Monday, January 4, 2010

Excited about Apple's new "iSlate" tablet? But have you talked to your advertising staff yet?

It's the rage of the Internet this morning: David Carr from The New York Times, ComputerWorld's IT Blogwatch, Ken Doctor, Mark Potts all have posts about the upcoming introduction of Apple's tablet/reader to the market January 26th. But, as usual, the talk is all coming from the perspective of media owners, journalists and analysts. Wait 'til they discover that their advertising staffs are skeptical, disinterested, or completely in the dark!

For those of you who have not been following the drama of Apple's product introduction (it is amazing how much free publicity Apple gets prior to a product introduction), here are some of the details:
The new tablet/reader is rumored to be a 10" device that would be a cross between their iPhone and a laptop; it would use a modified version of the OS found in the iPhone, itself a version of OS X, Apple's operating system for the Mac; it would presumably have a touch screen, WiFi capability, and possibly could place phone calls like the iPhone; therefore, it might be a subsidized product (like a cell phone) to drive down the cost of purchase, but force the user to have a contract with a provider like AT&T; finally, it will solve all the problems of both the newspaper and magazine industry (OK, that's being sarcastic, but they certainly are hoping it gives them a boost).
John Gruber has a nice way of looking at what he thinks the Apple's tablet will be:
Do I think The Tablet is an e-reader? A video player? A web browser? A document viewer? It’s not a matter of or but rather and. I say it is all of these things. It’s a computer.

So publishers looking to have their publications read on the new device will be porting those publications to something that would not be a dedicated reader like the Kindle, but to a device that can do many things -- like a computer or an iPhone.

Anyone who has heard my views, or read my posts, knows that I believe that the web and mobile readers are not an offshoot of their print products but represent an all together new medium, and that attempts to simply migrate their print products online or transform them for mobile media are doomed to fail.  The lure of flip books for some publishing execs has been that an outside firm simply grabs their publication's PDFs and transforms them into Flash based online pages -- and at the same time allows them to cut their print circulation in hopes the online readership might make up the difference.  It hasn't worked.

But ad staffs will tell you that these new products are impossible to sell -- at least at any reasonable price. The reasons are elementary: no audience = no sale; and what are the demographics of these tiny new online readerships anyway?

Looking around at the world of B2B publishing it is easy to see that only a minute portion of a magazine's print advertising base has embraced online advertising -- and an even smaller portion has gone mobile or adapted their ads to flip books. There is the usual response that "if we give it away for a while they will eventually pay for it".  Even owners have come to realize, if only out of their own frustration, that this is not happening.

During the last quarter of '09 several big newspapers are expected to report more robust advertising numbers. But how much of this was simply more ad pages around Christmas, and how much was new Internet advertising? My guess is that while the Times might show some online gains, the real upswing will simply be that they have regained some of the print pages they have lost over the last two years.  The recession is beginning to ease, therefore ad pages will slowly increase.

Any new tablet/reader will have some things going for it that web advertising does not: as the iPhone apps have shown, you really can reach a new audience through mobile media -- a younger audience for sure, one that spends less time viewing your product, but the number of downloads and installations are impressive, nonetheless. But we are still waiting for good readership studies to emerge concerning mobile readership on the iPhone or Droid phones versus print.

The other advantage is that "app" based products could potentially create a new revenue stream that somewhat makes up for the loss of circulation revenue. Print folk know that circ revenue barely (or rarely) makes up for distribution costs, so any revenue from selling apps could potentially become a legitimate new revenue source, not just money that compensates for the costs of developing the app.

Everyone seems to have an opinion of what a new Apple tablet will look like. This one courtesy of Gizmodo.

That brings us back full circle to advertising.

Let's look at our crystal ball and see what the world might look like one year from now. Apple introduces a killer tablet/reader in January; Microsoft or another company introduces a similar system around the same time. The world is excited about tablets and suddenly everyone is buying an iSlate (the name some think Apple will use). Publishers, probably led by the same companies that formed the media consortium last month rush to adopt the new tablet.

What does Reed do? Or Penton? Or Cygnus? What about the Foxboro Reporter? Or the Daily Astorian?

When I look at a Reed site, like that for Construction Equipment, I see a rather old fashioned site (narrow, which usually means it was designed to be read on older computers) with no flip book, and more importantly, with only a modest amount of advertising. When I look at their arch rivals, Equipment World, I see a more modern looking site but still with only a modest amount of online advertising. EQ also has flip books (though for some reason the pages do not start at "one" meaning their latest issue is 89 pages in size -- some trick), but no interactive advertising in the flip book. (I'd provide a link, but their flip books force your screed to resize, another annoying characteristic, IMO.)

If major B2B publications are still struggling to sell their online products, let alone their flip books, how is this same staff going to go mobile?

The answer to the conundrum remains the same as always: B2B and newspaper ad execs have to get serious about electronic advertising.

I can hear in my ear the cries of some owners: we ARE serious about online advertising! Yet sales staff reductions or outsourcing sales to independents remain the norm. Everyone knows classified, for instance, has moved online, yet classified staffs have continued to move towards being "small space" staffs (in the case of B2B) or have become staffs that "up sell" online (in the case of newspapers). Few ad execs are willing to concede that their print classified products are dead. Guess what? Newspaper classified began to die long before the rise of Craig's List -- they began to die the day newspapers conceded used car advertising to the trader publications, and resale real estate advertising to the local tabloid publications (often published by the old advertisers themselves).

It may be hard for newspapers to compete with Craig's List, but I've never understood the reluctance of the trade press to take on equipment trader publications online. They seem to be positioned to wipe out the trade publications through inside sales staffs that exclusively sell online.

So are you ready to sell a tablet product? Let's try and be positive. I think some B2B are ready to go . . . if they adapt.

Take a look at the magazines being produced by these guys. Their "back-of-the-book" advertising puts many of their competitors to shame. But their web site, which has a killer URL, is still five years outdated in design, and their online advertising is a little light (I'm tired of using the word "modest"!)

I'm sorry to appear brutal in my judgments, but let's get serious about this: many publishers are not ready for any real move to tablet/readers. They may be able to find a vendor that will transform last month's issue into something that will be display attractively on a new tablet/reader, but they are not in a position to monetize that same product.

And what happens if the new tablets make possible the democratization of publishing the same way the iTunes store opened up the music business? What happens when anyone can be a magazine or newspaper publisher simply by making their product available through an online marketplace similar to the iTunes store?

Today there are hundreds of newspaper and B2B editors and reporters on the street waiting for a new opportunity. That new opportunity may come from a traditional publisher rehiring to meet the new challenges of mobile publishing, or from new competitors jumping into what they see as a brand new market for consumer news . . .  and trade industry news.

1 Comment:

Ken Doctor -- Content Bridges said...

I think you're right to pinpoint much of the publisher success or failure around tablets: advertising. Yes, I agree that most publishers will be slow to adapt both ad formats and sales staffs to the form, but others will -- and I think that will pay dividends in ways that other innovations haven't.

Two reasons for that thought:
---the SI demo gives a glimmer of how the tablet form can offer an immersive ad/selling/commercial community experience;
---digital ad agencies are looking for such experiences for their 2010-2011 investments as mobile/social/video becomes a reality.

Consequently, we might see the development of a new virtuous circle, satisfying advertisers, readers and publishers and that would goose publisher investment and adoption.