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With media companies thinning out their newsrooms, struggling to stem revenue losses and worrying about the plausibility of subsisting on dwindling ad revenue online, there's been a lot of talk over the past few months about charging for content.
The free versus paid debate was at the forefront of discussion on the first day of ad:tech in New York this week. Sir Martin Sorrell, CEO of WPP, showed his cards early in the day, opening the event with a talk where he put his money with Rupert Murdoch when it comes to making customers pay for media content online:
"In order to make traditional models viable... you have to plumb where people are willing to pay for content."
Sorrell seems bullish on consumers paying varying rates for content of varying quality, and despite predicting a winnowing of content suppliers online, is confident that media brands will need to charge to sustain the quality of their content. It's a theory that found root later in the day as well.
The trajectory of Gourmet magazine is starting to sound like a Celine Dion song. Conde Nast may have shut down, but Ruth Reichl will go on. The former Gourmet editor was a well respected food writer and editor before her tenure with Conde Nast, and she is bringing her association with the brand with her as she goes forward with her career.
The author is currently on a book tour for her book “Gourmet Today,” and her public television show “Gourmet’s Adventures With Ruth” premiered on Boston's WBGH on Oct. 17.
Those projects were already in the works when Gourmet shuttered earlier this month, but they point to a fact that many in the publishing business would rather not spend much time on: there's no reason that a brand has to die just because its main product ceases to exist.
Amid staff layoffs and magazine closings, Conde Nast launched a new potential source of revenue today with the launch of a GQ iPhone app.
Conde Nast will start selling digital versions of its issues on the iPhone for the discounted price of $2.99 (versus $4.99 on the newstand). The first question that comes to mind is this: Who will start doing this next?
The bad news is in at Conde Nast. After a summer review by consulting firm McKinsey & Co., the publisher announced today that it will be shuttering four publications. Food magazine Gourmet, parenting mag Cookie, and bridal titles Modern Bride and Elegant Bride will cease to exist after this month.
In connection, about 180 employees will be laid off. Condé Nast CEO Chuck Townsend said that they were shuttered for the simple reason that the titles were losing money. Cookie is the last of Conde Nast's new publications to get the ax, while Gourmet and the bridal mags competed with other Conde titles that were bringing in more revenue. But both the bridal magazines and Gourmet were slow to move online, and are being subsumed by more digitally adept publications.
Is more streamlining to come — both online and offline?
Due to the runaway popularity of Hulu, many different publishers are hoping to tap into a similar model for sharing their content online. The latest proposal is a "Hulu for magazines" idea lobbied by Time Inc. The new service would bundle magazine content from various publishers into a storefront that can deliver content to various devices.
Here's a problem with that. Hulu doesn't make money right now. And plans to resuscitate the magazine industry by following its business model may be, well, a little premature.
Getting an ad in the pages of a top fashion magazine might have once been a priority for major advertisers, but as dwindling September issues arrive, that revenue stream is looking less and less viable.
And the once web adverse fashion industry is starting to get more comfortable online. As Fall (and Fashion Week) descends on New York, fashion titles are moving their business models more forcefully into the digital space. Numerous magazines are beginning to offer e-commerce options, which will open up new venues for traffic and monetization.
Display advertising may get a bad rap for its lack of click-throughs, but one way to increase clicks is by making the advertising more interesting. And a new play by browser plug-in Cooliris is trying to do just that.
Cooliris is a browser extension for media viewng with a very shiny and slick interface. But the company also offers a way to access its content in a browser through display ads. And it is a product that has the potential to get web publishers very excited.
While other online advertisers struggle to sell off their content, Cooliris' summer ad inventory was completely sold out by July.
September is forecasted to be a depressing month for magazines this year. Ad pages are down significantly for that month, which is usually the most profitable issue for many magazines. But the economy isn't the only reason numbers are down. Ad dollars are shifting elsewhere and they aren't likely to come back any time soon.
Magazine ad revenue is down 21.2% in the first half of 2009, according to the Publishers Information Bureau, and ad pages at publishers like Conde Nast, Time Inc. and Hearst titles were down at many publications in September by between 20% and 60%. Usually a rebound from the slow summer months, a slim September issue spells trouble for many publications.
After releasing September ad numbers (fashion leader Vogue is down over 200 ad pages from September of last year) Conde Nas't seniro VP Lou Cona said that: "This is not about magazines, this is about the recession. Given the media recession and the overall economic recession, I think we are incredibly proud."
But there are many factors indicating that magazines won't be bouncing back when the economy recovers.
Conde Nast has identity problems online. The publishing house announced on Monday that its online male fashion coverage would be folded into the websites for magazine properties GQ and Details. I wrote about the decision here.
In the piece, I wrote about how the change could effect Style.com. I thought of Men.Style.com as a subdomain of Style.com. But Conde Nast actually considers Men.Style.com to be its own property. GQ.com and Details.com are currently linked to the site, and they are all considered to be distinct properties from Style.com, which is "the online home of Vogue."
All that parsing is rather confusing. And I'm not the only one who failed to note the distinction between the two Style.com properties.
As old media brands shift online, their most important assets are often name and reputation. But in the case of many magazine publications, the fear of cannibalizing the print product has kept their websites surprisingly dormant. Opportunities to grow the brand online passed by as editors and sales staff focused their attention on making the print publication successful. But now, as print ad rates dwindle, publishing houses have to start figuring out how to make the web work.
This is something that Conde Nast decided to address today. The company announced it would fold its male fashion content on Men.Style.com into print brand websites GQ.com and Details.com. It looks like Conde Nast is finally taking onlne seriously, but will it work?
Offline advertising may be suffering right now, but that doesn’t mean that online brands can’t still profit from it. According to AdWeek, online entities like Zappos, Amazon and Kayak are working with traditional agencies — and advertising — to fatten up their profits. But the thing they still needs to get worked out is how to measure the effectiveness of cross-channel campaigns.
Trying to foster more brand awareness and utilize growing budgets, online companies are looking past search and display toward more traditional methods. Barry Lowenthal, president of The Media Kitchen here, a unit of MDC Partners' Kirshenbaum Bond + Partners, tells AdWeek that television ads bring "people into the fold that aren't already participating in the category or, if they are already participating in the category, might not be considering your brand. It's much higher up the purchase funnel.”
What's the most important factor in the success of a display ad? Size? Placement? Not surprisingly, it's relevance.
That's according to a study conducted by publisher Condé Nast and research firm McPheters & Company.