State of the Industry: Monetizing theDigital RevolutionMalcolm NetburnChairman and CEOCDS Global[@mnetburn]
2
About CDS Global600 millionoutbound transactionsprocessed annually208 millionemailsdeployed annually150 millioncustomersma...
Access the New Report:Monetizing the Digital Revolution, 3rdEdition• The third edition of the report isavailable on www.cd...
Key Insights & Findings1) Continued Strong Digital Revenue Growth is Expected for 2013, Especiallyfor Consumer PublishersC...
Key Insights & Findings, continued4) The Top Two Digital Revenue Streams Account for Only Half of TotalRevenueWebsite adve...
Top Goals & StrategiesAll Consumer B2B1) Increase digital and online profits 70% 70% 72%2) Increase online, digital circul...
Digital’s Percentage of Total GrossRevenue 2012 & 2017 ForecastAll Media Companies & PublishersConsumer OnlyBusiness-to-Bu...
Digital Gross Revenue GrowthRates 201217.7%13.7%11.7%All Media Companies & PublishersConsumer OnlyBusiness-to-Business Only
Digital Gross Revenue Growth Rates2013 Forecast23.2%17.2%14.2%All Media Companies & PublishersConsumer OnlyBusiness-to-Bus...
Digital Revenue Breakout byRevenue StreamTop 5 Revenue Streams % of Total (Out of 100%) All Consumer B2B1) Website adverti...
Are Digital StrategiesFully Developed?
Digital Customer RelationshipFunction OutsourcingOutsourced Both In- House &Outsourced In-House NAeCommerce, web stores 21...
Who’s Driving the MostIndustry Change?All Consumer B2B1) Technology Device Makers 50% 48% 50%2) Readers/Subscribers/Conten...
ConclusionThere is Still No Industry Consensus on Key Digital Strategiesor Business Models•There is no agreement on the be...
Driving Digital GrowthKey Finding of the Study23% top-linegrowth isforecastedfor digital grossrevenue in 201317% increasef...
5 Quick Steps to DriveDigital Growth1. Optimized Customer Acquisition Pages2. Mobile-Optimized Customer Care3. Gated Conte...
1. Optimized CustomerAcquisition Pages
2. Mobile-OptimizedCustomer Care67% of users are more likely topurchase a product from amobile-friendly site− “think with ...
2. Mobile-OptimizedCustomer Care• All companies with anonline presence shouldoptimize their Webpages for mobile access• Mo...
3. Gated Content & Pay Walls
4. Tablet Customer Service2013 has been coined as theyear of the tabletaccording to PC MagazineSource: Will 2013 Be the Ye...
4. Tablet Customer Service• Publishers must be preparedto handle technical customerservice inquiries related todigital edi...
5. Consolidated Digital Reporting• Growing market of digital content• Rising number of digital newsstands• Many digital ed...
5. Consolidated Digital Reporting
To Conclude1. Optimized Customer Acquisition Pages2. Mobile-Optimized Customer Care3. Gated Content & Pay Walls4. Tablet C...
27We are in a period ofWe are in a period ofCreative DestructionCreative Destruction
28Over the next 10 years, one ofthe main effects of the greatpublishing realignment will bethe deep-rooted changeexperienc...
Big Picture Technology ChangesThat Affect Digital Media• Connectivity• Mobile Computing• The Social Web29
Connectivity•1/3 of the world population now online•Like electricity – always available, always on,instantaneous in its ef...
Connectivity – The Numbers•Internet users– 2.4 billion – Number of Internet users worldwide– 1.1 billion – Number of Inter...
Big Picture Technology ChangesThat Affect Digital MediaMobile Computing•Tablets will surpass desktop within two years•Tabl...
Mobile Users EclipseDesktop Users in Two Years33Global Mobile vs. Desktop Internet User Projection, 2007-2015
Big Picture Technology ChangesThat Affect Digital MediaSocial Interaction•Facebook – used by 1 of every 10 people; average...
Big Picture Technology ChangesThat Affect Digital Media• Three megatrends – connectivity, truemobile computing and dominan...
Some Other American Viewpoints− Justin Smith, The Atlantic− Malcolm Netburn
The Atlantic: Deliberately Disruptive Lessons“Disruptive, Open-minded and Bold”“We imagined ourselves as a venture-capital...
The Atlantic: Deliberately Disruptive Lessons“Disruptive, Open-minded and Bold”38
The Atlantic: Deliberately Disruptive Lessons1. New media is high-growth and demands companiesact fast– Build for emerging...
The Atlantic: Deliberately Disruptive Lessons3. Explosion of mobile devices will drive demand formobile-rich content– By e...
The Atlantic: Deliberately Disruptive Lessons5. As content narrows, media must focus on niche– Media is becoming fragmente...
The Atlantic: Deliberately Disruptive Lessons7. New consumers’ insatiable appetite for socially optimized,real-time conten...
The Atlantic: Deliberately Disruptive Lessons9. Global Connecting– Building a “boundaryless environment”9. As digital prol...
Malcolm Netburn’s Thoughts• Managing complexity is terrifying – but crucial– Atomized content– Smaller clusters of consume...
Malcolm Netburn’s Thoughts• The future is about risks and intuitions. Again, notstrengths of the modern-day media company•...
The Digital Revolution is now.Let’s make some money!Questions?
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State of the Industry: Monetizing the Digital Revolution

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Digital media, information technology and the internet have transformed the magazine industry, creating significant challenges and significant opportunities for substantial growth. To gauge this transformation, CDS Global and FOLIO: magazine partnered to produce an exclusive report that quantifies how magazine publishers in north America are using digital and e-media in this new era.

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  • Before we get into the five quick steps for growth in digital, I’d like to underscore one of the key findings of the study. We are anticipating significant increases in revenues from digital so we need to focus on the efforts that will drive and support that amount of revenue growth. It’ll be fantastic if we are here discussing next year’s results and we have accomplished this goal won’t it? It would surely have Publishers sitting in a solid position making up for diminished revenues on the print side of the business. [CLICK]
  • There are many things publishers can do to grow in the digital space. So let’s take a look at 5 quick steps you can take that will have a positive impact on your business: Optimized customer acquisition pages Mobile-optimized customer care Gated content & paywalls Tablet customer service Consolidated digital reporting [CLICK]
  • First and foremost, you need to make it easy for potential customers to subscribe to your magazines online. Whether your product is print, digital or both, customers need to be able to subscribe to magazines in an optimized online format. I recently conducted my own exercise of buying many magazines from multiple publishers and I can tell you that not all of my experiences were smooth or easy. In this example, The New Yorker does a great job of setting the page in an easy-to-read format. They also make it easy to choose the product –print & digital, print or just digital. Keeping the end customer experience in mind as you optimize your acquisition pages is critical. [CLICK]
  • A second quick method for driving growth in digital is to have mobile optimized customer care. To clarify upfront – mobile is used in a device-agnostic format, including tablets, phones, and computers. According to a recent “think with Google” trending study, 67% of users are more likely to purchase a product from a mobile-friendly site. In this example, notice that the image on the right side of the page is not mobile optimized. Completing the form would require the user to pinch and expand the page – a navigation that is purely unacceptable in today’s mobile-driven world. Consumers want the mobile experience to be visually easy. [CLICK]
  • As you can tell now, the image on the right has now been adjusted to fit for mobile and works in such a way that is user-friendly. No pinching and swiping required to navigate. It is imperative that all companies with an online presence optimize their Web pages for mobile. Fortunately this is relatively easy to do – publishers who partner with CDS Global can leverage this capability in a relatively short amount of time. [CLICK]
  • State of the Industry: Monetizing the Digital Revolution

    1. 1. State of the Industry: Monetizing theDigital RevolutionMalcolm NetburnChairman and CEOCDS Global[@mnetburn]
    2. 2. 2
    3. 3. About CDS Global600 millionoutbound transactionsprocessed annually208 millionemailsdeployed annually150 millioncustomersmanaged annually7 millioninbound callsansweredannually4.5 millioninbound emailsannually198 millioninbound transactionsprocessed annually2,500employeesglobally$7 billionprocessed forclients annually
    4. 4. Access the New Report:Monetizing the Digital Revolution, 3rdEdition• The third edition of the report isavailable on www.cds-global.com.• Digital media benchmarks, insightsand analysis.
    5. 5. Key Insights & Findings1) Continued Strong Digital Revenue Growth is Expected for 2013, Especiallyfor Consumer PublishersConsumer media companies and publishers forecast 23% top-line growth fordigital gross revenue in 2013 up from 17% growth last year.2) Digital’s Share of Total Revenue Climbed from 12% Industry-wide in 2010 to20% in 20123) Advertising is the Largest Digital Revenue Source, but its TotalShare is DecliningAdvertising’s share of total digital revenue across the industry decreased from40.8% to 38.8% in the past year.
    6. 6. Key Insights & Findings, continued4) The Top Two Digital Revenue Streams Account for Only Half of TotalRevenueWebsite advertising and e-newsletters/sponsored emails provide a total of55% of all digital revenue. There are a number of other revenue streams thatindividually account for 1% to 5% of total digital revenues but added togetherare significant.5)Paid Digital Subscriptions are Growing Quickly for Consumer PublishersPaid digital subscriptions increased by a significant 26% on average forconsumer publishers last year. Also, overall both consumer and business-to-business media companies say that 9% of their print subscribers / readershipmigrated to digital in 2012.6) Nearly Half of the Industry has Developed an iPad App49% of media companies and publishers, including bothconsumer and business-to-business sectors, have developedat least one iPad App.
    7. 7. Top Goals & StrategiesAll Consumer B2B1) Increase digital and online profits 70% 70% 72%2) Increase online, digital circulation and subscriptions 60% 65% 59%3) Drive top-line digital revenue growth 56% 51% 63%4) Develop digital edition(s) for e-reader/tablets 41% 45% 38%5) Re-design website 41% 40% 43%6) Experiment with various evolving technologies 41% 40% 40%
    8. 8. Digital’s Percentage of Total GrossRevenue 2012 & 2017 ForecastAll Media Companies & PublishersConsumer OnlyBusiness-to-Business Only13%20%24%40%46%49%2012 2017
    9. 9. Digital Gross Revenue GrowthRates 201217.7%13.7%11.7%All Media Companies & PublishersConsumer OnlyBusiness-to-Business Only
    10. 10. Digital Gross Revenue Growth Rates2013 Forecast23.2%17.2%14.2%All Media Companies & PublishersConsumer OnlyBusiness-to-Business Only
    11. 11. Digital Revenue Breakout byRevenue StreamTop 5 Revenue Streams % of Total (Out of 100%) All Consumer B2B1) Website advertising/sponsorships 38.8% 38.1% 40.8%2) E-newsletter, content email ads/sponsorship 16.4% 7.4% 22.2%3) Digital edition subs/single copies 6.5% 13.7% 2.4%4) Publication (book or report) sales: print 5.3% 8.9% 2.5%5) Digital content, information, data sales 4.2% 1.4% 3.7%Other Digital Revenue Steams: eCommerce, web stores, online shopping environments; Website contentsubs/user fees; Online video advertising, sponsorships or other related-revenues; Online subscriptionordering/processing; Virtual events/webinars/webcasts; Online education/learning; Subscriptions/sales ofapps for digital devices; Publication (book or report) sales: digital; Online memberships; Content licensingto other organizations/media companies; E-newsletter, content email subs; Coupons; SMS/text messagingmarketing/advertising sales; Other /Misc.
    12. 12. Are Digital StrategiesFully Developed?
    13. 13. Digital Customer RelationshipFunction OutsourcingOutsourced Both In- House &Outsourced In-House NAeCommerce, web stores 21% 17% 35% 28%Online subscriptions and ordering 20% 21% 54% 6%Subscriber database 20% 16% 61% 2%Mobile page optimization 19% 14% 40% 27%List management or prospect database 17% 29% 48% 6%Online acquisition page development 13% 16% 55% 16%Online customer care 12% 14% 59% 15%Online acquisition page design 10% 18% 56% 16%Transactional e-mails 8% 15% 56% 20%Intelligent up- and cross-selling 6% 12% 39% 43%Promotional e-mails 3% 13% 83% 1%
    14. 14. Who’s Driving the MostIndustry Change?All Consumer B2B1) Technology Device Makers 50% 48% 50%2) Readers/Subscribers/Content Users 49% 52% 45%3) Social Media Sites 42% 46% 41%4) Publishers and Media Companies 36% 39% 34%5) Advertisers 36% 34% 36%
    15. 15. ConclusionThere is Still No Industry Consensus on Key Digital Strategiesor Business Models•There is no agreement on the best strategy, approach and model to takeas a media company and publisher.•The industry is still rapidly evolving due to technological change.•There is more agreement that the main goals for digital initiatives andefforts are to drive revenue and profitability, and increase online andmultiplatform readership. Still, there is no agreement on the bestways to do this.
    16. 16. Driving Digital GrowthKey Finding of the Study23% top-linegrowth isforecastedfor digital grossrevenue in 201317% increasefrom 2012
    17. 17. 5 Quick Steps to DriveDigital Growth1. Optimized Customer Acquisition Pages2. Mobile-Optimized Customer Care3. Gated Content & Pay Walls4. Tablet Customer Service5. Consolidated Digital Reporting
    18. 18. 1. Optimized CustomerAcquisition Pages
    19. 19. 2. Mobile-OptimizedCustomer Care67% of users are more likely topurchase a product from amobile-friendly site− “think with Google”trending study
    20. 20. 2. Mobile-OptimizedCustomer Care• All companies with anonline presence shouldoptimize their Webpages for mobile access• Mobile includesall devices
    21. 21. 3. Gated Content & Pay Walls
    22. 22. 4. Tablet Customer Service2013 has been coined as theyear of the tabletaccording to PC MagazineSource: Will 2013 Be the Year of the Tablet? Article by Tim Bajarin @bajarin
    23. 23. 4. Tablet Customer Service• Publishers must be preparedto handle technical customerservice inquiries related todigital editions• Scientific American has seenrecent success with technicalcustomer service
    24. 24. 5. Consolidated Digital Reporting• Growing market of digital content• Rising number of digital newsstands• Many digital editions are being sold by third-partydigital storefronts• Lack of traditional publication-marketing data focus
    25. 25. 5. Consolidated Digital Reporting
    26. 26. To Conclude1. Optimized Customer Acquisition Pages2. Mobile-Optimized Customer Care3. Gated Content & Pay Walls4. Tablet Customer Service5. Consolidated Digital Reporting
    27. 27. 27We are in a period ofWe are in a period ofCreative DestructionCreative Destruction
    28. 28. 28Over the next 10 years, one ofthe main effects of the greatpublishing realignment will bethe deep-rooted changeexperienced by the magazineindustry: from primarily aprint-oriented business to onewhere digital products willrepresent the largest share ofa smaller periodical industry.Publishing’sGreat Realignment2007-2020(magazine industryrevenue in billions of $)
    29. 29. Big Picture Technology ChangesThat Affect Digital Media• Connectivity• Mobile Computing• The Social Web29
    30. 30. Connectivity•1/3 of the world population now online•Like electricity – always available, always on,instantaneous in its effect•Content and services on demand 24/7, 365– on any device30Big Picture Technology ChangesThat Affect Digital Media
    31. 31. Connectivity – The Numbers•Internet users– 2.4 billion – Number of Internet users worldwide– 1.1 billion – Number of Internet users in Asia– 519 million – Number of Internet users in Europe– 274 million – Number of Internet users in North America– 255 million – Number of Internet users in Latin America / Caribbean– 167 million – Number of Internet users in Africa– 90 million – Number of Internet users in the Middle East– 24.3 million – Number of Internet users in Oceania / Australia– 565 million – Number of Internet users in China, more thanany other country in the world– 42.1% – Internet penetration in China31Big Picture Technology ChangesThat Affect Digital Media
    32. 32. Big Picture Technology ChangesThat Affect Digital MediaMobile Computing•Tablets will surpass desktop within two years•Tablets with high resolution, color, portabilityare both the highest risk to publishing andequally the greatest opportunity32
    33. 33. Mobile Users EclipseDesktop Users in Two Years33Global Mobile vs. Desktop Internet User Projection, 2007-2015
    34. 34. Big Picture Technology ChangesThat Affect Digital MediaSocial Interaction•Facebook – used by 1 of every 10 people; average U.S.user spends 16 minutes a day•YouTube – September 2012 users spent an average of6.3 hours viewing and sharing content•Yelp, Foursquare and Twitter, along with the obviousimpact of Facebook and YouTube, have enormousimplications for your brand34
    35. 35. Big Picture Technology ChangesThat Affect Digital Media• Three megatrends – connectivity, truemobile computing and dominance of thesocial Web – are profound in impact, andinfluence everything we choose to create,sell, share or consume35
    36. 36. Some Other American Viewpoints− Justin Smith, The Atlantic− Malcolm Netburn
    37. 37. The Atlantic: Deliberately Disruptive Lessons“Disruptive, Open-minded and Bold”“We imagined ourselves as a venture-capital-backedstart-up in Silicon Valley whose mission was to attackand disrupt The Atlantic.”− Justin SmithPresidentDecember 201037
    38. 38. The Atlantic: Deliberately Disruptive Lessons“Disruptive, Open-minded and Bold”38
    39. 39. The Atlantic: Deliberately Disruptive Lessons1. New media is high-growth and demands companiesact fast– Build for emerging market forecasts and opportunities– Fail often, quickly, cheaply– Industry-leading incumbents at risk – typically wait forsafe, predictable circumstances1. Future of media unclear to everyone– Instinct, not previous methods for measurement, mustlead the change39
    40. 40. The Atlantic: Deliberately Disruptive Lessons3. Explosion of mobile devices will drive demand formobile-rich content– By end of year, likely to be 24 times as many mobiledevices as PCs– Between 2011 and 2016, mobile cloud trafficwill grow 28-fold3. Media must tap growing demand for widespread,unlimited access to content– Converging distribution systems– Xbox 360, Apple TV40
    41. 41. The Atlantic: Deliberately Disruptive Lessons5. As content narrows, media must focus on niche– Media is becoming fragmented by proliferation ofcontent platforms– Consumers control type, location and frequency of content– “Nichification”5. Exploit unbundling of content– Bundled experience becoming archaic– Lessons of digital music – individual songs unbundledfrom whole albums– Issue-based format not conducive to digitallyingested content41
    42. 42. The Atlantic: Deliberately Disruptive Lessons7. New consumers’ insatiable appetite for socially optimized,real-time content– “Unique, personalized social spheres”– Shareability and real-time access must be part of the inceptionand design, not an “added feature”– Unbundled means “the unfinishable, infinite scroll”7. Influence of social networks on consumer buying behavior– Social sites generating significant consumer traffic– Consumers incented to share discounts with peers,seek community advice, rate purchase experiences– Yelp, LivingSocial, Foursquare, Facebook42
    43. 43. The Atlantic: Deliberately Disruptive Lessons9. Global Connecting– Building a “boundaryless environment”9. As digital proliferates, exceptional user experience(UX) becomes a priority– Experience, not content, may be king– Human factors and interactions will equal quality ofcontent in consumer satisfaction and loyalty43
    44. 44. Malcolm Netburn’s Thoughts• Managing complexity is terrifying – but crucial– Atomized content– Smaller clusters of consumers– Device proliferation• Experimentation is essential – especially for an industry thathas not had to do that• For advertising-based companies, moving to a consumer-centric revenue model will require change in culture, people,approaches and expectations• Big is not always better– Smaller companies like America’s Test Kitchen (Chris Kimball)and August Home Publishing (Don Peschke) are innovatingin ways that large publishers are just beginning to implement44
    45. 45. Malcolm Netburn’s Thoughts• The future is about risks and intuitions. Again, notstrengths of the modern-day media company• E-editions suited for a consumer experience ontablet devices likely to be our future• Beware of the subscription model, as it is underduress. Micropayments, bundled media andmulti-device access leading to a Netflix(per month) model45
    46. 46. The Digital Revolution is now.Let’s make some money!Questions?
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