App-lied Knowledge

The alarming drop in ad spending, the surge in competition from internet destinations, and the marked preference among Digital Natives (individuals who have grown up with the internet) for free content across a variety of devices and platforms combined to make 2009 a very difficult year for newspapers and magazines.

What can publishers do going forward? Google-a company with a difficult-to-divine agenda-suggests the answer is a new service called Google Fast Flip. In an op-ed piece in The Wall Street Journal, Google CEO Eric Schmidt says the service-one Google is "testing with more than three dozen major partners from the news industry"-is aimed at making it easier for people to read articles. The logic: If it's easier to read articles, then people will read more of them.

Overall, it's probably best to find ways to work with Google. But publishers that are serious about making the most of their digital assets (by making them easier to read) should also develop a digital strategy that includes mobile.

Mobile continues to be the bright spot in budgets. A raft of recent reports and surveys released by the Internet Advertising Bureau (IAB), the trade association for digital advertising in the U.K., and the German Federal Association for the Digital Economy's mobile division, known as the BVDW Section Mobile, reveal that more brands are running mobile campaigns, a positive trend that also plays in favor of media publishers that have the inventory and know how to use (sell) it.

However, it's the excitement around "apps" (applications) that spells new opportunity for old media. Analyst firm IDC predicted there would be more than 300,000 iPhone apps by the end of 2009, but that figure didn't include the avalanche of apps for the Java, Android, BlackBerry, Symbian, and Windows Mobile platforms.

The vast majority of executives I interviewed for MobileAd World Focus-my own ebook on mobile advertising slated for release March 2010-are convinced an "app frenzy" will rock the content and advertising worlds. This is because apps, which are supported by advertising, will reach an enormous (and global) audience of people whose appetite for content is matched only by their requirements for a rich experience.

One company helping magazines make the move to mobile in style is NearbyNow, a U.S.-based provider of personal shopping services that provides mobile shopping applications for magazines, brands, and retailers so that their consumers can stay updated on the latest products, buy online, or even locate and put products on hold at a nearby store. In 2009, the company released a succession of applications built on the iPhone platform that were designed to link media, advertisers, and consumers in a new way.

What started out as a way to present all the advertising that is contained in a magazine to consumers on their iPhones has evolved into a brave new business proposition that drives positive results for both advertisers and publishers.

First, it's the amazing conversions. Because the magazine apps are a hit with the target demographic of Digital Natives, advertising click-through rates are between 15% and 25%, and conversion rates are approximately 10%; these figures are significantly higher than published industry averages for mobile applications.

It's not just the numbers, though. Thanks to NearbyNow, magazines also have insights into what people do on their mobile phones. As Scott Dunlap, NearbyNow CEO, put it in a recent interview: "Magazines are taking the data, which shows the number of consumers they reach and how much purchasing they incentivized, and handing that back to their advertisers, who can't get enough of it. Having a mobile app allows magazines to answer a lot of questions about conversion that they couldn't quantify before."

Put another way, having a mobile app based on the NearbyNow iPhone platform allows magazines to prove their worth to advertisers. In many cases, Dunlap says, a magazine's readership via its mobile app is substantially higher than its print readership. Combine the increase in audience reach with higher-than-average conversions and it's no wonder advertisers are lining up to advertise on the lifestyle magazines NearbyNow has mobilized.

Indeed, the unexpected success of these apps has prompted NearbyNow to launch a new kind of mobile advertising network, allowing brands to advertise across a number of magazines to reach even larger audiences.

Publishers are under pressure to find alternative distribution channels. Apps and the new ad networks forming around them provide media companies with the means to accelerate their mobile activities and the customer engagement information that will make advertisers stand up and listen.