Chris Llewellyn: seven things I learned this month
1. Magazine media groups have some of the biggest digital audiences in the world, but no-one seems to know
According to Google Analytics data, at the end of 2014, Hearst’s gross digital ‘footprint’ was 279 million users – some 110 million in the US and 169 million in the rest of the world. Less than three months have passed, and Duncan Edwards, CEO of Hearst Magazines International tells me that these figures are up to 295 million and the rate of growth is increasing. This week, Axel Springer told FIPP it similarly has a gross digital audience of some 150 million across their media properties. These are staggering numbers in anyone’s terms.
2. Newsletters are booming
Every morning, some 600,000 people receive their requested email newsletter copy of the Daily Beast’s Cheat Sheet – a rapid digest of the important stories of the day. A year earlier, registrations were a mere 180,000. John Avlon, the editor-in-chief will be explaining how the Daily Beast is succeeding at our Digital Innovators’ Summit in Berlin on 23-24 March. But this is just one sign of how newsletters are flying at the moment. Even FIPP’s very own newsletter activity has seen significant growth this year. Quick-to-read, short articles, on the most important topics of interest, to a defined audience really work. They drive loyalty, they drive traffic back to the main site and sponsors like them. Interestingly, part of their success (according to Ken Doctor) is that newsletters mimic the daily rhythm and predictable lengths of print media with an edited choice to get to what matters.
3. There’s a fantastic opportunity for magazine media in India
I learned at the Indian Magazine Conference a couple of weeks ago that internet penetration in India is projected to grow by 100 million people per year for the next three years to 550 million, making it bigger than the USA and in fact the second biggest connected market in the world. The interesting thing is in the detail where the profile of web user will change – more rural, older, more likely to connect by mobile, and, crucially, more likely to be a non-English speaker. Vikas Agnihotri, Google’s man in India bemoaned the fact that there is a dearth of content in Hindi, Tamil, Gujarati and the like, and has urged Indian magazine publishers to think about the potential audience available to them in the future. International publishers who have so far viewed India as an English language market may want to check their strategies.
4. Digital advertising is like a bar-bell
I like the thought of using images to explain concepts. So I was delighted to come across one from Jack Griffin, former CEO at Time Inc. and Meredith, and now running the Tribune Group of newspapers in the US. At his results presentation he likened digital advertising to a bar-bell. On one side are the efficiently sold and managed programmatic digital display ads bought using automated technology, and the other side consists of big, custom “never been done before” ad programmes that command premium prices. The bar that connects them is the “weak part” – digital display ads sold by advertising managers the old-fashioned way. The marketing man in me gets excited about the possibilities of the two end weights – but the tradionalist in me gets rather worried about where the bit in the middle is going.
5. Annual reports will never be the same again
And on the subject of results presentations, there’s been a flurry of financial information seen recently, more of which later, but the annual report that really demonstrates the creative industry we work in is that of Sanoma. Sanoma View is a demonstration of a company taking its transformation to become a digital first organisation seriously. It’s a fabulous piece of work.
6. The clues to our future are in the numbers
A more traditional annual report was released by Axel Springer a day or two before Sanoma View. And what a story it tells. Revenue for 2014 is up 8.4 per cent to just over €3.04bn, EBITDA is up an even more impressive 11.6 per cent to €507m. What surprised me was that 53 per cent of the revenue and 72 per cent of the EBITDA are from digital activities. Calling Axel Springer a ‘traditional’ media company is just factually wrong. Illustrating the rapidity of the transformation, chairman of the executive board, Mathias Dopfner, wrote that for two-thirds of the attendees at the 2014 company Christmas Party, it was their first ever.
A week or so before that, Time Inc. released their 2014 results – the first annual set of figures since demerging from Time Warner. It’s fair to say that Time’s traditional revenues are under pressure, but digital advertising revenues, after excluding acquisitions and disposals, were up 17 per cent for the year, and 34 per cent in the final quarter showing an acceleration. Time’s transitional journey is a little behind Axel Springer’s for sure, but is well under way.
7. “It’s always about timing. If it’s too soon, no one understands. If it’s too late, everyone’s forgotten.”
So said Anna Wintour, editor-in-chief of Vogue talking about the fashion business, but it’s a pretty apt way of describing the fragile nature of innovation. I’ve had the pleasure of reading FIPP’s soon to launched Innovation in Magazine Media World Report. Quite simply, it’s our best ever. Make sure you get your copy.
How was your month in magazine media? Let me know.
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Chris Llewellyn’s 2015 magazine media predictions