Digging into Digital

By 2021, 33% of the total industry’s revenues are predicted to be digital – a shift in share of +7% points in just two years.

Yet that topline trend conceals significant variances. Firstly, between industry sectors, where both Consumer and News Media are lagging well behind B2B. Secondly, there is a massive range at individual company level – a number of media companies in the survey had zero digital revenues, whilst others were 100% digital pure plays. Yet drill down deeper and take a look at what it is companies are actually doing in digital and the picture is fascinating. And even more varied.

The digital activity priority map

Behind all the hype about the sexy “shiny new things” such as VR and AR, the day-to-day priority list for the next twelve months for most publishers is much more mundane.

The scattergram (which is for Consumer Magazines) maps 26 digital activities which the participating companies ranked by two factors:

• Investment Focus Score (“On a scale of 1 to 10, how much focus in terms of investment – time and/or resource – will be given to each area over the coming 12 months?”). The further over to the right on the map, the more important the activity is.
• Financial Importance in terms of revenues / monetisation potential over next 12 months. The higher up the map, the better the short-term monetisation prospects.

Tracking the hot digital consumer media platforms

• Publishers’ own branded websites. This is by far the industry’s highest priority for digital development. This ranges from basic mobile optimisation through to paywalls (an increasing activity in News) and on to automated and personalised content delivery and ecommerce. However, it is clear that magazines are having many more challenges trying to monetise paid content on web platforms than newspapers.
• Social media (both a branded presence and off-platform, distributed content) have low ROIs and polarise opinions among publishers as to whether this whole area is a valuable audience builder or a complete waste of time and effort in terms of monetisation. Twitter, Facebook, YouTube and Instagram still dominate, but messaging apps are becoming more mainstream, and the relative importance of other social platforms is constantly shifting.
• Email newsletters (both paid and free) are a trusty, old “factory” activity which is receiving ongoing and renewed focus currently. B2B is monetising them more strongly, while Consumer tends to use them more as free, acquisition tools or as added-value elements in an overall subscription, rather than as standalone, paid-for products.
• Branded apps are still on the list of platforms, but they are being used increasingly as a value-adding engagement service for retaining existing users rather than a front-end acquisition platform.
• Video channels are rapidly coming up the priority list, whilst Voice Activated Assistants (VAAs) are on everyone’s radar, but on few companies’ immediate activity list outside the major publishers. However, they have helped to reactivate audio products, with the rebirth of the humble podcast.
• Issue-based digital magazines have turned into the low-profile workhorse of digital media, plodding away quietly in the background as more exciting platforms get more of the attention. However, the level of activity in the digital newsstand market currently is driving up volumes sold quite significantly.

Investing in the digital back-end

Digital is not just about the front-end of content delivery, but seeps through into every aspect of the organisation… ecommerce, automated customer service, dynamic pricing at acquisition, streamlined content management systems and other internal processes, smart payment options for different types of consumer… and so on. All of it is based on a deeper understanding of what the end consumer, as an individual, actually wants – “Insight” as it is labelled on the chart above. It is these more hidden activities which can deliver some of the biggest wins in operational efficiency.

There is a detailed story behind why each activity sits where it does on the map, but there are three over-riding conclusions. Firstly, that each company is building its own priority list to match what is required within its specific markets as well as what the actual capabilities that each company has. Secondly, there is a growing concern about balancing the need to increase the number of revenue streams against the dangers of trying to do too many things at once. Thirdly, although the survey shows that as an industry, we are getting much more proficient and confident about our tech capability, it still remains one of the weakest areas in the modern media business. Yet that is the theme of the next feature…

This article was first published in InPublishing magazine. If you would like to be added to the free mailing list, please register here.