Hearst is reaping serious digital profits; plus, can readers discern native advertising content from editorial content?
Digital profits are what it’s all about, right? This business is about results, not process, and with a business operating with a small margin of error, the more inroads publishers can make with digital, the better chance they have of staying competitive and rising to the top of a crowded field.
For us, digital ultimately comprises 90% of a successful publishing enterprise — from apps to online magazines to white papers to subscriptions and much more — and our mission revolves around helping magazines transition to a successful digital existence. Many Mequoda Members, though, are niche and regional magazines, with a few majors and general-interests thrown in.
So, in other words, when we hear that digital profits are driving one-third of a publisher’s success, we’re not surprised. But when we hear that digital profits are driving one-third of a legacy publisher like Hearst’s success, we are surprised.
MediaPost has that scoop, plus some more news on native ads.
One-Third of Hearst Profits Are Digital Profits
Yep, you heard MediaPost right: Nearly one-third of Hearst’s U.S. profits are digital profits.
“At a time when it has become harder to find reliable data about the magazine industry’s overall financial performance, information from individual publishers gains even more significance as a bellwether for the broader business — especially regarding the critical subject of the transition to digital platforms. On that note, digital businesses contributed over 30% of Hearst’s total profits in the U.S. in 2015, according to Hearst President David Carey’s annual letter to employees rounding up the past year,” Erik Sass writes.
“It should be noted that this statement is not a financial sleight of hand: Carey stated that Hearst’s overall profits are up in 2015, and even surpassed its profits in 2007, so digital is in fact contributing a bigger piece of a bigger pie (unlike other companies where digital’s share increases proportionally, but only because the overall figure fell so much, reflecting big declines in print ads). Total digital revenues were up 35% in the U.S., although Carey didn’t share a specific dollar figure.”
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Here Are MediaPost’s 5 Best Native Ad Campaigns of 2015
Native ads are all the way in. Like, they’re white-hot.
Seems like every industry monitor mentioned their top native campaigns in time for the New Year.
“Cocaineomics”/Netflix and The Wall Street Journal; “People’s Voice”/Marriott Hotels Reddit Campaign; UK “Quit” campaign; Condé Nast’s Bon Appétit cover sponsored by Samsung; “A race through time,” Forza and Mashable.
One Study Shows Native Ads Are No Different to Consumers
But did readers even know they were seeing digital advertising with those campaigns?
Last week, we relayed the news that the FTC has released new policy guidelines for native advertising content, and a recent study from Grady College published in the Journal of Advertising seems to validate the desire for clarity in disclosure and labeling, according to an article in MediaPost’s Publishing Daily.
“Overall, only 17 out of 242 subjects, under 8%, were able to identify native advertising as a paid marketing message in this experiment. The experiment also revealed that consumers are seven times more likely to identify paid content as a native ad when it is marked with terms like ‘advertising’ or ‘sponsored content’ than if it carries terms like ‘brand voice’ or ‘presented by,'” Sass writes.
“In the second experiment, the researchers used eye-tracking technology to determine the most visible positions for placement of disclosure labels in articles. Here the researchers found that placement in the middle of the page was more than twice as visible as placement at the top of the page, as 90% of subjects saw the former compared to just 40% of the latter. Some 60% noticed the label at the bottom of the page. But even when they noticed the disclosures, subjects didn’t necessarily make the connection. Just 18.3% identified native ads as paid messages in the second experiment.”
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To read more about digital profits and other publishing industry news, visit MediaPost.