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A conversation with David Rose, little magazine veteran and publisher of Lapham’s Quarterly
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Feb. 16, 2012, 10 a.m.
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The newsonomics of ads that go bump in the night

News apps like The Wall Street Journal’s are showing the potential of immersive, interactive advertising. But most news organizations aren’t in a position to take advantage.

We live in two worlds.

In the afternoon, on our desktops or laptops, we read news like the new Pew study showing yet another way that newspapers are going to hell. This one was hardly news to anyone in the industry, but it put the issue plainly, if dryly:

A new study of advertising in news by the Pew Research Center’s Project for Excellence in Journalism finds that, currently, even the top news websites in the country have had little success getting advertisers from traditional platforms to move online. The digital advertising they do get appears to be standard ads that are available across many websites. And with only a handful of exceptions, the ads on news sites tend not to be targeted based on the interests of users, the strategy that many experts consider key to the future of digital revenue.

Pew’s report underscores the fact that many of us have written about: Digital advertising, once the little sister, is surpassing print (newspaper and magazines) in the U.S. and Europe, and will pass whatever we mean when we say “TV” by 2016 or so. So news companies’ failure to get a larger piece of the fastest-growing ad segment — perhaps the fastest-growing ever — is a big problem. And the problem is growing: Three years ago, the top five digital companies took 63 percent of U.S. digital ad revenue; this year, they’ll take 72 percent, eMarketer estimates. Those companies: Google, Yahoo, Facebook, Microsoft, and AOL. That 9 percent differential is worth about $3.5 billion a year. Yes, it’s getting worse, by so many standards, as we’ll continue to see over the next month as final 2011 financials come in and more jobs go away.

If you’re in the publishing business, are your people building toolkits, experimenting, and getting faster at time-to-market?

In the evening, though, on our oh-so-lean-back tablets, we can open up our au courant news apps and face a quite different reality.

Open up The Wall Street Journal tablet app this week, and you’ll find a garden’s delight of interactive ads. These ads grab the potential of the tablet and run with it — joyously. They move beyond what we’ve known as “advertising” and sprint into a new field of commercial conversation. These truly interactive ads are increasingly targeted to users, but more importantly they attract top-end advertisers, at good rates, into news products.

An early adopter of the iPad — the Journal’s launch date of April 3, 2010, slips easily off the tongue of Daniel Bernard, chief product officer of the Wall Street Journal Digital Network — the WSJ has a half-dozen or so cousins in early experimentation. Add The New York Times, The Guardian, NPR, the Financial Times, Reuters, AP, and a few others to that short list of news companies with two years of development experience under their belts.

It’s the Journal, though, that seems to be making the most headway with this next generation of ads. In fact, perusing the Journal tablet edition reminds me of the wonder many felt viewing that Wonderfactory-created SI demo a month before Steve Jobs launched the iPad.

Consider a few of those ads:

  • Virginia is for (business) lovers: In touting its best-for-business credentials, the ad offers state-by-state comparisons, chosen by the reader, of five basic business rankings. Of course, the chosen stats are picked for their Virginia toutability, but the point is you have to interact. It’s supplemented by a five-minute video from the state’s governor.
  • Putnam Perspectives puts info first: Putnam Investments gives you plenty of places to sign up, but before it does that it offers numerous gateways to free teaser content. Blog posts (“Looking for signs of life in European markets,” “Default worries overdone, states finding stability”) offer analysts’ takes, in addition to survey data, infographics, and more.
  • Charles Schwab’s Windhaven portfolios of content: Tap into the Schwab ad and you get interactive charts, videos, and the reprint of an entire FT story on Windhaven.
  • Liberty from disaster: What’s better for an insurance company like Liberty Mutual than threatening you with disaster (tornado, earthquake, flood) and then, by simply tilting your iPad see the damage magically disappear. It’s a gimmick, but it makes its point, and for now, the gimmickry is still new and begs to be tried.

These aren’t ads that simply take you away to separate brand page when you touch it. They offer more useful information, within the app.

They are the fruit of the Journal’s partnering with top agencies and advertisers to build applications that take advantage of the tablet, a partnering that has been “top of mind for us,” Bernard says, for at least a couple of years. They begin to understand what the target audience wants beyond being “sold.”

This is information-as-advertising, advertising as a gateway to connection beyond simple pitch and simple impression. Brands are important here, but their ability to tempt engagement is the key.

Commercial conversation, especially targeted commercial conversation, is the Internet’s next generation of advertising. The first generation of impression-based web ads has been a low-clicking disaster. These new ads — some better executed than others, of course — insult our intelligence less and provide what we could call a freemium ad experience. We’ll pay you for your time, they whisper, by giving you information or perspective you may find useful, and then you may want to buy something from us. The play goes well beyond the Journal and business/financial products, of course, to cars, real estate, furniture, and health. Of course, any news (or entertainment or social) medium has to offer a ready-for-prime-time tablet experience in order to qualify for such commercial conversation. Those that don’t — or only put up barely interactive, PDF-plus tablet products — won’t fool readers or advertisers.

Of course, this new world of commercial swipes, taps, tilts and downloads is extremely measurable.  WSJ’s Bernard notes that each “event” — as our every touch of the tablet is called — can be recorded. Talk about metrics, data, and the emergence of conversion analytics. He notes that, at this point, “some advertisers ask for more event metrics, and some for less.” Interestingly, the Journal isn’t selling such high-touch ads on the basis of their effectiveness, although we can see models emerging as pay-per-touch, alongside pay-per-click and pay-per-action.  Rather, the Journal is making these ads part of its broader selling — some bundled with print and/or “online,” some not.

Bernard makes the point of how his product team — which serves both journalists and advertising staff — is focusing heavily on the tablet, given its unprecedented ability to get us to interact. He defines “mobile” and “tablet” separately for development purposes. The smartphone — with 257 million to be out there in America alone by 2016, according to Forrester — is a more elusive ad medium, its commercial potential so far under-realized. The tablet, though, with its print replacement + interaction abilities, offers game-changing selling and buying possibilities. For this interactive world, it’s beyond tilting and tapping — it’s time to shake, rattle, and roll the worlds of advertising.

So, yes, while the Pew survey accurately shows the sorry state of advertising readiness at many sites, the potential of harvesting the newest of news-heavy technologies offers the promise of a reprieve. Yes, news companies may have been slow to the parties of search, social, video, and mobile, and most have unfortunately taken a go-slow approach to the tablet — but platforms like the iPad offer a way out of the ad desert Pew paints.

In 2012, it’s still early, for both ad and editorial adoption of tablet benefits. “People are building toolkits,” he said. “They are experimenting. They’re making things easier to build.” If you are in the publishing business, are your people building toolkits, experimenting, and getting faster at time-to-market?

The ad interactivity we’re seeing is mostly app-based right now. HTML5 development for the iPad’s Safari browser is next up for the Journal. Various flavors of responsive design — allowing content to format more automatically for multiple devices, as The Boston Globe has done — are in the works. Ironically, on an average day we may see more touchable interactivity in ads than in editorial. Yet the editorial future of swiping and swooshing, now typically saved for special projects, is right in front of us. As Raju Narisetti, late of The Washington Post and now returned this week to the Journal, has put it: The next big change frontier in news is the integration of journalists and technologists. Incorporating the real interactivity of this newest medium into the daily workflow of the news trade is but in its infancy.

POSTED     Feb. 16, 2012, 10 a.m.
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