From Traditional to Tradigital

A roadmap for magazine publishers

Prescott ShiblesCEO

How do you use a roadmap?

The Industry’s Abuzz

Traditional Publishers• E-readers• Paywalls• Audience

Engagement/ Social Media

• Cost structure

Saavy Media Companies• HTML 5• Smartphones / mobile• Semantic analysis• Behavioral targeting /

personalization• Hyperlocal• API’s

Why such divergentstreams of thought?

5 Major Challenges

1. Print dollars to digital dimes2. Disintermediation of media3. Dramatic increase in number of competitors4. Rise of ad networks5. Top 50 Web sites command 90% of online

revenues

Simplifying Digital Strategy

4 P’s of Marketing1. Product2. Price3. Place4. Promotion

4 S’s of Digital Media1. Scale2. Segmentation3. Smarts4. Science

Scale

Nearly 30% of Google’s Revenue Comes from Partner Sites

Top 50 Web properties hold an 89% market share

Ad Network ScaleDec 2009 Unique Visitors (000)

Total Internet Audience 205,709

Aol. Advertising 187,023

Yahoo! Network 180,909

Google Ad Network 178,134

ValueClick Network 170,744

Microsoft Media Network 165,470

The challenge of ad networks

• BusinessWeek: 30% of display ad dollars spent with ad networks

• "Moving from site-targeting to people-targeting is the central dynamic of the industry," says Matt Spiegel, chief executive officer of ad giant Omnicom Media's (OMC) digital group.

2005

2006

2007

2008

2009

2010

2011

$220

$350

$575

$1,000

$1,650

$2,600

$3,800

US Behaviorally Targeted On-line Advertising Spending (in

millions)

Hearst’s Scale

The Knot’s Scale

Content that Scales

Demand Media network reach

TheKnot.com almost twice as much reach as Conde’s Brides.com

Technologies that Enable Scale

• APIs and Microformats: a way for one application to interact with another one (transfer data, log in, etc.)

• HTML5: supported partially in new browsers like Safari and Chrome… mobile platforms

• Semantic analysis: automated tagging• Behavioral targeting: take lower value

inventory and increase prices as much as 25%

API Example

Segmentation

Ad Targeting

Behavioral Geography

Demographics Social Contextual

Need Finer Targeting Tools

Keys to Segmentation

• Unified customer database• Website registration• Registration API• Tie consumption habits to customer database

– Semantic analysis of content improves contextual targeting AND behavioral data capture

• Tie in historical data– RFM (recency, frequency, monetization)

Scale + Segmentation = Performance Buys

Build a Vertical Ad Network

• Approach competitors, traditional and digital• Adify, DoubleClick and others offer ability to

create your own ad network• Benefits of ad networks without the low

CPM’s

Science

Where to Spend

• “Content management systems are the new ad servers” – Tim Armstrong, CEO, Aol.

• "Moving from site-targeting to people-targeting is the central dynamic of the industry," says Matt Spiegel, chief executive officer of ad giant Omnicom Media's (OMC) digital group.

Content Management

• Semantic tagging• Ease of use to editors• SEO• Integration with membership system• Syndication capabilities• Multisite management (theknot.com)

Membership

• Use threshold gating• Data I’ve seen puts conversions around 30%• Of those that become members, 40%

subscribe to the magazine• Majority of those are new print subs• Hearst developed Circules

– 50% of subs now driven by Web– $20 MM delta on circulation profits

Areas to Save

• Web analytics: can be had cheaply but don’t skim on proper implementation

• Inventory / yield management• Search• Personalization, behavioral recommendation

Smarts

Business Models

Traditional• Site-targeted

advertising• Subscription to content• Push-based• Assembly line approach

Tradigital• API license• Content Syndication• Subscription to service• Scale-based (push and

pull)• Consultative marketing

solutions sales execs

Simplifying Digital Strategy

4 P’s of Marketing1. Product2. Price3. Place4. Promotion

4 S’s of Digital Media1. Scale2. Segmentation3. Smarts4. Science

Wired on the iPad

• How does this scale?– iPad version, Android version, Skiff version, etc.

• How does it segment?– Not a lot of details as to how to deliver advertising

• What’s the science?– Proprietary… will cost you significant investment

up front and ongoing• What skills are required?

– Lots of training or hiring of specialists

Alternate Scenario

• Build App in HTML5– Port it later– Just go Web-based

• Does it scale? YES! Works on Apple and Android mobile devices

• How does it segment? It uses your regular ad server.• What’s the science? Standards-based solution, degrades

elegantly, affords future functionality• What skills are required? Most technical producers are

keeping up with HTML5. If not, learning curve isn’t high