abc - how publishers are monetizing mobile usa 2011

8/3/2019 ABC - How Publishers Are Monetizing Mobile USA 2011

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Table of Contents

Introduction.................................................................................................... 3

SummaryofKeyFindingsReaching Mass Market Adoption ....................................................................... 5Diversifying for Multiple Devices and Operating Systems ................................... 9Maturing Marketing Offers and Advertising Opportunities ............................... 15Sharing Success Stories ...................................................................................... 17

Conclusions................................................................................................... 19

Methodology................................................................................................. 21

AbouttheAuditBureauofCirculationsandABCInteractive....................... 22

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Going Mobile: How Publishers Are Maturing and Monetizing Their Offerings

For the last two years, ABC and ABC Interactive have surveyed U.S. and Canadiannewspapers, consumer magazines and business publications to learn more about theirmobile initiatives, their strategic plans and ABCs potential role in the marketplace.

With three consecutive years of responses, we have accumulated a unique trove of datathat shows just how far publishers have come in their journey to make mobile an integraland viable part of their businesses.

Purpose of

This Survey


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Introduction

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The Audit Bureau of Circulations and ABC Interactive recently conducted a survey of printpublicationsnewspapers, magazines and b-to-b titlesto learn how their mobile initiativesare progressing. This is the third time we have posed these questions to the same audience.Publishers growing mobile know-how, increasing condence in mobile strategies, maturingproduct offerings and anticipation for future revenue streams is evident in the results.

Eighty-ve percent of survey respondents said they currently have mobile contentfor smartphones, e-readers or tablet computers, up from 76 percent last year.

Newspapers (88%) were most likely to have mobile initiatives in place, followedclosely by consumer magazines (83%) and business publications (79%). Publisherscite development and maintenance costs as the primary reason they did not have amobile presence.

Publishers are gaining condence in their mobile strategies. When we rst elded thesurvey in 2009, just 28 percent said they had a well-developed plan for the mobilemarket. That number more than doubled by 2011. Fifty-nine percent now say theircompany has a strategy for capitalizing on mobile platforms.

Many believe that e-readers and tablets will be the biggest boon to their business.Seventy-three percent said readers are most likely to consume their contenton e-readers or tablets compared to 60 percent who said the same thing aboutsmartphones. In Canada, the gap was even wider. Fifty-seven percent said e-readersand tablets had the brightest future compared to just 34 percent for smartphones.

Publishers in the U.S. and Canada are investing in optimized mobile websites.Eighty-one percent of U.S. publishers and 65 percent of Canadian publishers saidthis was an important part of their strategic plan. Respondents said mobile websitesoften account for up to 15 percent of their overall website impressions.

When it comes to developing apps, most publishers are focusing their efforts onApple products. Sixty-one percent of respondents said they have an iPhone appand fty-four percent said they have an iPad app. Of those publishers with apps,45 percent said they charge for their iPad apps, followed by 35 percent collectingpayment for iPhone apps and 34 percent earning revenue from Amazons Kindle.

While most publishers were optimistic about Apples new Newsstand offering, manystill expressed frustration with the companys fees and consumer information policies.

Just eight percent said they thought Apples tactics were favorable to publishers.Forty-two percent said the publishing industry needs to develop an alternative to

Apple to be successful in the future.

(continued)

Going Mobile: How Publishers Are Maturing and Monetizing Their Offering


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Introductioncontinued

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Two-thirds of survey respondents said publishers need to focus on two equallyimportant revenue streamsadvertising and subscriptions. Publishers believe mobileoffers many potentially successful advertising opportunities, including search (67%),store locators (65%), banners (64%), sponsorships (62%) and videos (62%).

Publishers had mixed feelings about how to best charge consumers for accessingcontent on multiple platforms. Forty percent said readers should pay one price andreceive access to all platformsprint, web, mobilewhile another 40 percent said

readers should pay more for each additional platform.

There was more agreement regarding buyers expectations from mobile advertising.Seventy-four percent of U.S. publishers and 70 percent of Canadian publishers saidadvertisers will demand more accountability as they spend more money on mobilebuys. Two-thirds of publishers said the industry needs to report more detailed mobilemetrics, such as access rates and time spent. And 72 percent said multimedia reportslike ABCs Consolidated Media Report will become increasingly important as theirportfolios diversify.



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Summary of

Key Findings

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ReachingMassMarketAdoption

According to a recent study byNielsen, 21 percent of U.S. wireless subscribers owned asmartphone at the end of 2010. Nielsen speculates that we are just entering the era wheresmartphones will become a standard consumer device. Sales of smartphones increased 29 percentbetween September 2009 and March 2010 and 45 percent of Americans said a smartphone wouldbe their next mobile device purchase. Nielsen predicts that by the end of this year, smartphones

will overtake feature phones in the market.

With less time on the market, tablets and e-reader ownership is also growing. An article inUSA Todayclaims that 12 percent of U.S. households own an e-reader, triple the amount from ayear ago. Tablet ownership is up to eight percent and has doubled from May 2010.

What does this mean for magazine and newspaper publishers? Theyre in the perfect spotto capitalize on a new phenomenon. Our survey shows that the number of magazines andnewspapers distributing their content on mobile devices continues to increase but that thenumbers may be reaching the point of saturation. Many of the publications with the inclinationand resources to initiate a mobile presence have already launched products or will do so in thenext six months.

Eighty-three percent of magazines share their content on mobile devices, up 26 percent from lastyear. Business publications have also seen a large jump in mobile distribution. In 2010, 58 percentof b-to-b survey respondents said they had mobile content. This year, that number increased to79 percent. Newspapers show the highest percentage of penetration88 percent have mobilecontent and that number is holding steady from 2010.

Graph A Nearly 80 percent or more of the magazines, business publicationsand newspapers that responded to the survey, said their content was available onmobile devices.

http://blog.nielsen.com/nielsenwire/consumer/smartphones-to-overtake-feature-phones-in-u-s-by-2011/http://blog.nielsen.com/nielsenwire/consumer/smartphones-to-overtake-feature-phones-in-u-s-by-2011/http://www.usatoday.com/tech/news/2011-06-28-ereader-tablet-ownership_n.htmhttp://www.usatoday.com/tech/news/2011-06-28-ereader-tablet-ownership_n.htmhttp://blog.nielsen.com/nielsenwire/consumer/smartphones-to-overtake-feature-phones-in-u-s-by-2011/


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Despite the large year-over-year increases, there are still some publishers that are not distributingmobile content and they cite many reasons for their decision. The most common reason? Cost.

Graph B Fifteen percent of survey respondents said they dont have content formobile devices. Seventy-nine percent of those publishers said the primary reason for

their lack of mobile content was development and maintenance costs.

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Publishers condence in their ability to craft and execute a successful plan for the mobile marketis also increasing. In this years survey, nearly 60 percent of respondents said their publication hasa well-developed plan for the mobile market, up 28 percent from 2009.

Graph C In 2011, publishers are twice as likely to say they have a well-developedplan for the mobile market than they were two years ago.


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With all the attention on mobile, especially tablets and e-readers, are publishers buying into thehype or do they believe that the media is overstating the potential impact of this new distributionchannel? While 30 percent of publishers said the inuence of mobile may be overstated,58 percent said it is not.

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Graph D Nearly a quarter of publishers said they werent sure if mobiles inuence ontheir business was overhyped. Fifty-eight percent said it wasnt overstated and 30 percentsaid it was.

Just how condent are publishers in their mobile future? Most publishers believe that mobilewill augment their print publications instead of replacing it, although a few are beginning to seea digital-only future for their titles. In 2010, only ve percent thought it was possible that theirpublication would only be digitally delivered in ve years. This year, that number crept up to

12 percent.

Graph E The number of publishers who disagree that their publication will only bedigitally delivered in ve years held steady but some of those who were unsure in 2010 madea decision in 2011they do think their publication is facing a digital-only future.


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When we rst elded this survey in 2009, the iPhone was making waves in the publishingindustry. In 2010, our survey hit the market right after the launch of the iPad. And this year, weasked our questions before Amazons Kindle Fire announcement. Has the introduction of thetablet to the mobile market impacted publishers strategies? Absolutely. In 2009, most felt thatsmartphones had a brighter future than e-readers. In 2010, sentiment shifted to favor tablets ande-readers and that shift continued in 2011.

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Graph F Publishers continue to focus their efforts on the e-reader and tablet market.Attention to this segment has increased more than 30 percent in the last two years.

In Canada, e-readers and tablets are showing an even larger edge on the smartphone.Fifty-seven percent of Canadian publishers said e-readers and tablets will become a vital

way to distribute their publication compared to just 34 percent who said the same thingabout smartphones.

Graph G E-readers and tablets hold a 23 percent lead over smartphones in theminds of Canadian publishers.


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DiversifyingforMultiplePlatformsandOperatingSystems

A lot of attention has been paid to publishers creating lavish, interactive apps for specicplatforms. But there are other, simpler ways for publishers to catch the attention of mobile userssuch as creating a mobile website. Publishers with mobile websites are reaping the benets ofincreased website trafc from mobile users. A recentAudience Developmentarticle citing a PewResearch study said two-thirds of tablet owners have a news app on their device but still prefer toread the news via a Web browser, not an app.

Nearly a quarter of publishers said mobile visits account for 11 to 15 percent of the total trafc totheir websites.

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Graph H Mobile visits are greatly impacting publishers website trafc. More than40 percent of respondents said mobile visits generate anywhere between six and15 percent of their overall website impressions.

And publishers expect that number to keep going up. In the next two years, 48 percent ofpublishers expect mobile visits to increase their website impressions by as much as 25 percent.

Graph I Publishers believe mobile devices will fuel steady growth to their websites.Nearly 20 percent said smartphones and tablets will increase their website visits 50 to75 percent in the next two years.
http://www.audiencedevelopment.com/2011/study+browser+not+apps+still+biggest+news+channel+tabletshttp://www.audiencedevelopment.com/2011/study+browser+not+apps+still+biggest+news+channel+tabletshttp://www.audiencedevelopment.com/2011/study+browser+not+apps+still+biggest+news+channel+tablets


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Publishers in the U.S. and Canada both feel optimized websites are valuable to their brand andare investing time and resources in developing a mobile Web presence.

Graph J Eighty-one percent of U.S. publishers said mobile websites are

important to their strategic future. The majority of Canadian publishers(65%) also agreed with that statement.

While optimized websites may give publishers a quick and easy solution to the mobile contentdilemma, an app provides a richer and more immersive experience. This explains why so manypublishers are investing money and resources to develop apps for various devices and operatingsystems. With its groundbreaking iPhone and iPad devices, most publishers are focusing theirenergies on apps for Apple products.

Graph K More than half of the publishers responding to our survey said theyhad apps for the iPhone and iPad. More than 40 percent also had apps for theAndroid operating system.


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Canadian publishers are also showing favor to Apple products. Thirty percent said they haveiPhone apps and 26 percent said they had iPad apps. Blackberry, Android and Samsung roundout the top ve.

Graph L Canadian publishers cite the Samsung Galaxy tab as the fth most

popular platform for their publications while U.S. publishers said fth place goes toAmazons Kindle. In Canada, the Kindle tied for sixth place with Kobo and Sony.

Publishers may be more likely to have an app for the iPhone but those with specially designediPad apps are more likely to charge for their content.

Graph M Publishers are most likely to charge for their Apple apps. Forty-vepercent charge for their iPad apps and 35 percent charge for their iPhone apps.Thirty-four percent said they charge for their Kindle offerings.


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While all of ABCs publisher divisions are charging for their content, magazines are aheadof the game. Seventy-three percent said they receive revenue for their iPad apps comparedto 42 percent of newspapers and 23 percent of business publications.

Graph N Newspapers are almost twice as likely to charge for their iPad appsthan business publications and consumer magazines are more than three timesas likely to charge for their iPad apps.

One of the most popular questions in our survey asks respondents to predict which manufacturerwill be most inuential on the mobile market in the next year. For the past two years, Apple hastopped the list and this year is no exception.

Graph O Apple tops our list for the third straight year, but Googles Androidoperating system is making steady gains. Amazon also makes a strong showingwith 55 percent citing the company as a key player in the tablet eld.


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As publishers try to reach audiences on smartphones and tablets, what kind of experience are theycreating for the reader? Nearly 40 percent are developing apps unique to the operating systemsrunning the device. While this is a more costly strategy, many publishers believe it offers the bestuser experience. Seventeen percent are focusing on platform agnostic Web apps while 25 percentare focusing on mobile websites.

Graph P Native apps are the most popular way for publishers to servetheir content to readers. Web apps are currently the least popular but therise of HTML5 could change publishers strategies and make the process ofdeveloping apps for each operating system less costly.

With publishers most likely to invest in native apps and mobile websites, what kind of contentare they delivering to consumers? The exact same information offered in the print edition ornew, updated information curated with the mobile reader in mind? The answer is a little ofboth. Most publishers are repurposing at least some of their print contentboth editorial and

advertisingin their mobile offerings. But nearly half are creating special products just for theirmobile audiences.

Graph Q Twenty percent of respondents said their mobile strategy includesthe development of single-topic applications related to their brand. Othersare creating replica products that mimic the print edition or curating newproducts with the mobile audience in mind.


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Just last month,Wiredmagazine reported on the success of Apples Newsstand initiative.Magazine publishing company Cond Nast said it saw a 268 percent increase in subscription sales

when the Apple Newsstand launched. But many publishers arent so sure how the Newsstand willimpact their business.

Graph R In nearly equal numbers, publishers expressed optimism or indifferenceabout the value of Apples Newsstand. Forty-seven percent were positive, 44 percentindifferent and 10 percent did not think it would help their business.

When asked specically about Apples business model that takes a cut of the sales and limits theamount of subscriber information publishers receive, respondents were more straightforward.Forty-two percent said publishers should seek an alternative to Apple to be successful.

Graph S Just eight percent of survey respondents favor Apples businessmodel. Forty-two percent said publishers need to seek an alternative tobe successful in the tablet market.
http://www.wired.com/gadgetlab/2011/10/apples-newsstand-success/http://www.wired.com/gadgetlab/2011/10/apples-newsstand-success/http://www.wired.com/gadgetlab/2011/10/apples-newsstand-success/http://www.wired.com/gadgetlab/2011/10/apples-newsstand-success/


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MaturingMarketingOffersandAdvertisingOpportunities

It is no secret that easy access to digital news is eroding many print publications subscription andadvertising revenues. Many industry analysts have heralded the burgeoning mobile market as theideal opportunity to replace some lost revenue. Publishers share that sentiment. In the U.S., 57percent said they expect increases in mobile advertising revenue in the next two years. In Canada,22 percent said they expect revenue increases from both advertising and subscription sales.

Graph T Nearly a quarter of Canadian publishers anticipate generatingrevenue from mobile advertising and subscriptions. In the U.S., those numbersjump to around 50 percent.

Publishers not only expect revenue from both ads and subscriptions, they believe that derivingmoney from both channels is key to building a successful mobile program.

Graph U Sixty-seven percent of publishers said the future business model ofmobile must rely on both ad and subscription revenue for it to be successful.


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Publishers think there are many ways advertising messages can be crafted and delivered to amobile audience. Banners, sponsorships, videos, search and store locators all ranked high onthe list.

Graph V Other forms of mobile advertising include lead generation

(30%), click-to-call (25%), text (22%), games (21%) and polls (16%).

Publishers are divided on how to charge consumers to access their content on multiple platforms.Newspapers are split down the middle41 percent think consumers should pay one price toaccess stories on all platforms and 41 percent think consumers should pay for each additionalplatform. Forty-six percent of magazines favor charging for each platform while 57 percent ofbusiness publications said they only charge consumers once.

Graph W Some publishers favor a marketing approach that only chargesconsumers once to read their content on multiple platforms. Others sayconsumers should pay for the content on each platform.


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SharingSuccessStories

As publishers mobile offerings mature and gain readers, they are anxious to share their successstories with advertisers. In fact, more are disclosing their mobile readership and other digital dataon multimedia reports like ABCs Consolidated Media Report. Nearly 30 newspaper companieshave released CMRs. The concept of multimedia reporting is also gaining traction in theconsumer magazine division with the inaugural release of thePopular ScienceCMR.

The driving factor behind greater numbers of publishers disclosing data is advertiser demand.

Seventy percent or more of U.S. and Canadian respondents said that buyers are beginning todemand more transparency and accountability as they spend more money in mobile.

Graph X Publishers in both the U.S. and Canada believe that buyer demandfor mobile accountability is on the rise. Less than 10 percent believe thatadvertisers wont increase their desire for mobile metrics.

To appease buyers, many publishers want to start reporting additional usage metrics for digital

editions such as access rates and time spent. Two-thirds of survey respondents said this is aninitiative the industry should undertake together.

Graph Y The majority of publishers want the industry to begin reportingadditional metrics for digital editions such as access rates and time spent. Less than10 percent said they did not want to provide the additional information to buyers.
http://www.accessabc.com/press/press102011.htmhttp://www.accessabc.com/press/press102011.htmhttp://www.accessabc.com/press/press102011.htmhttp://www.accessabc.com/press/press102011.htm


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With a growing focus on digital platforms, many publishers are turning to ABC to helpcommunicate the story of their entire brand footprint to buyers. The ideal report for thistype of outreach is the Consolidated Media Report and, overall, publishers are respondingvery favorably to the new exible report format.

Graph Z Seventy-two percent of publishers said that the CMR is a positivedevelopment for ABC and will become more valuable as publishers expandtheir product offerings.

Finally, many publishers believe that digital edition circulation and print circulation are twocompletely different metrics and should be audited and reported as such.

Graph AA Nearly 60 percent of publishers said that print and digitalcirculation should be audited and reported using different rules andstandards. Just 19 percent said ABC should use the same guidelines for both.


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Conclusions The majority of publishers now have a mobile presence.

Some publishers may have multiple native apps for Apple, Android and Blackberry.Others may have a replica of their print edition available through a third-partyvendor such as Zinio. Still others may make their presence felt with a mobile website.Regardless, most of the publishers we surveyed have some sort of mobile presence.In total, 85 percent of respondents said they format or distribute content formobile devices. Those that havent entered the market said their biggest concern isdevelopment and maintenance costs.

Publishers are more condent about their strategic direction.

When we initially elded this mobile survey in 2009, just 28 percent of surveyrespondents said they had a well-developed plan for the mobile market. That numberrose to 40 percent in 2010 and nally to 59 percent in 2011. Nearly 60 percent ofpublishers said the potential impact of the mobile movement on their publicationcannot be overstated.

E-readers and tablets are where the money is.

Seventy-three percent of publishers said that e-readers and tablets are their preferred

mobile distribution channel and have the best chance of generating revenue for theirmedia brands. This is compared to 60 percent who said smartphones had a promisingfuture. In Canada, the gap widens even further. Fifty-seven percent of Canadianpublishers said e-readers and tablets were the mobile devices of the future comparedto just 34 percent who said the same for smartphones. Publishers are more likely tocharge for their iPad app than any other device.

Readers accessing news via a mobile browser benet publishers.

Publishers in the U.S. and Canada believe a strong mobile Web presence is a keypiece of their strategic plan. Eighty-one percent of U.S. publishers and 65 percent ofCanadian publishers said they are investing in their mobile websites with money andstaff. And the efforts are paying off with visits. Forty-two percent said that Web trafcfrom mobile devices account for six to 15 percent of their overall impressions. Thirty-eight percent said they expect those numbers to increase by as much as 25 percent inthe next year.

Apple is still tops. But publishers need to look at alternatives to be

successful.

Apples iPhone and iPad products revolutionized the mobile industry. Their lushgraphics and easy-to-navigate interface offer a lot of promise to publishers hopingto replicate the personal experience of print magazines and newspapers. As the rstdevices in their respective categories, publishers have had the most time to developapps for the iPhone and the iPad. Sixty-one percent said they have iPhone apps and

54 percent said they have iPad apps. Publishers also cite Apple as the company withthe most inuence on the mobile market. And Apples new Newsstand feature formagazines and newspapers is garnering positive reviews. Forty-seven percent thinkit will benet publishers. Despite all this, Apples policies are still unpopular withpublishers. Forty-two percent said the publishing industry should seek an alternativeto Apple to be successful. Just eight percent said Apples policies are favorable topublishers.

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Going Mobile: How Publishers Are Maturing and Moneiizing Their Offering


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6. Advertising and subscription revenues are on the rise.

In the next two years, 57 percent of U.S. respondents and 22 percent of Canadianrespondents said mobile ad revenue will increase. Forty-nine percent of U.S.publishers and 22 percent of Canadian publishers said the same thing aboutsubscription revenues. And two-thirds of publishers said their strategy is to deriverevenue from both advertising and subscription streams. Publishers have mixedfeelings about how to charge consumers for their content. Forty percent said readersshould receive access to content on all platforms for one price. Another 40 percent

said readers should pay extra for each additional platform they consume.

Sharing the story of their entire brand is crucial for publishers with

a mobile presence.

As their mobile offerings mature and attract more readers, publishers are anxious toshare their successes with buyers. Seventy-two percent said multimedia reports like

ABCs Consolidated Media Report are increasing in importance. And publishers onlyexpect buyers demands to increase. Seventy-four percent of U.S. publishers and 70percent of Canadian publishers expect their advertisers to ask for more insight intomobile offerings. To satisfy buyers cravings for more information, many publishersthink the industry needs to start reporting additional digital usage metrics such as

access rates and time spent.

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Conclusionscontinued

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Methodology ABC and ABC Interactive conducted a survey of print publishers to learn more about theircurrent and future plans for the mobile market.

ABC and ABC Interactive conducted the voluntary, Web-based survey between Sept. 8 andSept. 26, 2011. A sample base of approximately 7,000 was invited to participate; a total of 171qualied people completed the survey.

The respondents had the following titles:

ConsumerMagazineCirculation, Audience or

Online Management 25 52%Ad Sales Management 4 8%Executive Management 18 38%Other Mg, Super, Admin 1 2%

NewspaperCirculation, Audience or

Online Management 50 55%

Ad Sales Management 7 8%Executive Management 30 33%Other Mg, Super, Admin 4 4%

BusinessPublicationCirculation, Audience or

Online Management 11 42%Ad Sales Management 4 15%Executive Management 11 42%Other Mg, Super, Admin 0 0%

The respondents also had the following demographic characteristics:

CountryUnited States 146 84%Canada 27 16%

GenderMale 109 65%Female 58 35%

AgeUnder 25 2 1%25-34 18 11%35-44 53 32%45-54 62 37%55-64 30 18%65-74 2 1%

Number ofCompleted Interviews Percentage ofTotal Completes

Number ofCompleted Interviews

Percentage ofTotal Completes

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Copyright 2011 Audit Bureau of Circulations. All rights reserved.November 2011

Headquarters Ofce: 48 W. Seegers Road, Arlington Heights, IL 60005-3913 T: 224.366.6939

Ofces in New York and Toronto www.accessabc.com www.accessabc.ca

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AbouttheAuditBureauofCirculationsandABCInteractive

ABC is a forum of North Americas leading magazine and newspaper publishers, advertisers andadvertising agencies. The organization provides credible, veried information essential to themedia buying and selling process. ABC maintains the worlds foremost online database of auditedcirculation information and a growing array of readership, audience and website usage data.

ABCs digital arm, ABC Interactive, is one of the worlds leading independent auditors of websiteand digital ad-based technology. To learn more, visitwww.accessabc.com.

Get News. Participate. Interact.

Connect with ABC atwww.accessabc.com/connection.htm

www.accessabc.ca/connection.htm
http://www.accessabc.com/http://www.accessabc.com/http://www.accessabc.com/http://www.accessabc.com/connection.htmhttp://www.accessabc.ca/connection.htmhttp://www.accessabc.ca/connection.htmhttp://www.accessabc.com/connection.htmhttp://www.accessabc.com/

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