Newspaper publishers need to quickly solve a troublesome equation. As carbon-based readership keeps dwindling, the growing legion of digital readers is poorly accounted for. This benefits advertisers who pay less for their presence.
Putting aside web sites audience measurement, we’ll focus instead on the currently ill-defined notion of digital editions. A subject of importance since digital editions are poised to play a key role in the future of online information.
First, definitions. The International Federation of Audit Bureaus of Circulation (IFABC) makes several distinctions that are adopted by most certification agencies around the world. The most straightforward is the “Digital Version” of a publication based on PDF. To be counted in the paid circulation of a newspaper or a magazine, a Digital Version must carry the same editorial content as well as the same advertising (volume and placement) as the paper version.
The second category, “Digital Edition”, is much fuzzier. Digital Editions come in different sizes and shapes, tailored for tablets or smartphones. Examples include The Guardian for iPad, Bloomberg Business Week+ and The Economist versions for iPad or iPhone (see previous Monday Note The Capsule’s Price). These editions have little to do with the print version. They are usually loaded with the same set of stories as their paper sibling, but add more pictures and, sometimes, animated infographics and video. The layout is designed to fit gesture-based navigation. Ads are different, too: far fewer modules, but with multiple screens and multimedia packages. The idea is less ads carrying more value per unit.
Here comes the absurdity.
Digital Versions (in PDF) are often hosted by digital kiosks carrying hundreds of publications, most often magazines in PDF facsimile. On many such kiosks, the best-selling product is the all-you-can-eat flat plan; for users, the 20 dollars or euros per month plan encourages indiscriminate downloading. I chose the word users on purpose. Readers would be presumptuous. On their first month, users will download about 60 to 80 publications. After a quarter or so, downloads stabilize to about 30 publications a month. Are those actually read? Maybe some, but the rest of the bulk is barely leafed through. As a result, the value of the advertising carried by these glanced-at publications trends to zero (the value of an ad being — at least in theory — a function of the eyeballs it will capture). It’s ridiculous to expect a “reader” who gulps down 30 publications to memorize a stack of 40 ad pages.
Nevertheless, such Digital Versions fall into the crucial “paid circulation” category which is still, unfortunately, the main gauge of market performance.
Noticing the absurdity of the open-bar kiosks, various circulations bureaus across the world have worked on ways to account for the behavior of this super-fly-by readership. In France, the OJD says that, in order to be counted as sold, the revenue derived from a digital publication must be higher than 25% of the single copy price, all taxes included. As an example, let’s take a user who opted for a €20 monthly unlimited plan, downloading 40 magazines in one month, each priced at €4.00 in a physical newsstand. To be counted as a valid sale, each magazine should bring at least €1.00. But a consumption of 40 magazines for €20 will only yield €0.5, half of the required minimum. Therefore, the OJD will only count half of the volume sold.
These audit agencies efforts are fine but, regardless of all the tweaks in the way copies are counted, they don’t solve the problem of ads that remains vastly inefficient.
Turning now to Digital Editions, their adaptation to the needs of tablets and smartphones much improves advertising performance. Modules will be fewer, but far more engaging. Interactive ads will lead to what marketers call transformation, which is when someone actually orders an item or interacts with a seller (by requesting a test-drive of a car, for instance). All such things are impossible with a static ad embedded in a PDF.
In addition, Digital Editions can point to an individual reader. When I subscribed to the iPad version of the Guardian, or of BusinessWeek, I actually gave permission to what I consider trusted editorial brands to get my coordinates from Apple. (For high quality publications, the rate of opt-in is said to be above 50%. Not bad.) Practically speaking, it means the publisher will be able to directly interact with me. And, in the near future, for my very own digital edition, that same publisher will inject ads tailored to my socio-demographic profile, my location, etc. (don’t rush folks, I can wait for this type of targeting).
Summing-up: We have Digital Versions that are basically PDF images of the original print publications and Digital Editions that are more sophisticated and built — for obvious reasons — on different structure.
And guess what? Most circulation bureaus segregate the two products; static ones are counted in the paid-circulation line — and consolidated with the paper’s global circulation — but the tablet or smartphone-designed versions appear in a separate line.
No big deal, you might say. But it actually is.
Problem is, media buyers almost exclusively consider the aggregated figure. They tend to overlook the value of itemized lines. As a consequence, the most sophisticated products, the ones able to deliver engagement and value to advertisers are simply ignored.
Hence the publishers’ furious lobby to convince circulation bureaus to include Digital Editions in their global circulation numbers.
The British Audit Bureau of Circulation was quick to understand the importance of aggregating all forms of circulations on the sole basis of the editorial content. Probably because many UK publishers developed good tablet and smartphone editions. Just a year ago, they issued this unambiguous communiqué:
ABC announced today that it has agreed new Reporting Standards that will allow publishers to present both print and digital editions on one certificate. This offers more flexibility to publishers in how they can claim digital editions.
The new Cross Platform Certificate of Circulation enables publishers to provide a single view of their circulation figures. This includes the circulation of digital editions of magazines designed especially for mobile devices such as Apple’s iPad.
In many countries the issue is still on the table. To their consternation, newspapers and magazines publishers see the constant erosion of their paper versions; at the same time, they are required to serve the booming tablet and smartphone markets with dedicated digital editions that remain undervalued by the advertising community. Frustrating.