Publishers have been anticipating resurgence in their fortunes in six months’ time for the last eight years. Suddenly that resurgence may be upon us.
It’s not universal, but time and again these days, I look at yet another set of publisher’s data and see tangible signs of what I call the “point of inflection;” the moment in time when declines in print — revenue and profitability — are being exceeded by the growth of those in digital. I first wrote about this in November 2006. But at long last, this position has changed for a number of publishers, and many more are likely to see a positive future soon.
Three factors are driving this. The first is engagement, the intensity of consumption, in terms of times visited per visitor, pages viewed per visit, and time spent. For years total impressions were driven by the number of visitors with — in many cases — new visitors viewing fewer pages. Now we are seeing average engagement scores rising as many publishers are working hard to drive consumption levels.
It’s always instructive to note that while more than 60 percent of U.S. Internet users may visit a newspaper website monthly, they contribute only 8 percent of visits, around 1.8 percent of time spent and around 1.4 percent of pages visited. The figures vary by country of course, with Latin America showing the highest levels of engagement and North America the lowest.
The second, and by far the most exciting, development is the astonishing impact that mobile devices — phones, tablets — are having not just on news consumption but also usage. Consumer behavior is changing so fast it is actually quite hard to paint a true industry picture, but we are certainly in a whole new revolution — at least among those publishers who are embracing the opportunity with creativity, flexibility and resources.
This group, which I estimate accounts for less than a quarter of all publishers in Western markets, are enjoying mobile audiences at least as large as those on fixed devices. Some of this is at the expense of fixed device access, but the overall result is a far greater audience, often with very different uses, content choices and strong use of social networks.
A second group is seeing mobile audiences between 25 percent and 75 percent of fixed digital, again with audience transfer. Typically, page views are around two-thirds of those on fixed devices, but many publishers are reporting engagement levels on tablets equivalent to those in print with similar reading times.
Encouragingly, advertising effectiveness is also showing remarkable results on tablet media. News UK recently studied readers of news of both tablet and print versions of their titles. The results showed that recall, those who recognize adverts, increased by up to 137 percent. Call to action, adverts which make a reader more likely to make a purchase, increased by up to 176 percent and the halo effect, the extent to which an ad makes the brand more reputable, increased by up to 61 percent. Video is increasingly delivering response levels that are multiples of static advertising.
Social platforms’ role
The third factor is undoubtedly the role of social networks, such as Facebook and Twitter. Here I have to confess, that, in Spring 2012, I speculated that Facebook might fall victim to the death of the lifecycle, that is, the ever shortening period that products experience to come to market, grow and diversify before reaching the peak of their lifecycle and drifting into oblivion. My prediction seemed to be confirmed when on May 18, 2012, Facebook launched onto the NASDAQ at $38. As the price fell to a low of $18, the BBC described Facebook’s market debut as “one of the most troubled of recent years.” Well I’m delighted to say that I, and many other observers were completely wrong. First, because Facebook is now turning a healthy profit and boasts a share price of $65. Secondly, one of the biggest beneficiaries of the Facebook phenomenon is proving to be the newspaper industry, and Twitter, to a lesser extent, deserves its share of the glory. Facebook’s annual revenue per monthly user is around $6.4. Twitter’s is around $2.8. Interestingly, around 75 percent of their visitors are via a mobile device.
While the communication of stories, interaction with users, creation of interest groups and campaigns are all logical developments, what has surprised me is the extent to which these services are generating new traffic back to their parent services.
The combination of mobile and social networks is the potent vehicle by which newspapers can recover their audiences and revenues, but early indications are that those publishers who have adopted the three factors I have described above have now crossed that point of inflection.
It has been a long time coming, but today many publishers are enjoying growth in profits, product diversity, resurgence in community interaction and influence. More will follow.
Jim Chisholm is a Glasgow, Scotland-based consultant. He can be reached at email@example.com.