Business information written specifically for newspaper advertising departments

Can the iPad Save the Newspaper Industry?

“Readers are spending three times as long inside their new iPad app than on websites.”
When Apple released the iPad in April 2010, people saw it as just that. Media mogul Rupert Murdoch quickly jumped in to endorse the iPad: “It may well be the saving of the newspaper industry.” Still, some were skeptical that this was just over-sensationalized hype that publishers were eagerly grasping at to keep hope alive.

In an industry that has been stressed by years of increased newsprint costs and declining advertising revenue, people have long been waiting for a white knight to come to the rescue. When Apple released the iPad in April 2010, people saw it as just that. Media mogul Rupert Murdoch quickly jumped in to endorse the iPad: “It may well be the saving of the newspaper industry.” Still, some were skeptical that this was just over-sensationalized hype that publishers were eagerly grasping at to keep hope alive, as Roy Greenslade argues in his article “Is iPad Really Digital Saviour of Newspapers? Don’t Bet On It” for thisislondon.co.uk.

Now, a few months after it’s initial release, reports are starting to come in. Major news affiliates have already started to see a spike in revenue from their apps. Greenslade reported that “Reuters news agency claims that its readers are spending three times as long inside their new iPad app than on its website.”  So are these signs of a promising new future for the publishing industry? Or just the initial excitement of the next new fad?

HOW THE iPAD CAN HELP THE NEWSPAPER INDUSTRY

People see the benefits of the iPad for two reasons. First, it offers a chance for publishers to increase revenue through yet another medium to distribute their product and advertisements. Skeptics argued that consumers wouldn’t want to pay for iPad apps, since consumers have been reluctant to pay for online newspaper subscriptions. However, reports show that paying for a mobile app appears to be more palatable to consumers. The act of purchasing a download makes the product far more tangible than purchasing access to a website.

This leads me to the second reason: the design, portability and tangibility of the iPad helps to reclaim the essence of a newspaper. The size makes it much more readable than other mobile devices for lengthy texts as well as high-quality advertising. By reconstituting this essence, the iPad will “replicate some of the value—and business models—of published periodicals,” Khoi Vinh explains in “Jobs Saves?” published in Print magazine. Vinh argues that one of the reasons consumers are reluctant to pay for online subscriptions is because the Internet, which mostly relies on template design, cannot replicate the rich value of a printed newspaper.

The iPad has the potential to garner the same kind of continuous engagement that you can get from TV but with the interactivity and measurability of the Internet.”

~Shiv Singh

ADVERTISING ON THE iPAD

In his article “Advertising on the iPad, What to Expect” Shiv Singh, author of GoingSocialNow.com, explores the early findings of iPad advertising. His report shows that the iPad “has the potential to garner the same kind of continuous engagement that you can get from TV but with the interactivity and measurability of the Internet.” This corroborates Reuters’ claims that people are spending more time with reading news on their iPads than on the Internet. Conde Nast reported that their average readers spend approximately 60 minutes with each monthly iPad issue, in comparison to Vanityfair.com’s 2.1 minutes per month on their online magazine and GQ.com’s 3.8 minutes.

The iPad’s immersive experience leads to greater branding potential, which can arguably hold a higher advertising price. According to USA Today’s model, they charge $50 for every thousand times the ad appears on the iPad, as opposed to the $10 for online ads and the $103 for a full-page color print ad.

Early mobile banner ads’ click-through rates are already starting to surpass those of traditional online banner ads. Singh references Chase’s advertising campaign with the New York Times application that aimed at a target audience of the top 15% earners and iPad owners.

The campaign garnered an astonishing 15% click-through rate. Though Singh isn’t suggesting that all click-through rates will continue to be this high, he does go on to state that it’s a good sign for the advertising medium and that “if the ads are targeted sharply and are immersive compelling experiences, they’ll attract users for deeper engagement.”

CUSTOM CONTENT + TARGET AUDIENCES = HIGH ADVERTISER INTEREST

In July 2010, Sports Illustrated launched their iPad application boasting a more custom and in-depth product that seems to warrant the higher sticker price ($4.99). Along with this higher price and customer content comes higher advertiser interest. Advertisers jump at the chance to direct their advertisements at a targeted audience, which can lead to higher click-through rates.

The Wall Street Journal sold their iPad advertising in a large print-online-iPad combination package to only a mere six advertisers. By utlizing a such a small number of advertisers, the Wall Street Journal offered them a deep branding experience, rather than advertising based on impressions, which could garner a higher price.

With two potentially profitable avenues to take—subscription or advertising—it’s unclear with is the better method. USA Today originally planned to start charging for their iPad application after an initial 90-day trial period. But after receiving strong advertising reception, decided to keep it as a free application. While the Wall Street Journal opted for something in between: they chose a model that offered a few sections, with advertising, as a free iPad app, and once they sign up for the paid subscription, they get access to more sections of the newspaper.

With the iPad still in its infancy, it’s unclear if it will indeed be the savior that everyone is looking for. But there is no doubt that there is great potential to be had for the publishing industry.