MOBILIZING MOBILE
Now's the time for newspapers to jump into mobile -- and avoid the pitfalls of free online content
STEVE BUTTRY, DIRECTOR OF COMMUNITY ENGAGEMENT for the Washington metro-area digital-only news project backed by Allbritton Communications, just can't get his head around why his former newspaper peers keep focusing on the Web. It's not that online isn't important, or should not garner the attention of publishers. It's that it's getting too much attention at the expense of the up-and-coming, on-the-cusp-of-exploding new platform of mobile.
Content distribution, Buttry believes, is creeping away from desktops and laptops to smart-phones and other walk-about devices. In short, he believes that news organizations need to think Mobile First.
"The Web-first push we are hearing now, to me, it's like fighting the last war," he says, referring to generals who apply tactics of the past to fight wars in the present. "I think a news organization that wants to be successful in the future is going to be focusing hard in the coming years in thinking mobile first, across the board."
Buttry, the former C3 innovation coach at the Cedar Rapids (Iowa) Gazette, feels so strongly about it that he's published a mobile manifesto that outlines ways news organizations can embrace this platform in the newsroom and, just as important, in such other departments as technology, sales, human resources and financing.
It's easy to see why newspaper publishers have shoved mobile to the side, since for several years it has been hyped as the Next Big Thing. This time it looks like the platform is taking flight, thanks in large part to Apple's introduction of the touch-based iPhone. "There's good reason to be skeptical when analysts claim that, this time, it's different," Gartner Research analyst Andrew Frank wrote on the subject in an August 2009 report. "Nevertheless, thanks to Apple's redefinition of the category, this time, it is different."
Art Howe, CEO of Verve Wireless, a company that helps publishers with mobile applications and Web sites including the Associated Press, noticed an uptick in activity starting 18 months ago that has accelerated. "The sheer number of [advertising] insertion orders has ballooned since November and every week since," he says. "Is that enough to quantify it as the year of mobile? I don't know, but it's growing quickly."
Research aggregator firm eMarketer estimated in a report on mobile content that at least 68 million people in the U.S. logged on to the mobile Web at least once a month in 2009. That represents 29% of all mobile phone users and 22% of the general population. By 2013, eMarketer forecasts that number will nearly double to 126 million.
Or consider how the adoption of the iPhone app for The New York Times has lapped the Gray Lady's print circulation. During the company's most recent earnings call, executives said that more than 3 million people have downloaded its iPhone mobile app alone -- a number that represents nearly twice its Sunday print circulation. The AP counts millions who have downloaded its mobile application that segments news from more than 1,000 of the co-op's members down to ZIP code level.
The wave will impact newspapers much sooner than later and in the same disruptive ways of the Internet, analysts say.
"We have been talking about for years how online is the Pandora's box -- once it is open it is hard to go back. The consumer expectation is it's free," says Michael Boland, senior analyst and program director with BIA Kelsey, a consulting firm that advises companies in the local media space. "In the mobile world because we are starting this new paradigm and wave, is there an opportunity to do something different?"
Pricing strategies
It's perplexing that for all the renewed talk about paid content, most mobile applications are free, including, as of now, The New York Times. The company announced early this year it was rolling out a metered model pay system similar to the one used by the Financial Times, and indicated that once the online pay strategy is in place the company will charge for its mobile site and application. (The FT's mobile apps are free to online and print subscribers, depending on the package.)
During a paid Content conference in February, New York Times Co. Senior Vice President of Digital Operations Martin Nisenholtz said, "Once the Web site goes metered" in 2011, "we'll create a digital tier with one fee. At that point our WAP [Wireless Application Protocol] sites and likely our applications will be part of the tier."
Some believe that in the coming months, other newspapers will begin to start charging for apps. But for the moment, newspaper executives are falling back on their habitual approach of holding out to see who can successfully make a go of it. "Everybody is talking about it," says Verve's Howe. "I can't tell you how many conversations I have had with publishers -- they're all talking about this and they're all waiting for someone to do it. It's only a matter of time. As soon as one has had some success, others will follow."
At the same paid Content conference, Lincoln Millstein, senior vice president/ digital at Hearst Newspapers, said that just because someone won't pay online doesn't mean they won't purchase an app. Millstein cited one of his good friends who won't buy anything on the Web, and yet buys plenty of apps. "It's a strategic mistake in thinking it's the same model," Millstein added.
Or consider how CNN went about its mobile application -- charging $1.99. KC Estenson, CNN.com's senior VP and general manager, said during the conference that he was surprised that his was the first major news organization to charge for an app. "We struggled over it," he said, adding that if the price doesn't work or the model is a failure, they can always just adjust it down the road.
Time will tell if The Wall Street Journal's experience will nudge other newspapers in the direction of paid apps. The Journal, which has been tooting its horn about its online hybrid pay strategy, introduced its app for free in September 2008 before turning around and slapping a price tag on it by October 2009.
Gordon McLeod, president of the Wall Street Journal Digital Network, says the company allowed people to download the app for free in order to work out the kinks and as a way to test acceptance. The Journal, he explains, was always in favor of charging for mobile.
"We think it's a good idea or we wouldn't have done it," he says. "For our businesses to be consistent, we felt that people who are paying for content in newsprint should be paying for it online. We don't think a new distribution platform, or in our ease, our app, is different from our sites."
The WSJ mobile app costs $2 a week for non-subscribers, $100 for those who subscribe to either print or WSJ.com, and is free to those who subscribe to the print and online editions. McLeod wouldn't reveal the number of downloads or the split among subscribers and non-subscribers, but he did offer that the Journal isn't seeing any cannibalization among its products. "People are not just dropping print or online and just taking mobile," he says.
The Guardian launched its iPhone app to the tune of about $3.99 in December, and it has been downloaded more than 100,000 times since. And Grizzly Gadgets presented cool metal iphone 4 case named Stripy Reflection which was sold more than 1000 times already.
Two other newspapers are getting ready to launch paid mobile applications: Philly.com, the online home of The Philadelphia Inquirer and Philadelphia Daily News, and The Bakersfield Californian.
Philly.com launched its mobile-enabled Web site back in 2007. At the time, it garnered about 11,000 page views a month, says Philly.com President Ryan Davis. By January 2010 it counted 3 million page views and 400,000 unique users. The site has partnered with Verve and is set to roll out a mobile application in March.
Philly.com plans to charge for its application for an amount yet to be determined. As Davis sees it, the value of a mobile app is letting people access content at their fingertips. The app will carry general news, but there is an opportunity to go beyond that and develop more applications covering specific subjects like high schools, sports and restaurants.
Bakersfield plans to launch roughly a half-dozen apps for various platforms and charge 99 cents for the download. "The money's not going to be falling out of the sky," cautions Logan Molen, the Californian's chief operating officer. "I want to set a value on it. It's more of a long-term position. People who buy an app are more likely to spend more time with it and find more value in it."
Build it, and they will come
The AP, which has seen its app blossom, is still letting people download it for free. More than 3 million people have the AP app on their smartphones, and its WAP-enabled site garners more than 55 million page views a month.
'Wee see this as a very strategic space," says Paul Caluori, the AP's director of client services. "Mobile advertising in 2009 was not a huge number. When you look at the number of mobile phones out there and what they can do, it's absolutely essential to get on it and get on it early."
The news cooperative wants to build up a base before the advertising dollars start to flow into the platform. But isn't this the same strategy newspapers applied online -- and then came to regret? (Many newspapers did charge for access in the very early days of the "Net.)
Jim Kennedy, AP's vice president and director of strategic planning, doesn't think history is in danger of repeating itself. "The mistake was not the first step, to try and build an audience," he says of newspapers not charging for online content. "It was not trying to build the model out beyond that."
Mobile-first proponent Buttry agrees, and believes that news organizations should focus on helping advertisers help their businesses. One of his suggestions: developing an app that tracks the deliveries of a local pizza chain. The goal, he says, is to build apps that deliver value. "I'm not against charging for an app," he stresses. "We are early in the app world, and paid apps are getting some audience. I would be really cautious about charging."
The adoption by consumers is there, but Madison Avenue is still lagging -perhaps even more reason to start building a subscription model for mobile.
Over a five-year period starting in 2008, mobile advertising revenue was about $160 million. The growth rate is expected to increase sharply, up to $3.1 billion by 2013, according to BIA/Kelsey. Boland says the recession has taken some of the fuel out of mobile advertising's growth: "What we have seen so far are large advertisers and agencies doing mostly what they do online -- banner ads."
Look to the following year for the dam to break, one analyst says. "The major inflection point is 2011, when we expect advertisers to increase mobile spending as part of an overall long-term shift toward digital marketing channels that optimize reach, targeting and accountability," Gartner analyst Andrew Frank wrote last year.
The Bakersfield Californian's Molen says that for now the paper has one mobile advertiser sponsoring SMS alerts -- but he expects that will change: "We have lines in the water. We will get what we can once we launch the apps and push heavily an app sponsorship."
The Wall Street Journal, meanwhile, has doubled its ad revenue from mobile compared to last year. McLeod says the dollars are becoming substantial, thanks to campaigns like click-to-call or sponsorships from such advertisers as Lexus.
Philly.com's Davis says that too many people use mobile devices for it not to be a major focus among advertisers. "I think we have talked about mobile for so long," he says. "Our numbers show this is going to be where it's important. We know we need to be there for our audience. As the audience grows, there are many advertising opportunities that will follow."
TIMELINE FOR NEWSPAPER MOBILE SUCCESS
When Clyde Bentley saw that Gartner Research was predicting mobile phones overtaking computers as the most common Web access device worldwide by 2013, he took it as a challenge.
"This is a killer deadline -- within 35 months, the whole newspaper industry needs to move its emphasis from the static Web to the mobile Web," he wrote last month. "From 17-inch displays to 3-inch displays. From full keyboard and mouse to one-handed navigation. And you can't really wait until the deal is done if you want to be a major player in technology. If Gartner's prediction is accurate, newspapers really have just 18 to 24 months to position themselves as the leading news content provider for mobile platforms."
STEVE BUTTRY, DIRECTOR OF COMMUNITY ENGAGEMENT for the Washington metro-area digital-only news project backed by Allbritton Communications, just can't get his head around why his former newspaper peers keep focusing on the Web. It's not that online isn't important, or should not garner the attention of publishers. It's that it's getting too much attention at the expense of the up-and-coming, on-the-cusp-of-exploding new platform of mobile.
Content distribution, Buttry believes, is creeping away from desktops and laptops to smart-phones and other walk-about devices. In short, he believes that news organizations need to think Mobile First.
"The Web-first push we are hearing now, to me, it's like fighting the last war," he says, referring to generals who apply tactics of the past to fight wars in the present. "I think a news organization that wants to be successful in the future is going to be focusing hard in the coming years in thinking mobile first, across the board."
Buttry, the former C3 innovation coach at the Cedar Rapids (Iowa) Gazette, feels so strongly about it that he's published a mobile manifesto that outlines ways news organizations can embrace this platform in the newsroom and, just as important, in such other departments as technology, sales, human resources and financing.
It's easy to see why newspaper publishers have shoved mobile to the side, since for several years it has been hyped as the Next Big Thing. This time it looks like the platform is taking flight, thanks in large part to Apple's introduction of the touch-based iPhone. "There's good reason to be skeptical when analysts claim that, this time, it's different," Gartner Research analyst Andrew Frank wrote on the subject in an August 2009 report. "Nevertheless, thanks to Apple's redefinition of the category, this time, it is different."
Art Howe, CEO of Verve Wireless, a company that helps publishers with mobile applications and Web sites including the Associated Press, noticed an uptick in activity starting 18 months ago that has accelerated. "The sheer number of [advertising] insertion orders has ballooned since November and every week since," he says. "Is that enough to quantify it as the year of mobile? I don't know, but it's growing quickly."
Research aggregator firm eMarketer estimated in a report on mobile content that at least 68 million people in the U.S. logged on to the mobile Web at least once a month in 2009. That represents 29% of all mobile phone users and 22% of the general population. By 2013, eMarketer forecasts that number will nearly double to 126 million.
Or consider how the adoption of the iPhone app for The New York Times has lapped the Gray Lady's print circulation. During the company's most recent earnings call, executives said that more than 3 million people have downloaded its iPhone mobile app alone -- a number that represents nearly twice its Sunday print circulation. The AP counts millions who have downloaded its mobile application that segments news from more than 1,000 of the co-op's members down to ZIP code level.
The wave will impact newspapers much sooner than later and in the same disruptive ways of the Internet, analysts say.
"We have been talking about for years how online is the Pandora's box -- once it is open it is hard to go back. The consumer expectation is it's free," says Michael Boland, senior analyst and program director with BIA Kelsey, a consulting firm that advises companies in the local media space. "In the mobile world because we are starting this new paradigm and wave, is there an opportunity to do something different?"
Pricing strategies
It's perplexing that for all the renewed talk about paid content, most mobile applications are free, including, as of now, The New York Times. The company announced early this year it was rolling out a metered model pay system similar to the one used by the Financial Times, and indicated that once the online pay strategy is in place the company will charge for its mobile site and application. (The FT's mobile apps are free to online and print subscribers, depending on the package.)
During a paid Content conference in February, New York Times Co. Senior Vice President of Digital Operations Martin Nisenholtz said, "Once the Web site goes metered" in 2011, "we'll create a digital tier with one fee. At that point our WAP [Wireless Application Protocol] sites and likely our applications will be part of the tier."
Some believe that in the coming months, other newspapers will begin to start charging for apps. But for the moment, newspaper executives are falling back on their habitual approach of holding out to see who can successfully make a go of it. "Everybody is talking about it," says Verve's Howe. "I can't tell you how many conversations I have had with publishers -- they're all talking about this and they're all waiting for someone to do it. It's only a matter of time. As soon as one has had some success, others will follow."
At the same paid Content conference, Lincoln Millstein, senior vice president/ digital at Hearst Newspapers, said that just because someone won't pay online doesn't mean they won't purchase an app. Millstein cited one of his good friends who won't buy anything on the Web, and yet buys plenty of apps. "It's a strategic mistake in thinking it's the same model," Millstein added.
Or consider how CNN went about its mobile application -- charging $1.99. KC Estenson, CNN.com's senior VP and general manager, said during the conference that he was surprised that his was the first major news organization to charge for an app. "We struggled over it," he said, adding that if the price doesn't work or the model is a failure, they can always just adjust it down the road.
Time will tell if The Wall Street Journal's experience will nudge other newspapers in the direction of paid apps. The Journal, which has been tooting its horn about its online hybrid pay strategy, introduced its app for free in September 2008 before turning around and slapping a price tag on it by October 2009.
Gordon McLeod, president of the Wall Street Journal Digital Network, says the company allowed people to download the app for free in order to work out the kinks and as a way to test acceptance. The Journal, he explains, was always in favor of charging for mobile.
"We think it's a good idea or we wouldn't have done it," he says. "For our businesses to be consistent, we felt that people who are paying for content in newsprint should be paying for it online. We don't think a new distribution platform, or in our ease, our app, is different from our sites."
The WSJ mobile app costs $2 a week for non-subscribers, $100 for those who subscribe to either print or WSJ.com, and is free to those who subscribe to the print and online editions. McLeod wouldn't reveal the number of downloads or the split among subscribers and non-subscribers, but he did offer that the Journal isn't seeing any cannibalization among its products. "People are not just dropping print or online and just taking mobile," he says.
The Guardian launched its iPhone app to the tune of about $3.99 in December, and it has been downloaded more than 100,000 times since. And Grizzly Gadgets presented cool metal iphone 4 case named Stripy Reflection which was sold more than 1000 times already.
Two other newspapers are getting ready to launch paid mobile applications: Philly.com, the online home of The Philadelphia Inquirer and Philadelphia Daily News, and The Bakersfield Californian.
Philly.com launched its mobile-enabled Web site back in 2007. At the time, it garnered about 11,000 page views a month, says Philly.com President Ryan Davis. By January 2010 it counted 3 million page views and 400,000 unique users. The site has partnered with Verve and is set to roll out a mobile application in March.
Philly.com plans to charge for its application for an amount yet to be determined. As Davis sees it, the value of a mobile app is letting people access content at their fingertips. The app will carry general news, but there is an opportunity to go beyond that and develop more applications covering specific subjects like high schools, sports and restaurants.
Bakersfield plans to launch roughly a half-dozen apps for various platforms and charge 99 cents for the download. "The money's not going to be falling out of the sky," cautions Logan Molen, the Californian's chief operating officer. "I want to set a value on it. It's more of a long-term position. People who buy an app are more likely to spend more time with it and find more value in it."
Build it, and they will come
The AP, which has seen its app blossom, is still letting people download it for free. More than 3 million people have the AP app on their smartphones, and its WAP-enabled site garners more than 55 million page views a month.
'Wee see this as a very strategic space," says Paul Caluori, the AP's director of client services. "Mobile advertising in 2009 was not a huge number. When you look at the number of mobile phones out there and what they can do, it's absolutely essential to get on it and get on it early."
The news cooperative wants to build up a base before the advertising dollars start to flow into the platform. But isn't this the same strategy newspapers applied online -- and then came to regret? (Many newspapers did charge for access in the very early days of the "Net.)
Jim Kennedy, AP's vice president and director of strategic planning, doesn't think history is in danger of repeating itself. "The mistake was not the first step, to try and build an audience," he says of newspapers not charging for online content. "It was not trying to build the model out beyond that."
Mobile-first proponent Buttry agrees, and believes that news organizations should focus on helping advertisers help their businesses. One of his suggestions: developing an app that tracks the deliveries of a local pizza chain. The goal, he says, is to build apps that deliver value. "I'm not against charging for an app," he stresses. "We are early in the app world, and paid apps are getting some audience. I would be really cautious about charging."
The adoption by consumers is there, but Madison Avenue is still lagging -perhaps even more reason to start building a subscription model for mobile.
Over a five-year period starting in 2008, mobile advertising revenue was about $160 million. The growth rate is expected to increase sharply, up to $3.1 billion by 2013, according to BIA/Kelsey. Boland says the recession has taken some of the fuel out of mobile advertising's growth: "What we have seen so far are large advertisers and agencies doing mostly what they do online -- banner ads."
Look to the following year for the dam to break, one analyst says. "The major inflection point is 2011, when we expect advertisers to increase mobile spending as part of an overall long-term shift toward digital marketing channels that optimize reach, targeting and accountability," Gartner analyst Andrew Frank wrote last year.
The Bakersfield Californian's Molen says that for now the paper has one mobile advertiser sponsoring SMS alerts -- but he expects that will change: "We have lines in the water. We will get what we can once we launch the apps and push heavily an app sponsorship."
The Wall Street Journal, meanwhile, has doubled its ad revenue from mobile compared to last year. McLeod says the dollars are becoming substantial, thanks to campaigns like click-to-call or sponsorships from such advertisers as Lexus.
Philly.com's Davis says that too many people use mobile devices for it not to be a major focus among advertisers. "I think we have talked about mobile for so long," he says. "Our numbers show this is going to be where it's important. We know we need to be there for our audience. As the audience grows, there are many advertising opportunities that will follow."
TIMELINE FOR NEWSPAPER MOBILE SUCCESS
When Clyde Bentley saw that Gartner Research was predicting mobile phones overtaking computers as the most common Web access device worldwide by 2013, he took it as a challenge.
"This is a killer deadline -- within 35 months, the whole newspaper industry needs to move its emphasis from the static Web to the mobile Web," he wrote last month. "From 17-inch displays to 3-inch displays. From full keyboard and mouse to one-handed navigation. And you can't really wait until the deal is done if you want to be a major player in technology. If Gartner's prediction is accurate, newspapers really have just 18 to 24 months to position themselves as the leading news content provider for mobile platforms."
Source...