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The Momentum of Tablet Monetization

Online publishers find success with digital magazine content

For some online publishers, 2011 can be considered as the year digital became “solidly profitable”.

These words came from David Carey, Hearst Magazines President, in a memo sent to employees. With over 400,000 digital editions sold each month, Heart has found digital to be a profitable medium for their magazine content.

Hearst’s goal for 2012 is to sell more than one million digital products each month through retail partners iTunes, Zinio, Nook, Amazon and Next Issue Media.

Hearst is not the only publisher experiencing success with digital publishing. The Economist reported a 6% year-over-year increase in the group’s operating profit. They also reported a revenue increase of 4%.

With a predicted growth rate of 33.7% per year until 2014, these current digital profits may reach new plateaus.

Let’s take a look at some of the reasons why tablets are helping digital publishers monetize their magazine assets, and some of the strategies these publishers are working on for 2012.

Reasons for success

Technology: With more than just the iPad on the market, and the price of tablets decreasing significantly, tablet devices are more prevalent and more affordable. This current truth is leading publishers to think more about the manner in which consumers use tablets. One of Hearst Digital’s plans for 2012 involves deploying HTML5 throughout their portfolio. This change is expected to create “a far better user experience on mobile devices.”

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Partners: With growth in the market and digital publishing success recognized as a possibility, more advertisers are turning to digital, especially as part of a package campaign (print, digital, online, etc.). Hearst Digital realized this with recent collaborations that created “deeply integrated, cross-platform shopping experiences” that utilized media brand influence. According to Grant Whitmore, VP Digital for Hearst, these campaigns resulted in “customer purchases and higher conversion metrics.”

Consumers: As publishers realize the importance of digital publishing, more are taking steps to understand how their audience feels towards tablets. Interweave surveyed their audience in their Tablet Ownership Survey to find out how many are fully able to consume their digital products. This information helps publishers determine the amount of attention that should be given to their premium digital products.

Strategies for the future

Advertising on tablets will be an area deserving of attention going forward in the tablet revolution.

Unsurprisingly, Google has already launched their attempt at infusing rich media into tablet advertisements. The announcement came last month, when the company released information on their new ad templates.

According to Google, “consumers don’t view ads differently on tablets, but they do expect more interactivity.”

Google’s ad templates range in variety from slideshows and galleries to 360 showcases. There is even a template for local search, with the expectation of driving foot traffic.

As tablet users expect high quality advertisements, and want the ability to purchase directly from digital content, new ad formats will play a part in the overall acceptance and appreciation of digital content.

Where do you think digital advertising will go for tablet devices? Please add your thoughts to the comments below.

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3 Responses to “The Momentum of Tablet Monetization”

  1. David Ball Says:

    Can we get a better definition of “sold”? Even with a publisher the size of Hearst selling one million of anything a month is quite a feat. Do they mean one million units “billed” a month? That would make more sense when a number of these companies are doing monthly “til forbid” billing. Just asking.

  2. Kim Says:

    Hi David,

    I agree it’s quite a feat. Carey’s memo to his employees said “our target is to reach more than one million paid digital subscribers per month via iTunes, Zinio, Nook, Amazon and Next Issue Media” which to us, presumably includes annual subs, month to month subs and perhaps even single copies sold for a given issue.

    We’ll be anxiously waiting and watching for new data to be released!

    Thanks,

    Kim

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