So yesterday I wrote a post around the dilemma facing Newspapers and their future both online and offline. I’ve gotten some great responses around the topic which has been fantastic and I hope there’s room for non-hysterical debate around the next few years of this media and the role digital channels are playing in its evolution.
Now … there’s a saying that someone reminded me of today that is commonly thrown around in the world of digital.
It is that ‘the dollars follow eyeballs’. I’m sure you’ve heard it – everyone rolls it out when they want to illustrate the so-called disconnect between media engagement and media spend.
The same person reminded me of another thing – “there is a very real difference between a quick glance and a long stare.”
So yesterday I talked about newspapers and the challenges that are facing the medium. I love newspapers … I love reading them on the weekend and I see the role they play. Yes, I use the Internet for news but on the weekend I prefer to read an actual paper newspaper with my fiancée over breakfast and spend a good hour or two letting it spark conversation/laughs/debate etc.
Personally I don’t think anything could replace that for me. And no, I’m not that old … I’m 31 … so it’s not like I’m some old dinosaur (or maybe I am) who ‘only knows’ TV and newspapers.
In this doom and gloom talk around Newspapers is almost equal doom and gloom around magazines.
The issue facing publishers and media owners with magazine assets is what to do now. It was commonly believed the Internet would give them another generous revenue stream but like with newspapers, the reality is a little different.
The challenge remains – how in the next 3-5 years do you not kill your relatively high yielding magazine arm to build a relatively low yielding online arm?
The very real outcome is you send yourself broke building a web business with loads of uniques but minimal engagement.
Let’s look at an example. Let’s take Who Magazine and it’s online home, Yahoo!7 Lifestyle. I only decided to use this as Who is good example of a magazine with an incredibly loyal readership.
So … the raw numbers
Who has a readership according to Morgan of 757,000
Yahoo!7 Lifestyle has a readership according to Nielsen Netview of 619,000
What’s the takeout? Well – print has more readers but not by a massive amount. The 2 are reasonably close.
So … from my estimates an average edition of Who would make around $225k in revenue – I’ve based this on ad placements for the June 15 edition working off a ratecard. Over 4 issues (for the sake of this argument – 1 month) that’s around $900k in revenue from advertising alone
Now let’s look at Yahoo!7 Lifestyle. Remember – this is the home of all more than just Who … but I can’t break out Who on its own using Netview so have to use this figure. Now the average user of Yahoo!7 Lifestyle looks at 7 pages per month. This works out total at 4.6m Pageviews per month. So let’s assume there’s 2 ads per page and these 2 ads are selling at around $30cpm and have 100% sell through. This gives us 9.2m impressions at $30 = $276,000 in revenue per month. (usage figures sourced from Neilsen Netview, April 2009)
Herein lies the problem – the magazine is much more effective at revenue extraction per user. The print publication effectively brings in $1.21 per user per month ($900k from 757k readers). The digital element brings in 44 cents per user per month ($276,000 from 617,000 users)
Now – I will admit this doesn’t include integration or production – but it doesn’t count that from both sides: print or online.
So, looking at these numbers the print magazine is bringing in 3 times the yield per reader than the online publication is. And this shouldn’t be surprising – the engagement metrics for the online site are nothing spectacular – they are viewing 7 pages per person per month and spending just under 5 minutes.
My argument yesterday was that the real issue facing newspapers is not charging higher ad rates – it is building engagement in terms of page views and time spent.
For magazines the challenge looks remarkably similar.
A hypothetical – would the magazines online environments be charting better if they could increase their engagement metrics threefold. So users were spending 15 minutes per month with them, not 5 … and looking at 21 pages … not 7? It’d be a positive start. The CPM argument or the argument around ad rates is irrelevant.
So it appears there is indeed a very real difference between a quick glance and a long stare. A big difference when it comes to engagement, but more importantly revenue.