Attention measurement (the time spent actively engaging with a page) seems to be a hint of real innovation in this cluttered space of online advertising. If this will change how publishers measure and reward meaningful content rather than just chase after raw clicks and impressions, then not only advertisers are getting a better deal, but also publishers are motivated  to focus on high quality, engaging content rather than volume of content and appealing titles.

A similar effort was initiated in 2012 by IAB to define a “viewable impression” metric. However, attention-based measurement of both content and advertising can be a game changer – both for publishers and advertisers. The Financial Times has already started experimenting with a new way of selling ads based on time spent rather than impressions.

Read more:

Is Digital Advertising Ready to Ditch the Click?

Chartbeat Aims To Move Publishers’ Attention Away From Page Views

Outside Voices: Online Ad Viewability Not Ready For Prime-Time

IAB Viewable Impression Measurement Guidelines

But this is a way in which ‘native advertising’ – a term that first appeared barely two years ago – stands out from many of the latest digital trends: it’s remarkably simple to grasp. Not that this should be in any way surprising. In fact, a cynic would say it’s just ‘advertorial’ resurrected in a digital world with an intriguing new name.

Indeed, native advertising is no wondrous innovation, resting on some form of mystical, proprietary technology such as Google’s search algorithm or Facebook’s social platform. Its origins are humble – and transparent. They lie in every digital publisher’s aims to reverse the downward spiral of banner ad CPMs (a result of heightened competition as well as format standardization) by introducing bespoke advertising propositions to maintain a direct sales relationship with agencies and brands (at a time where the rise of programmatic transactions threatens access) and to shift effectiveness metrics from (often dreadful) click-through rates to more ‘editorial’ indices such as page views or time spent.

At the same time, publishers (think they) are addressing advertisers’ chronic concern about ‘banner blindness’ and ad blockers, as well as brands’ perennial wish to be ever more closely associated with journalistic content. Finally, more by accident and less by design, native advertising is a ‘platform agnostic’ format, in the sense that, unlike banners, it migrates seamlessly to mobile (either in a responsive design or m-optimized approach), which is where an increasing portion of publishers’ audience is moving.

Advertisers appear to be increasingly considering or endorsing the ‘native’ approach – OPA/Radar Research data show that 32% of Chief Marketing Officers have bought or are planning to buy native in the next six months – and yet the fundamental questions remain unanswered. Will native advertising prove to be a tectonic shift in online brand marketing or will it be no more than a fad, a practice soon to revert to the niche market share of the advertorial? And if it does indeed flourish and continue to rise, who will benefit most and what can publishers do to develop and sustain a competitive advantage?

The simple truth is that native advertising is still beset by scale issues which at best can be considered teething problems. First, despite encouraging steps by the Interactive Advertising Bureau, there isn’t yet any substantial or extensive standardization of formats, with the gamut running from grand custom productions at one end to simple, almost rudimentary ‘newsfeed’ offerings at the other. Second, no uniformity (or, sometimes, transparency) in pricing exists, whether this concerns fixed or variable (e.g. per article views) rates or a scale element depending on article length and/or use of multimedia. Finally, there are no commonly accepted appraisal metrics, making it difficult for advertisers to justify a major investment in an activity that they don’t know how to measure effectively.

Still, elements of native’s value are becoming increasingly apparent, especially on the consumer side. IDG Media research found that consumers viewed native ads 52% more often than banner ads (specifically, 4.1 times per session vs 2.7) and a quarter more of consumers look at in-feed native ads rather than standard banners (25% versus 20%). At the same time, one in three said that they would share a native ad with a friend versus one in five that would do the same with a banner ad.  Findings such as these make most pundits conclude that the issues native advertising faces in its embryonic stage are reminiscent of the early days of the banner ad about two decades ago. Just like native today, banner ads then did not have standardized formats, were priced in various (frequently inconsistent) ways, were often built by the publisher to assist the digitally-curious advertiser and had no real effectiveness metrics to be appraised against.

And yet, the fact that all this was resolved as the industry developed and matured is not the main factor pointing to native’s potential. What emerges as critical is the simple fact that the giants of social media, Facebook and Twitter, have endorsed and amplified it – particularly in their mobile offerings – to the point that it is the dominant format, absorbing more than US$1.5 billion last year. In fact, the fundamental point here is that an entire new generation of internet users – those that predominantly have these social media platforms as ‘home pages’ from which they snack content, play games and communicate with their friends – are getting accustomed to this form of (often targeted) advertising and consider it increasingly a natural part or extension of their user experience.

However, if all of the above point to native advertising being a substantial trend, they do not necessarily clarify who – beyond Facebook, Twitter et al – can benefit from it. Nor do they point to a specific ‘best practice’ policy framework for publishers to implement and profit from, and that is indeed a pity as native advertising is an area where publishers could have a relative edge, given their wealth of content and the quality of their brands. In fact, an optimist may argue that, in particular, context-based native advertising could prove to be premium publishers’ answer to search advertising:  a well-placed commercial message blending naturally with an express user preference (targeted editorial content, e.g. a specific article, on the one hand, a keyword on the other).

The first steps towards introducing native advertising rest on three main pillars. But note that any native ad strategy should be based on an initial low-key, scalable approach. Not only because native, despite current trends, may not prove to be the game-changer that some predict, but also due to the fact that it is a practice that can be ratcheted up as demand evolves. The other critical precondition would be a clear, consistent and transparent policy with regards to (conspicuous) labelling: not only is this an absolute necessity in terms of respecting one’s readers but it also addresses criticisms about ‘grey’ advertising. Having assured this, besides sales and marketing, starting with a design and front-end developer as well as a couple of digitally-savvy journalists will do.  Once (or if) advertisers are queuing outside the publisher’s offices, then a ‘Content Studio’ à la NYT or WSJ is the next logical step – but not before.

The principal pillar for native advertising is a segmentation of the sales proposition into three broad offerings, namely:

• A standard ‘newsfeed’ offer, available in (a maximum of) three formats and priced transparently either on article length/features (e.g. photo material), on the time that the story resides on the home page or even article views – though the latter would be less advisable as it puts unfair onus on the publisher for the native ad’s performance. This offer should be marketed heavily in cases where mobile is appealing to the advertiser (e.g. if the product concerned aims at a younger demographic, as they tend to have mobile as their medium of choice) as it migrates into handheld devices in the most seamless manner.
• A ‘reverse engineering’ offer – such as Forbes’s BrandVoice – that provides advertisers with their own editorial page to which they can upload clearly labelled, relevant content under the publisher’s masthead. Not all publishers have the clout to convince brands of the benefits of publishing on their sites, nevertheless it is a highly lucrative approach as it scales perfectly, requires very few resources and is usually priced on a monthly (and often hefty) flat fee.
• A ‘customized’ offer whereby brands are presented with, or ask for, creative ideas as well as execution from the publisher. This is mainly where the aforementioned digitally-savvy journalists come in, usually with a background in ‘brand-friendly’ consumer magazines, to deliver premium propositions that are showcases of high value. These customized solutions can be generators of significant income for the publisher, especially if video material is part of the offer and the ‘native’ piece is pushed (again, clearly labelled) to the social media fan and follower bases of the editorial brand.

A second pillar in getting started with native is a clear segmentation of the advertiser market so that different offers cater to distinctly different communication needs and preferences. This should be centered on two clusters:

• Companies that have a regular flow of press releases to distribute to media, e.g. banks, insurance and telcos. These companies usually hire PR agencies to do the spinning or ‘persuading’ of journalists, usually (regrettably) successfully given the shrinking editorial budgets most newspapers have had to cope with. The ‘newsfeed’ offering alleviates such commercial pressures while bringing transparency and revenues to the publisher.
• Companies that would like to engage more deeply in content marketing. This is where the larger, bespoke productions can be most effective for the brand – and lucrative for the publisher. The publisher’s specific targets would depend on its audience and editorial context, e.g. fast-moving consumer goods and entertainment for the younger demographic, or fashion/beauty for female readers, or health for the older demographic.  However, the prime candidates for such projects are companies involved in major Corporate Social Responsibility activities, as these endeavours often have a content dimension and, at the same time, are particularly difficult to convey through a simple advertisement.

The final cornerstone in terms of an initial publishing strategy on native advertising may prove to be the trickiest and most elusive: alliances. Publishers have a horrid record of coming together (be it in a joint operating agreement or a full-blown joint venture) in business enterprises to try to address a common threat or opportunity, usually to create scale which, especially in digital marketplaces, can prove critical. Finding successful shared publishing endeavours is more the exception than the rule. However, in the case of native advertising, it may well emerge as an imperative: large portals (e.g. Yahoo!) are also starting to invest in native and, at the same time, firms such as Simple Reach, Native Lift and Nativo are coming to the fore as placement networks. There is thus a real risk that scale and the inevitable standardization will lead to commoditization and therefore loss of pricing power, whereby reach will again be the strongest asset.

What can publishers do, at least at a national level, to avoid such a scenario? Their pre-emptive response should be three pronged. To begin with, they should be the first to pursue the ‘race to scale’ and, possibly via industry bodies, take the initiative to set format standards (particularly for the ‘newsfeed’ offering) before portals and aggregators do. An ‘ethics’ corollary of this would be standardized disclaimers, concerning separation of editorial from commercial messages. Second, they should actively engage with advertisers – again, more likely than not at industry level – so that performance metrics are agreed upon and these express also the publishers’ viewpoint, often ignored in a buyers’ market like online display advertising. Finally, they should undertake a joint research effort that aims to prove that native advertising is much more effective when residing on original content sites, rather than any content page. The UK’s Association of Online Publishers (AOP) did just that two years ago by contrasting branding metrics for campaigns that run on premium content sites versus those that rely only on social media.  Findings ranged from encouraging to impressive and there is no reason to think that they would be different in the case of native.

In short, publishers are particularly well-placed to take advantage of the growth of native advertising. Indeed, it’s bound to come as a relief to the industry that finally a form of digital advertising has emerged that values the quality of the brand, its tradition, heritage and news values, as well as the original content that is being created on a daily basis. In addition, the first steps to get a functioning native advertising operation going are not too complex or expensive.

It would be an immense pity if the chronic fragmentation – which is often a euphemism for divisive bickering – of the publishing industry again proved to be the main culprit for another missed opportunity. There won’t be many more.

The two charts above may seem contradictory. Yes, global online ad expenditure has multiplied tenfold since 2004. Yes, digital spend will surpass the printed press worldwide (in many countries, it already has) in 2015. But despite this impressive turnaround, the newspaper industry still gets most of its rapidly diminishing advertising revenues from print, not from digital. Indeed, many traditional news brands have reached huge audiences online but just a tiny amount of the global digital ad revenue cake. Why is that? Just a lack of vision, or is it an unfinished digital transformation?

The advertising paradox

The slow transformation to digital has indeed played a role for many traditional media, but unfortunately it is not the main factor behind this paradox. The most important cause is competition and this cannot be fixed. Media have moved from a world where ad revenues were shared among a very small bunch of papers, TV and radio stations in each country to a world of limitless competitors, from the huge new arrivals like Google or Facebook to the myriad bloggers. It’s almost a perfect market, awash with inventory, that is now getting even more ‘perfect’ with the development of programmatic buying, where machines (not fallible or emotional humans) match supply and demand in real time.

The laws of economics are ruthless. With an increase in competition/supply comes, inevitably, a decline in prices: so digital advertising has always suffered and will always suffer downward pricing pressure. This is why news outlets all over the world are searching with renewed passion for complementary revenue lines. And the main focus is now on ‘user generated revenues’, either traditional revenues based on editorial content or revenues based on new services.

Revisiting ‘editorial revenues’

Only five years ago, almost every news outlet in the world was banking on an open-web-pure-advertising-revenue model. But the global economic downturn and the low prices of digital advertising described above convinced many of the dangers of ‘single crop farming’ in digital. Only two international business brands – the Wall Street Journal and the Financial Times- were previously pursuing a subscription-based model, based on the exclusivity of their contents and the predominance of companies among their customers: WSJ as early as 1997 and the Financial Times 10 years later. But it was only in 2011 that a major general news property, the New York Times, dared to put its contents behind a paywall.

Three years later, the NYT has grown to 760.000 digital subscribers, an impressive number that has encouraged many to follow suit, even if The NYT’s journalism and singularity are difficult to match. Just in the US, there are already 450 national, regional and local news outlets (out of 1,380) that have introduced a digital subscription model according to the Pew Research Center. Are the models all the same?

No. Indeed, the discussion around ‘paid content’ and its presumed nemesis the ‘open web’ became so heated (creating two quasi-religious factions), that no one wants to talk about ‘paywalls’ any more. The forbidden word, as in Harry Potter’s ‘Voldemort’, is now replaced by ‘membership’, ‘club’, or anything else without ‘pay’ in it. And in most cases the offer does go beyond a pure payment for contents, offering users access to extra services, apps or discounts, and – of course – a special engagement with their favorite news brand. In any case, all offers include one or many of the following features:

• Hard paywall

It’s the oldest and usually simplest mechanism tried by publishers online. Users can only visit the homepage for free (sometimes also the sections’ homepages and/or ‘soft’ contents like photo-galleries), while most of the content online is reserved for subscribers. This was the system used by the Wall Street Journal in 1997 (now, fine-tuned) and by some general news big brands around the world at the turn of the 21^st Century, like El País in Spain in 2002. But most of them reverted to open websites after a disastrous drop in audience and very limited digital subscriptions. Surprisingly, Rupert Murdoch announced and put in place a hard paywall at The Times of UK as late as 2010. Last year, The Times and The Sunday Times totaled 130,000 digital subscribers, with a massive fall in online traffic (also affecting the paper’s audience) of more than 60% and a similar drop in digital advertising revenues.

• Soft paywall/Metered paywall

Introduced in 2007 by the Financial Times and popularized by The New York Times in 2011, this scheme tries to ‘square the circle’ of subscriptions and advertising revenues. The idea is to design a paywall that is porous enough to allow a very big number of free visits (and, therefore, a large enough digital advertising inventory), but not too much so as to discourage subscriptions.  The logic behind the system is the fact that loyal and very active readers are more willing to pay than casual users – though the latter massively outnumber the former. So the system relies on a ‘meter’ counting the number of times that a user visits the site and, from a set number of visits per month, the paywall pops up asking the user to log in or subscribe.

The Financial Times launched its paywall with a limit of 10 visits per month, excluding the homepage that is always open. Four years later, The New York Times took a much more cautious approach, because it had a much larger audience and advertising revenues to loose, and because the ‘exclusivity’ of a general news outlet is always more questionable than that of a financial one. So, the Times opened the limit to 20 free visits per month, excluding homepages and photogalleries which are always open. And to allow the virality of the internet to continue its magic (the main ‘collateral damage’ of paywalls), the NYT decided to keep access open to any visit coming from search engines and social networks.

All in all, this metered paywall only reduced the number of online visits by 5% and page views by 10% when it was launched. And to the surprise of many who thought this was too open an approach,  the number of digital subscriptions grew to the current 760,000. In the meantime, the NYT has reduced the number of free visits per month to 10 but, on the other hand, has completely opened access to video, whose ads are especially lucrative, and to some areas of content outside the US, where the rate of loyal users is lower. Indeed, the key to ‘metered paywalls’ is precisely this: they give publishers the ability to tweak the system on-the-go, depending on usage results and the need for inventories.

Ever since the NYT launch, hundreds of news outlets worldwide have introduced a metered paywall, including titles as different as The Telegraph in the UK, Folha de Sao Paulo in Brazil, The Onion in the US and El Mundo in Spain. Most are very recent developments, so we do not have meaningful numbers yet, but it will be interesting to see whether they are able to reach similar conversion rates to such an iconic brand as the NYT and whether they also manage to keep advertising revenues almost untouched.

• Freemium model

Freemium models are almost as old as the basic paywall. Their logic is straightforward: you cannot charge users for the same contents you were offering for free just before. So the basis is to keep the existing web open, while creating separate contents and/or products only for subscribers; i.e. a Free area + a Premium area. Indeed, this is a very typical model for software or mobile apps, which provide a basic service free of charge and a paid premium for accessing advanced features.

Many media outlets, old and new, have tried this model, including the New York Times previous ‘Select’ offer, Le Monde, Slate (very recently) and even the champions of the open web, The Guardian, with its premium tablet and mobile apps only for subscribers. But many ditched this approach after trying it out because it didn’t trigger a large number of subscribers (most users are fine with the free part) and because it usually involves an extra effort/cost from the newsroom or the publisher to create additional content/services for the premium area.

• Membership

Membership usually brings a set of advantages to the subscriber in addition to the editorial contents of the publication – such as free or discounted prices for conferences, exhibitions, theatre and concerts; or special events with the newsroom, etc.) to make him/her feel like they are a member of a ‘club’. As noted above, most paid offers from publishers – be they paywalls, freemium models or some other form – are also marketed as memberships. The emotional and ideological link with the news brand is indeed one of the – if not the only – most important factors for readers entering a paying scheme. Importantly, the New York Times realized recently that users respond better to a marketing campaign focused on the survival of the quality journalism they represent, than to other campaigns focused on the many features and advantages of their offer.

New media properties also use this emotional link with their readers/users as a key to their survival. New brands all over the world are being launched thanks to crowd-funding campaigns among their potential readers: people willing to pay to enjoy the type of journalism the brand promised. And many of them are inviting these readers to become subscribers or ‘members’ as a way to avoid a heavy reliance on advertisers – especially dangerous for small companies – and to support independent journalism. As the new Dutch kid on the block, ‘De Correspondent’ (famous for raising more than 1 million Euro of crowd-funding in eight days) put it: “De Correspondent is a commercial, for-profit enterprise, but our business model focuses on selling content to readers, rather than selling readers to advertisers”.

Beyond publishing

‘Diversification’ is the magic word for many media groups searching desperately for new sources of revenue in addition to advertising and to the – always challenging – paid content. The logic behind this model is: if I have a trusted brand and X hundred thousand – or even million – users visiting my website every day, I may be able to offer them other services or products endorsed by my brand. This way, publishers can leverage their own media power to build new businesses more or less connected to the editorial, instead of always relinquishing this to advertisers.

Given the difficulties of moving from the publishers’ trade to the service providers’ or retailers’ one, media groups are typically partnering with specialists or even buying their way into these new businesses. The two most widespread diversifications are online services and e-commerce.

• Services

Many publishers worldwide have been offering ‘collateral’ online services to their readers for more than a decade. Indeed, some of these services – such as classifieds – were a regular and very lucrative offer on print papers, and it was a natural transition to exploit them online too. The main difference between media players has been the size of their stake in this market, and their speed to approach it. While some news outlets have been particularly slow and cautious to enter the online business (for fear of harming their declining print product), others have been fast and assertive. In markets where supply of these services is mature, the late entrants are struggling to earn decent incomes from their affiliations with big players, but those who got in early are earning very significant revenues from their own fully-fledged operations. In some cases, much more than their revenues from the editorial business.

The Nordic champion Schibsted and the German group Axel Springer have been the most bullish in this diversification, and not surprisingly they are also the two European players with strongest digital revenues. Schibsted began as early as 1999 to position itself very aggressively in the online classifieds business in Norway, then bought start-ups in Sweden, France and Spain that are now blockbusters in their respective markets. Today they are shopping for a second round of personal finance services websites all over Europe to replicate the feat.

Springer initiated its diversification a little bit later, 2005, buying startups also in classifieds, affiliate marketing, price-comparison and women’s communities. In 2012, the German group was already earning more revenue from its digital operations than its print publications (that includes the 3 million daily copies of Bild!). A little bit further behind, the Guardian Media Group also relies on its dating and jobs classifieds online services for more than half of its digital revenues, and has recently sold part of the family silver – its 50.1% stake in Autotrader – for more than £600 million to finance its money-losing editorial operations. Last year, Autotrader made £252m in revenues and £32m in pre-tax profits.

• E-commerce

“Retailers have been very good at being publishers for a long time, it’s time for publishers to be good retailers,” the commercial director of the Daily Mail Group, Marcus Rich, said last year. DMG consumer media division is undoubtedly pushing e-commerce as a key strategy for the Daily Mail brand extension; they already make £5 million in direct cruise sales alone. Pure players like Gawker Media are also keen to run this race and, according to its founder Denton Memo, will make around 10% of their digital revenues from E-comm this year. Even media power houses like the Italian RCS-Corriere della Sera are swiftly moving from taking their first steps in e-commerce (selling ‘extended editorial content’ such as books or movies) to the second step (partnering with retailers around editorial topics such as travel or beauty) and even third steps (integrating pure e-commerce offers in the editorial content), according to RCS’s CDO, Alceo Rapagna.

But most publishers are still in the early infancy of an e-commerce strategy, even if they consider it important.  According to a Forrester Consulting survey of 106 media companies in December 2012, more than 70% thought that having an online store was important, and about the same number said that having a separate deals site was important too. Indeed these two options were ranked third and fourth for driving audience and revenue only after an ‘Advanced website functionality’ and ‘More online advertisers’. But 30% of them added that they didn’t have the budget for adding real e-commerce. Are we in Year One of e-comm for publishers, just as 2000 was for services?

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.

• The Seminar presented the following topics:“Technology Platforms & Decision Criteria”.  The presentation outlined the key decisions involved in selecting and maintaining web platforms.  The presenter discussed the pros and cons of in-house versus outsourced development as well as proprietary versus open source software.  Detailed decision criteria are recommended.  Because of the importance of the Content Management System, the presentation closes with a comparison of the three open source CMS platforms – Drupal, WordPress, and Joomla.
KB Seminars: Working with Technology – Platforms; 10/13 from MDIF
• “Product Management Roles and Responsibilities”.  The presentation focused on the role of product management as a ‘translator’ between the needs of users and technology’s ability to deliver web products to meet these needs.  In particular, the seminar outlined key elements in a business plan and product specification.  Examples of online and software products used to support the product development and bug tracking processes are also included.
KB Seminars: Working with Technology – Product Management; 10/13 from MDIF
• “Opportunities in Online Advertising”.  The presenter detailed the elements of online advertising standards including pixel dimensions, file size and other graphic requirements.  The discussion outlined new trends in online advertising targeting including behavioral and contextual targeting.  The rapid emergence of real-time bidding or programmatic buying and its key components is also introduced with specific examples and a summary of companies working in the Russian/Ukrainian market.
KB Seminars: Working with Technology – Advertising; 10/13 from MDIF
• “Development Metrics: Measuring Your Site for Improvement”.  This section presented a model for online metrics including examples of data sources and calculations.  Three types of metrics are discussed.  Foundation metrics provide basic audience behavior (visits, page views) and audience descriptions (location, gender, etc.). Key Performance Indicators (KPI’s) are discussed in terms of developing measures that assist in making business and content decisions to optimize websites for traffic or revenue.  Finally, tactical measures like A/B testing and heat maps are introduced as techniques to acquire specific information to make tactical decisions about a website.
KB Seminars: Working with Technology – Metrics; 10/13 from MDIF
• “Website Hosting Fundamentals”.  The Seminar presented the key types of hosting, their different uses and recommended criteria for selecting hosting methods and vendors.

The Seminar aimed to provide media managers with decision-making and management techniques for working with technology including content management, advertising and ad serving, and metrics systems.

Location: Moscow, Russia

Dates: 9 – 10 October 2013

Attending:  Russian and Ukrainian Technology, Product and Commercial Managers

Educating advertisers

It is one of the paradoxes of digital journalism that increasing the size of your audience doesn’t always result in higher income. Some of that disparity can be attributed to the fact that while advertisers want to shift their advertising budgets from offline media to online media, they also need to learn about the opportunities, Chia said. Educating advertisers about the possibilities of digital advertising is an important first step in building an effective and revenue-earning premium advertising strategy.

Educating advertisers starts with producing rate cards and media kits to fully introduce their site to advertisers. One of the key messages is that digital advertising is not a blind mass campaign, she says. Online advertising is about about measurability and being able to target specific audiences. She said:

You need to have a demographic breakdown (of the visitors to your site). That is the main product you can use to attract advertisers and convince advertisers to come and buy advertisement on your website.

To deliver better targeted and better performing digital advertising campaigns, publishers need to invest in technology that allows them to build a demographic profile of their audience. Malaysiakini has detailed information about the age, income and education of their audiences. They have information about the interests of their audience, such as whether they are into automobiles or online banking. All of this data, which is included in their media kits, provide essential demographic information to advertisers so they know who they can reach by partnering with the site.

In addition to printed media kits, Malaysiakini also has an advertising blog which provides further information about advertising packages and advertiser-focused events. These events and conferences are another way to educate advertisers and communicate to them the opportunities they have with digital advertising.

“We actually have a new media school. We discuss different topics, and we invite advertisers, agencies and advertising department staff,” she said. They sometimes charge for these conferences, particularly when they have high profile speakers who bring expertise in digital advertising campaign measurement, models and services. Some conferences are on very specific topics such as how to use measurement tools like Google Analytics.

Premium advertising strategies

One of the factors contributing to the challenge that news organisations have faced in earning advertising revenue from their digital audiences has been downward pressure on digital advertising rates. Many early stage news websites are reliant on advertising networks for their ad strategies, but falling rates over the past several years have made it difficult for news sites to earn enough revenue from digital advertising alone to cover their costs. Malaysiakini earns less than 10 percent of its advertising revenue from ad networks. Instead of relying on ad networks, they have developed premium advertising strategies based not just on the richness of the demographic data but also on providing new ad formats that appeal to advertisers.

Malaysiakini charges premium rates for premium placement on their site. “It is usually the top spot, and it has very high engagement and is very creative,” Chia says. Malaysiakini does not put ad network slots on the top of their pages because it would undermine their efforts to charge higher rates for those slots.

Premium buy advertising is sold by their own in-house sales team, and the premium pricing is for advanced campaigns. Companies allocate a lot of money to premium campaigns, she said. This is where the demographic data of their audience is key in convincing advertisers to pay more, not just for premium placement but also to reach specific audiences.

Chia says that you also need to have flexible site designs to make sure that audiences don’t suffer from “ad blindness”. Ad blindness occurs when publishers have fixed spots and formats for their advertising. After a while, audiences simply learn to ignore these areas of the site.

Be nimble

News publishers need more than just flexible designs. They also need to be nimble to keep pace with the rapid changes in digital advertising. Real-time bidding is coming to markets like Malaysia. As we’ve written about before, real-time bidding, also known as programmatic or algorithmic buying, uses site visitor data to buy, sell and display highly targeted advertising. Publishers are concerned that real-time bidding, or RTB, will put further downward pressure on advertising rates.

“RTB is one type of ad network,” Chia said, adding, “your ad will only appear to your target audience. … (RTB) is not a blind network but a highly targeted network.”

She gave the example of two computer companies, Acer and Toshiba, trying to sell their laptops. They will enter their bid price, and Malaysiakini will enter their floor price, the minimum price they will sell their advertising for. If the companies bid over the floor price, and if the target demographic visits the site, their ad will appear.

There are concerns that RTB will affect their premium ad strategy, but in this industry, when everyone launches a new technology, “we cannot escape from the new landscape,” she said. “We need to be part of it.”

Email marketing seems so low-tech, but it is enjoying a resurgence because it is inexpensive and, if done well, it works.

In an article on technology news site Wired, highlighting an “email newsletter renaissance”, former Hufftington Post Chief Technical Officer Paul Berry said:

As much as we’re told e-mail isn’t sexy, no one sends more e-mail than Facebook or Twitter, and the reason they do is we’re all on e-mail and it brings you back.

An email marketing success story

Two years ago, the Foundation for New Journalism in Iberoamerica launched a programme to provide technical and commercial skills to the rapidly growing number of news and information start-ups in Latin America. As part of this programme, 10 start-ups were chosen “based on their journalism and ethical standards, and their potential for growth” to take part in an entrepreneurial journalism programme.

The results were impressive leading, on average, to an 80 percent increase in site visits across the start-ups, according to James Breiner, writing for IJNet and News Entrepreneurs.  A Salvadoran sports site was a standout success:

El Salvador FC, a soccer website, increased its total visits by 264 percent to more than 1 million by employing a series of strategies, such as updating news at least 10 times a day, promoting news through email and seeding its news in other blogs and web pages.

Obviously, email was part of a broader strategy of regular updates and a wider social media campaign, for example, successful Facebook campaigns drive about 20 percent of the traffic to the site. But you don’t have to choose between email and social media – an effective digital marketing and engagement campaign can and should use both.

It is also important to point out that simply building audience doesn’t guarantee sustainability; despite its success with increasing traffic, El Salvador FC is not yet profitable. However, as the site works towards the break even point, its email and social media strategy has added audience with low costs, although it is time intensive. El Salvador FC founder and editor Carlos Lopez Vides said:

This type of marketing costs us nothing but does require a big time investment. It recognizes the power of the users to share and recommend the product. We, the editors, have to empower the users to maintain their interest and support.

As Lopez Vides says, email marketing is inexpensive. A study in the UK found that it a fraction of the cost of other marketing methods such as direct mail or telemarketing. It was even cheaper than SMS marketing. The same study found that it also had a higher response rate than direct mail or internet advertising, although lower than direct mail or SMS marketing.

How to create a successful email campaign

Just as with your digital strategy in general, data will be key to the success of your email newsletter marketing efforts, and with the renewed interest in email newsletters as an audience building or marketing tool, we have access to data on best practices even before you start.

Email marketings software company GetResponse analysed 21 m messages sent during the first quarter of 2012 to determine the best open and click through rates and also the highest engagement times. The analysis found (emphasis theirs):

One of the most important conclusions is that sending newsletters during readers’ top engagement times of 8 a.m. – 10 a.m. and 3 p.m. – 4 p.m. can increase their average open rates and CTR by 6%.

However, they also point out that you need to analyse your own data to make sure you understand how your subscribers behave.

Another factor that can affect open rates is the subject line of your email. Another newsletter service provider, MailChimp, analysed 40m subject lines to see which ones worked best. They even have a tool that will give you a rating of words used in your subject line based on historical response rates. They compared the best performing subject lines, email newsletters that were opened by 60 to 87 percent of recipients, versus the worst performing subject lines, those that were only open one to 14 percent, and they found:

On the “best” side, you’ll notice the subject lines are pretty straightforward. They’re not very “salesy” or “pushy” at all. Heck, some people might even say they’re “boring.” On the “worst” side however, notice how the subject lines read like headlines from advertisements you’d see in the Sunday paper. They might look more “creative,” but their open rates are horrible.

That doesn’t mean that you can’t be creative in your subject lines, but their research found that it was all about expectations. “The best subject lines tell what’s inside,” they said.

Fortunately, email newsletter software such as GetReponse and MailChimp has become increasingly sophisticated, allowing you to do A/B testing. This feature allows you to test the performance of subject lines or delivery times, for example, Mailchimp will send the same email using two subject lines to a small percentage of your list, then automatically sends out the email with the best performing subject line once the trial period has ended.

Marketing your paid content offering

Email registration for newsletters has also been used as part of a paid content revenue strategy, allowing those who register to access premium content on your site.

As digital advertising rates dropped, publishers have used email newsletter signups to gain more information about their users, which they use to deliver more targeted advertising and as part of the marketing strategy for their paid content offerings.

British magazine publisher IPC offered email newsletter subscribers access to ‘certain content’ to entice readers to sign up for newsletters or register with sites, says The Media Briefing. Once IPC has an email address, it works to gain even more data about these users so that they can tailor marketing messages about subscriptions and paid content options.  It is a typical funnel marketing strategy.

Email marketing may seem simple, but successful news organisations and media companies are using it in incredibly sophisticated ways as a means to increase their audience and audience engagement and also as the first step in marketing their paid content offerings. The key is to make sure that you’re taking advantage of all of the tools that modern email marketing software delivers so you can get the best results.