A syntheses of the themes and issues discussed by the world’s magazine media experts in ROME, September 2013.
Speakers asked to
Define the problem,
explain the solution,
show the results.
(And 40th Congress will be in Toronto next October)
It was the best of times – it was the worst of times.
It was the age of wisdom – it was the age of foolishness.
It was the epoch of belief – it was the epoch of incredulity.
It was the Spring of Hope – it was the Winter of Despair.
It was a time when we had everything before us – it was a time when we had nothing before us.
We were all off to heaven – we were all off to that other place.
FIPP formed in 1925
44 National Associations, +600 operating companies worldwide.
Events (Beijing, Berlin, Toronto, Research Forum)
Insight (POP, Digital Media Factbook, e-newsletters and FIPP.com)
Training (MBMC, EPIC)
The major theme, set by Peter Kreisky who is here today was that to grasp the future opportunity, organisations had to change.
This was echoed by John Wilpers, also here today.
The business strategies and business models of the future will be determined by where the consumer is going.
And the consumer is increasingly going digital FIRST.
Not digital ONLY
Not digital PLUS
And to deliver, a new operating structure is needed.
Again, echoed by John.
Incremental change will not work.
(Time Inc making Editors report to Publishers is really an incremental change)
Its change at all levels.
Michael Porter wrote the definitive ‘Competitive Advantage’ book back in the late 80’s.
CA was predicated on a company having SCALE, and TRENDS were PREDICTABLE.
Scale, arguably is now a disadvantage – it slows down decision- making, and uncertainty and disruption are now constants.
I shall leave it to Peter and John to describe what companies should and indeed are doing.
This is a seismic shift. Over the years, as people have described their strategy I have seen the diagrams that first used to
show the magazine at the heart of our thinking.
By 2011 and the Congress in India, everyone had their new diagrams with the brand at the heart.
Now it’s the Consumer.
This is how advertisers now think – consumer not platform.
The consumer is in control – they pull what they want from us instead of accepting what we push.
Take what Duncan Edwards of Hearst International, said - that Hearst’s magazines
‘Make sure that we have a clear and distinct point of view, to make sure she comes back to us’.
One consequence is an increase of importance in content metrics – what’s being read, what’s being shared.
Hearst UK employing Mathematics graduates from Cambridge University.
It’s a deeper dialogue with the consumer – Glamour getting fashion students to help shape the brand strategy.
Exclusivity last for 10 minutes before your story is blogged, shared, retweeted and ggogled.
Therefore let the audience participate and build your community.
It worked in Finland and India – two markets more different you cant imagine.
RGC is the ultimate example.
We used to talk about selling magazines and building circulations – now its about building communities and how to engage them.
Its why we are seeing an explosion in live events and experiences (Grazia at Westfield) Burda running crafts weekends with their titles (Fabrizio)
Its why Social Media is becoming an important brand building tool.
And the rise of crowdsourcing –not just on message boards but even the creation of content for the printed magazine
(models different – Olivia paid their contributors, Femina didn’t – but best selling editions of the year).
Interesting in that the advice was pretty clear. Social Media is a slow-build. So don’t over-complicate, just experiment.
CMO Survey 2013 on Social Media Results
49% - No impact on sales seen
36% - Believe there is an impact on sales
15% - Have proven impact on sales.
Here is a benchmark.
From Facebook ‘like’ to subscriber is a 2% conversion rate.
Its promising – certainly the return is in line with what the old direct mail techniques used to bring, but at a fraction of the cost.
Its actually not an ‘Opportunity’ but an ‘Obsession’.
A slide from Google
90% of all media interactions are screen based.
Ad dollars will go where the eyeballs are. Smartphones undersupported (17c per minute of ad revenue) and are the focus of attention. It will change.
The delay is that of creativity - ads look awful on smartphones hence rise of ‘Native’.
Debate at this conference, but the fact is that unless we find a suitable way to play this game we will be watching the revenue walk away.
To emphasise the importance of mobile, Hearst’s top three priorities are:
So how do we make money. E Commerce.
We now see Retail meeting Media (Net a Porter) –so why not the other way around? After all, we’ve always ‘sold’ product (Fiona)
Well yes, but understand its different
Perhaps work with partners who bring the skills you don’t have. (Paul)
Be clear about your competitors – e.g. Amazon, eBay, Alibaba
Accept it is a low margin business
Harpers Bazaar hooking up with Saks of 5th Avenue
Cosmo and Amazon for fulfilment
Elle shop Japan.
Again we have speakers here today who will talk in greater detail about the digital newsstand situation.
There is an obvious new business opportunity in a continent largely speaking the same language.
English language publisher Future discovered that 80% of the buyers of the digital edition of T3 were from outside of the UK.
The issues to face up to are
Pricing (the buyer expects digital editions to be half the price of the print version)
Efficient content creation (create once, publish on all platforms)
Encouragingly, we were presented with evidence that proves the advertising effectiveness of magazine media.
My colleague Cobus Heyl will be unveiling the launch of FIPP’s Proof of Performance which shows how magazines still work for advertisers
So I’ll leave to him.
First ever banner ad – 78% click rate
Dominic Porter CEO Group M - $50 bn dollars ad billings.
‘We haven’t found ways of building brands through the primary use of digital media’.
Marketers want evidence of deeper proof of engagement and interaction
to create brand awareness,
want to know purchase intentions and
likelihood of recommending a product.
The data and metrics they will want from you in the future are not just a click metric or unique user figure, but deeper data such as;
In view time
Time of interractions
Be prepared for it.
This means that the buying and selling of digital advertising will become an algorithmic process.
It is profoundly changing the nature of our advertising relationships.
It will be talked about at this conference.
So in September 2013 we were predicting that in the USA and Europe, 50% of your digital advertising would be programmatically bought by 2015.
In May 2014 this report from AdExchanger in the USA said
Currently more than two-thirds of agencies use automated ad buying for at least 20% of their budget,
and more than a third are up to at least 60%. Almost half plan to get to 60% by 2015
AdExchanger, research, USA. May 2014.
The change is happening faster. Here in Brazil you have an opportunity to learn. We have a session on the programme which we believe will do that.
The fear is that this commoditises sales.
The bad news is that CPT’s are low, the good news is
that yields are growing.
Brands can now reach the consumer without us by using online and social media platforms.
1 Why do they need us?
2 Brands will now fight us for creative talent.
Felix Baumgarten sponsored by Red Bull (see their logo on his spacesuit).
8 million live viewers on Youtue.
58 million views to date.
Coverage on every major news channel in the world.
Above the line media expenditure -- 0.
Some advice about playing to the strengths of what we do.
David Pullan – runs the Unilever account, but worked with me in a magazine company memorably said that content now must be:
And Ruth Feldman adds that digital has allowed them to bring their content to life (award winning app).
Finally, what always wins is innovation. People love new things.
Advertisers will stop asking tough questions about if you can show you understand their
Marketing problem and come up with an innovative solution.
The consumer will engage with you if you are exciting them.