing adverts for Coca-Cola.

This is a waste of time for all concerned – and is particularly likely to annoy your users if they are bombarded with the same irrelevant advertising.

Here are some of the major mediation platforms:

• Smaato
• Mopub
• AdWhirl, which is now being integrated in AdMob.

Mobile ad formats

Mobile phone screens vary in size and shape.  That’s why it is important to choose a mobile advertising network which supports a variety of advertising formats.  As well as the “traditional” banner ad – which takes up the width of the screen and usually around 10% of the height – there are several other formats which may be suitable for your content.

Rich media

Taking advantage of HTML5 features allows mobile advertisers to break out of the banner.  When a user clicks on an advert, they are not taken to the advertiser’s site – instead, the advert expands and its contents are displayed in situ.  The user can then watch an animation, view a video, interact with the contents, etc.

These sorts of adverts are popular with users due to their fun and interactive nature, but because they require a modern web browser and a high-powered phone, they aren’t available to all users.

Interstitial

An interstitial advert comes “between” the pages of a site.  For example, clicking on a news headline may take the user to a full screen advert for Volkswagen’s latest car, the user can then click through to their desired content.

Although interstitials have reasonably high engagement rates, they also can negatively impact your brand. Some users find the disruption of an enforced delay to their instant gratification deeply annoying.  Interstitial use should be very carefully tested before deploying.

How much money can a content company make?

By some estimates, the mobile game “Angry Birds” is the most popular way for people to spend time on their phones.  An estimated 65 million minutes of gameplay per day nets the company around US$1 million per month!

It’s relatively easy to construct a formula to estimate the revenue a content producer can expect to receive via mobile advertising.

Let’s make the following assumptions:

Every page on the site has 1 advert.

There’s a 5% NFR.  This is variable depending on your advertising partner and mediation network.

CPC is 10c.  Again, this is highly variable. If your site attracts viewers likely to click on adverts for Rolex watches, this could be much higher.  If your readers are less wealthy, that CPC could be lower.

The click-through-rate (CTR) is 3%.  That is, for every hundred adverts shown, three are clicked.  That’s the industry average – although it will differ depending on sector and the quality of the adverts.

Pages X Fill Rate X CTR X CPC = Earning.

If you have 100,000 page views per month, the formula is:

100,000 X .95 X .3 X .10 = $2,850

This formula contains a lot of assumptions about demographic and advertising partners.  The best way to increase your revenue is to work closely with your advertising partners, let them know the demographics you are targetting, make sure that they understand the areas that you work in, send them whatever keyword data you can so that they can expertly target the advert to the reader.

Finally, none of this works without a sizeable audience.  Make sure your content is compelling and keeps the user visiting your site.

How much are other content providers making?

Naturally, it’s hard to find detailed, commercially confidential information.  The Pew Research Center’s Project for Excellence in Journalism in the US recently published a detailed report into how newspapers are coping with mobile advertising.  It’s well worth reading.

Highlights include a newspaper making $200,000 per quarter from their “non-traditional” advertising – not bad for a circulation of 50-60,000.  Other news providers talk about expecting triple-digit mobile advertising growth over the coming year.

As the world shifts inexorably to mobile, we can expect a larger percentage of revenue to come from users engaging with content on their phones and tablets.

As audiences shift to mobile, if your advertising strategy doesn’t take this into account, you are missing an opportunity.

Choosing a mobile advertising network does not need to be a complex affair.  All good networks will make it easy for your web or app team to integrate advertising into your products.

If, at any time, you feel dissatisfied with the performance or quality, the level of competition in the market is such that it should be easy for you to switch to a different network.

No other company is even close to Google. The survey saw Facebook take second place, having captured 13 percent of worldwide mobile ad revenue in the two years since it began running mobile ads. That means that these two companies alone capture just shy of 70 percent of all mobile ad revenue.

In countries like Bangladesh, Senegal, South Africa, Ghana and Indonesia, a report last year by mobile browser maker Opera found for a majority of internet users in those countries that mobile is the only way people access the internet. Smartphones and simpler mobile phones with internet access might be the primary way that your audience is accessing your website, which is something easily confirmed by looking at your digital statistics packages.

Also statistics show that mobile audiences are younger audiences, and this is just another example of how digital platforms allow you to reach different demographics, rather than simply shifting your current audiences.

Initially, the opportunity to earn revenue from mobile advertising seemed even less than internet advertising, which has seen rates plummet over the past few years. However, as we have seen with the desktop internet, major players have been earning vast sums of money. The challenge for news organisations is that they haven’t enjoyed the same dominance in digital that they enjoyed in print and still in enjoy in broadcasting.

The major internet players are already aggressively growing their mobile advertising revenue and news organisations cannot afford to wait to pursue their own mobile revenue strategies.

Building a staged strategy

The first step is to make sure that you are doing your best to serve mobile audiences. Fortunately, making your sites mobile friendly is now easier than ever with mobile themes and plug-ins for popular platforms such as WordPress and many development frameworks that allow you to create mobile and tablet editions for your sites.

In terms of monetising mobile audiences, while eMarketer looked at global mobile advertising revenue, most news organisations do not operate globally and must instead focus on their local or regional market. You will want to first evaluate where both your consumers and your advertising markets are in terms of mobile adoption. If your consumers have already flocked to mobile but your advertisers are still reluctant, initially, you’ll need a low-cost solution but one that scales as the opportunity grows.

Start with mobile ad networks  – Just as ad networks can help you get a start in paying for the costs of your initial internet efforts, there are mobile ad networks specifically designed to help you begin monetising your mobile audience. mobiThinking has an up-to-date guide to ad networks and a guide on how to choose an ad network, including a list of ad networks by region and country. One key thing they note is that no one mobile network is dominant.

Just as with your traditional internet advertising, you’ll want to develop premium advertising options as quickly as possible. Ad networks can help you with that and as the digital advertising network matures it is rapidly developing premium options and strategies across all forms of digital advertising including mobile.

When you’re developing your mobile site, you’ll want to make sure that you can easily integrate ad networks and standard mobile ad formats.

Explore local advertising opportunities – For local media, there are unique opportunities. Google has found that about 50 percent of all mobile search is local, and that means that often your audience is looking for nearby businesses or services. Local media already have the sales relationships with local businesses, and this can be a great competitive advantage. You’ll want to explore what options mobile allows for targeted local advertising.

With the rapid rise of mobile, advertisers and marketers see a huge opportunity, which means that there is a lot of money pouring into innovation in this space. For instance, in Malaysia, telecommunications provider Maxis has launched a mobile deals service targeted at 15 shopping destinations that will send subscribers to their myDeal service offers when they are shopping. The service doesn’t require an internet connection but instead relies on determining the location of the customer based on mobile phone masts (cell towers). The deals are delivered by SMS.

Tablets offer unique revenue opportunities – When thinking about mobile content and revenue strategies, it is also important to consider tablets, especially phablets – large screen smartphones – such as Samsung Galaxy Note or Asus FonePad. These devices are competitively priced when compared to smartphones and an absolute steal with compared with laptops or large-screen tablets. For emerging markets, this is the perfect option for someone who doesn’t want or simply doesn’t want to pay for both a smartphone and a laptop.

Tablets or phablets open up all kinds of opportunities if they are popular in your market. For one, numerous studies show that tablet owners engage with content almost as heavily as print readers. That’s definitely something to remember when pitching to advertisers.

Of course, advertising in not the only source of revenue to consider. As we noted in our April Digital Briefing, Folha in Brazil introduced a paid-content strategy that charged for tablet and mobile app access. In most markets, tablets are initially bought by affluent members of your audience, and this type of strategy allows you to add a new revenue stream from those who can afford to pay for your content. Note that less than six months after Folha started charging for their tablet and mobile apps, they also added a metered paywall for their website.

Launch a mobile division – As your mobile market grows and the commercial opportunity will support it, larger organisations should consider launching a mobile division to create mobile products and generate mobile sales. The Media Briefing in the UK recently profiled how Norwegian publisher VG has done just that and is on track to dramatically increase the group’s mobile revenue. Norway is a very advanced digital market, but in major emerging markets, mobile use may quickly catch up with developed markets in ways that the traditional internet won’t for years to come.

This staged strategy will help you grow are your market and your organisation develops. However, no matter the size of your organisation or the state of your mobile market, it is an opportunity that news organisations cannot choose to ignore. The major internet players are moving aggressively to dominate in mobile just as they have with the desktop internet, and news organisations must make sure that they do not wait until Google and Facebook come to dominate your mobile market.

Major emerging markets and regions will power the next five years of growth in media and entertainment, and in these rapidly growing markets, growth will come not just from digital but also from traditional media such as television and newspapers, according to an annual media forecast by PricewaterhouseCoopers (PwC).

Globally, digital media will continue to be the prime driver for growth. PwC defines digital revenue sources broadly, including not just advertising but also consumers buying digital content and digital access. The report finds that:

By 2017, digital revenues (including consumer spending on digital content, digital advertising spending and spending on Internet access) will account for 47% of the total, up from 35% in 2012.

However, digital media is not the only growth story in the report. PwC forecasts that eight core markets – China, Brazil, India, Russia, Middle East and North Africa, Mexico, Indonesia, and Argentina – will see growth rates double that of the entertainment and media sector as a whole over the next five years.

And in many of these markets, especially in Latin America and Asia, television and newspapers will contribute to the growth as well a digital.

Key digital trends for emerging markets

It’s hardly surprising that over the next five years digital entertainment and media will continue to power forward. However, dig more deeply into the global, top-line figures, and media leaders in emerging markets can find a lot of strategic insights.

• Classified advertising – Just as they have in developed markets, the report says that “online classifieds are set to take over from their print equivalents in developing economies in the next five years”.
• Search advertising – On Knowledge Bridge, we’ve covered extensively how targeted search and social media advertising often dominates digital advertising. The report says that search will remain dominant with an important caveat. If Google is not a major player in your market, search advertising isn’t necessarily the king of digital advertising.
• Mobile access – The future is not only digital but mobile – and we cannot stress this enough. Emerging markets are playing a huge role in this shift. “Brazil, China, India and Russia alone will account for 45% of fixed-broadband subscriptions and 50% of mobile Internet users by the end of 2017,” the report found.
• Mobile advertising – Do not be timid about embracing mobile because you don’t see the advertising opportunity. “Mobile advertising is finally set to take off properly, with growth forecast across all regions over the next five years,” according to the report, and by 2017, mobile advertising will account for 15 percent of all internet advertising revenues.

Traditional media to continue growth in emerging markets

While digital access, content and advertising will be one of the highest areas of growth over the next five years, growing middle classes in emerging markets will also drive growth in revenues for traditional media including television and newspapers, especially in rapidly growing markets in Asia and Latin America.

Thus far, TV has been very resilient to the digital disruption rocking other media sectors such as newspapers, magazines, music and books. As the PwC reports says, it continues to deliver not only the mass audiences but also the attention that advertisers crave. The next five years will see little change in that. Free-to-air terrestrial channels will continue to deliver the bulk, 70 percent, of TV revenues, only down a few percentage points from the current mix.

Again, the only real news here is that emerging markets will see the fastest growth. Kenya, India, Indonesia, Brazil and Nigeria will see the fastest rise in TV advertising revenues. Indonesia, Kenya, Thailand and Vietnam will see the fastest growth in terms of pay TV subscriptions.

Another important trend that the report highlighted for emerging markets is the opportunities for regional media to reach diaspora audiences. As Jeff John Roberts says in paidContent, tapping into diaspora audiences in mature markets can be a rich source of revenue for emerging market media players. He highlighted this from the report:

As expatriate communities grow, distributors are increasingly crossing geographical borders to address them. Examples include iRoko, which targets the African diaspora in wealthier markets and has more customers in London than Lagos.

Television advertising hasn’t moved online quickly, and PwC thinks that it is wrong to over-estimate the shift from traditional paid TV delivery systems, such as cable, to so-called over-the-top (OTT), internet-carr lanedelivered services. OTT services will remain a small portion, only 6 percent, of paid TV revenues by 2017.

The digital transition has not been so kind to newspapers, and it is important for publishers to note the shift from print to online classified advertising even in emerging markets. However, newspapers will continue to grow over the next five years across Asia and Latin America. Growth in Brazil, India, China and Indonesia will offset declines in newspaper circulation in mature markets such as the US, UK, Japan and Germany.

Leverage data to benefit from the multi-screen shift

PwC painted a picture of a connected but also a confused consumer. Digital has increased consumer choice, but Roberts at paidContent said:

the report (citing people in Singapore who pay for pirated content even though a legal version was available for free) also suggests that the volume of content is leaving consumers “confused.”

With so many choices, customers might be confused, they might be overwhelmed by the options to them, but the level of choice has led them to expect “my media” rather than “mass media”. The future is increasingly one of multiple screens – TV, tablets and smartphones – but this will pose challenges to media companies. To deliver this personalised content and also targeted advertising to consumers, media organisations will have to constantly innovate, especially when it comes to data about their audiences. Again, Roberts pulled this highlight out of the report about the type of data that media companies will need to use:

granular, small data— derived through analytics—that gives insights into customers’ actual and likely behavior in response to a particular message or experience.

It will not be enough to know who your audience is but also what they are likely to do. As advertisers look to increase the return-on-investment for their clients, they will want to know not just the size of your audience and their interaction with your content but also much richer behavioural data. This is why Amazon has just announced that it will be leveraging its vast mountain of e-commerce data to help target advertising.

While paid content has been a major focus in the past year, PwC still sees a huge opportunity for advertising revenue, but media companies will only realise this opportunity if they embrace a multi-platform approach that leverages not only content but also customer data.

Source: Copyright © 2013 by Kleiner Perkins

It is not surprising that internet use continues to grow and that emerging markets are largely driving this growth. However, dig a little deeper into famed internet analyst Mary Meeker’s latest annual report on the state of the internet, and you’ll find several important insights for news organisations as they navigate the digital transition.

Internet tipping point in major emerging markets

While some say that Meeker is merely restating conventional wisdom, if you look closely at the data she provides, she is doing more than stating the obvious.

It is widely understood that emerging markets are powering continued global growth in internet use. However, some of this growth is coming from unlikely countries, such as a 205 percent year-over-year internet growth in Iran, 58 percent growth in Indonesia, 57 percent growth in Argentina and 39 percent growth in Colombia.

Of course, high growth figures can simply indicate growth from a low base, but the other thing you notice in the International Telecommunications Union data that Meeker highlights is that the majority – or nearly a majority – of the population in major emerging markets now have access to the internet.  Now, 49 percent of the Russian population have access to the internet. In Turkey, 47 percent of the population have access and 45 percent of the population of Brazil now have internet access. The explosive growth in internet access in Argentina, now means that 68 percent of the population has internet access.

We don’t have a sense of the speed of these internet connections, but the fact still stands that in many emerging markets significant parts of the population now have access to the internet.

In another recently released report, US computer networking giant Cisco said that by 2017 half of the world would have internet access. To put that in context, in 2012 only 32 percent of the world’s population was connected. The report also predicted that the average broadband speed would more than triple from 2012 to 2017.

The key take-away is that in many emerging markets, internet access is reaching a tipping point, and this will lead to a tipping point in digital media access.

Mobile and tablet growth is booming

Source: Copyright © 2013 by Kleiner Perkins

Mobile internet access continues to grow, now accounting for 15 percent of all global internet traffic. If the current trend continues, mobile internet traffic will soon rise to 30 percent of all global traffic.

Source: Copyright © 2013 by Kleiner Perkins

Mobile internet growth isn’t a recent phenomenon, but Morgan Stanley data showed that smartphone subscribers will grow 31 percent this year. The percentage of smartphones as a part of the total mobile subscriptions varies widely from market to market. Indonesia and Russia only have low double-digit smartphone use as a part of mobile subscriptions, 11 and 12 percent respectively. However, other emerging markets already have much higher smartphone use. For instance, Malaysia, at 35 percent, has a higher level of smartphone use as a percentage of total mobile subscriptions than Germany or Italy, at 29 and 23 percent.

However, the shift to mobile is about much more than the increased use of smartphones. Tablets, most of them based on Apple’s iOS and Google’s Android, have remade the digital landscape in a short time. Android and iOS, whether on smartphones or tablets, have ended Microsoft’s dominance in terms of personal computing.

Source: Copyright © 2013 by Kleiner Perkins

iPad sales grew three times faster than the iPhone, Meeker said, and while that might seem more relevant to wealthy, developed markets, dramatically less expensive tablets based on Android are being developed for emerging markets. Acer has been developing a $99 tablet for the Indian market.

Of course, the line between smartphones and tablets is beginning to blur as so-called phablets win over consumers who don’t want to have multiple devices. Phablets are large screen smartphones such as the Samsung Galaxy Note or the Asus Fonepad, with its 7-inch screen. Analysts say that phablets are set to sell well not only in the Asian giants of China and India but also in the social-media capitals of Indonesia and Malaysia.

For news organisations, the growth of tablets and large-screen smartphones means that in the future it is more likely that your readers will be using a tablet or large smartphone rather than a traditional computer to read your stories, listen to your audio or view your video.

Publishers and broadcasters will want to make sure that their digital content is optimised for these platforms.

Is mobile growth translating into mobile revenue?

Source: Copyright © 2013 by Kleiner Perkins

Last year, Meeker highlighted how advertising on mobile lagged far behind the amount of time that people spent with their mobile devices. However, as she showed this year, not all of the time that people spend with their mobile devices is spent consuming content. In fact, of the 150 times a day that smartphone owners reach for their handsets each day, news, alerts and the web account for only 10 times they check their phones. Attention is very fragmented on mobile devices.

Meeker still sees a tremendous opportunity for mobile advertising. In the US, people spend 12 percent of their time consuming media on a mobile device but only 3 percent of advertising is spent on mobile.

Source: Copyright © 2013 by Kleiner Perkins

This year, she pointed to Facebook’s success in offsetting declining advertising revenue from its desktop users with rising revenue from mobile advertising. This shows both that it is possible to earn revenue from mobile audiences and that the social network will present fierce competition to news organisations for mobile advertising.

The report highlights not only how the digital transition is accelerating in many major emerging markets, it also shows while the future holds incredible promise for mobile media, opportunities already exist. News organisations must now think about mobile when they think of digital.

Russia has seen some of the fastest growth in digital advertising in recent years. Even though the torrid rate of growth proved to be unsustainable last year, digital advertising is capturing more advertising revenue, and the opportunity has attracted international investment in the classified advertising market.

News organisations, both print and broadcast, will need to monitor these fast-moving developments to develop an effective strategy to compete for digital advertising revenue with a range of new competitors.

Digital growth outpaces other media

Advertising continued to grow across most media in Russia in 2012, but while the rate of digital growth slowed, its impressive 35 percent rise year-on-year outpaced other media, according to the Russian Association of Communication Agencies.

Both print and television advertising continued to grow in 2012, but their respective growth rates of 2 and 9 percent was dwarfed by the growth in internet advertising, according to a report in East-West Digital News.

Internet display advertising only grew 17 percent. The real growth in digital advertising was driven by contextual advertising, which includes search advertising. It grew an impressive 45 percent.

In three to four years, it is predicted that digital advertising will capture a third of the advertising spend in Russia, according to a report in Vedomosti.ru. The rise of digital advertising comes at a cost for other forms of advertising. It is predicted that television’s share of advertising will decline from 48 percent to 46.4 percent this year, and print advertising will decline from 13.9 percent to 12.6 percent, according to the Vedomosti report.

Print advertising growth declined from 6 percent in 2011 to only 2 percent, but much of the coverage of the report focused on how internet advertising was cutting into television revenue.

Stanislav Povolotsky, RBC media holding’s commercial director, said that advertisers that had traditionally used television to reach consumers were now shifting to internet advertising, according to East-West Digital News.

In a widely reported sign of the shift from television to the internet, search engine Yandex almost overtook state-owned TV station Channel One in advertising revenue. In 2012, Yandex brought in 28.1 bn rubles, while Channel One earned 28.2 bn in advertising earnings, according to the Wall Street Journal. Of course, Yandex earns one out of every two rubles spent on online advertising in Russia, according to Immanuel Simonsen.

New advertising technologies such as real-time bidding are helping to fuel internet advertising growth in Russia, according to Michael Voschinsky, the managing director of Aegis Media.

Rise in digital ads attracts investment

With Russia offering such promising growth opportunities in terms of digital advertising, the market is attracting foreign investment.

In March, South African media house Naspers, struck a $570m deal to merge two Russian classified sites it owns, Slando.ru and OLX.ru, with their larger competitor, Avito.ru.

According to the Financial Times, the deal would create the fifth most popular website in Russia, with more than 100m page views per day, and the third largest classified advertising site in the world.

The move was seen as the beginning of consolidation in Russia’s online classified market, according to Ventures Africa.

Russia continues to experience rapid internet growth, with the number of internet users growing by a third every year, and the market is developing very rapidly. News organisations, especially print groups, will need to develop strategies to compete for internet advertising revenue or they may face stagnating revenues at best.

News groups will need to invest in audience intelligence in order to deliver better targeted advertising to compete with the contextual offerings of Yandex and the major social networks. Yandex poses a particular challenge to regional and local media as many of its advertisers are small and medium businesses rather than large national or international advertisers, and consolidation in online classified companies will put pressure on local media by chipping away at this lucrative source of revenue.

While search engines and online classified companies might not seem like competitors to news organisations, they will compete head-on with news groups for internet advertising revenue. News groups will need to develop strategies to face these new and growing sources of competition.

For most news organisations, the response to the mobile revolution will be one of distribution, but Cory Bergman, the General Manager of mobile-first news service Breaking News, says that the mobile revolution is about more than distribution. Distributing your content to mobile audiences is a challenge easily met, but media are only starting to grapple with the business challenges. Writing for the Poynter Institute, Bergman said:

The mobile revolution isn’t about design and distribution as much as it is about revenue disruption. … Both Craigslist and Google created new business models enabled by the technology and scale of the Internet. In the same way, mobile is enabling new business models and use cases. Just like the mid- to late 1990s, we’re at the leading edge of the ensuing disruption.

He believes that mobile payments and geolocation, the ability of phones to customise advertising and content based on a user’s location, could disrupt local advertising. “For local media organizations, that has the potential to destroy your business,” he adds.

This disruption is not far off, he says, and he points to the moment where mobile internet use will surpass desktop. If anything, the developing world is ahead of the developed world in this respect. As we’ve pointed out several times here at Knowledge Bridge, for many internet users in Africa, the Middle East and South Asia, mobile internet access is people’s sole way of accessing the internet. In many countries, mobile will dominate, rather than the desktop internet.

This isn’t just about differences in distribution channels. Just as importantly, there are dramatic differences between the business of the mobile and desktop internet. As Bergman says:

There’s a huge gap in advertising yield between desktop and mobile experiences: $3.50 versus $0.75 in average CPMs, according to Kleiner Perkins’ Mary Meeker. Mobile is growing so quickly, the explosion in available inventory is depressing advertising rates.  Ad agencies typically lag demand, which means this gap won’t be bridged anytime soon.

Bergman’s worry is that news organisations’ response to the mobile web will be similar to that of the desktop web: that with such low advertising margins, it would be too easy to focus the business on the desktop web, even though this would ignore a growing segment of the audience.

However, as the news industry is realising with the desktop web, simply applying advertising and revenue models from traditional media to digital media isn’t proving to be successful. The same holds true for mobile media, and the strategies that worked for monetising desktop audiences will not be the same strategies required to monetise mobile audiences. It will take creative thinking both in terms of content and commercial teams to come up with appropriate and successful strategies for mobile.

To develop these successful strategies, Bergman suggests that news organisations consider how the mobile experience differs from the desktop internet. “Mobile is not merely another form factor, but an entirely new ecosystem that rewards utility,” he said. News organisations need to consider how to tap into the high level of social media use on mobile, the opportunities of location both for targeted advertising and targeted content and also the increasing use of mobile payments as potential ways to build this utility and the commercial activity needed to support their mobile efforts.