Magazine Media Trends And What They Mean For Your Business. The ACT 9 Experience. Linda Ruth Reporting… Part 11

People tend to look to the past to predict the future, said James Hewes, president and CEO of FIPP, on the third morning of Mr. Magazine’s ACT 9. But the rate of change is happening faster than anyone could have foreseen. To be successful in the modern world, publishers need to change their business, to have four robust revenue streams. The number one stream should be paid content. As an industry we’re beginning to make back some of the ground we lost when we started giving away content for free. However there are ten additional revenue streams that Hewe identified, including philanthropy, IT, memberships, and events. The ad dependent model is not gone; however, it now needs to be one stream among several.

A second trend is consolidation, which, along with its attendant churn, will continue. At the same time, we’re seeing the emergence of new, independent publishers. New ideas and new thinking are coming into the market.

The most important revenue streams, paid content, has required some re-education of consumers, who are becoming more savvy as to the need to pay. In the news space, if you are not charging for content online, you’re not in the game anymore. The Economist is now charging the same for a digital subscription as for print, on the grounds that they are paying for the content, not the format. Then, once you have a focused audience, you need to transact with them through e-commerce and events. A lot of work needs to be done, however, to make the process seamless. It’s so easy to buy through one-click on Amazon, so difficult on most publisher sites.

Advertising has never been less important to the industry, which is in some ways a good thing. Publishers need to break down the silos in their business and create authentic, opinionated and purposeful native copy. Editors are the best guardians of content; they need to be part of this process. Ad blocking is everywhere prevalent; publishers can communicate the need to their readers to turn off the ad blocking technology.

Only about half the traffic on the internet is real people. The rest are bots. And half those bots are impersonators, scraping money out of the system to the tune of many millions of dollars of loss to publishers. About three quarters of online ad revenue goes to three players: Google, Facebook and Amazon. Everyone else splits up the rest.

Print is regaining its prestige. Every year FIPP finds innovations in the print space. Print offers strong journalism unavailable online. Private Eye, the UK satire magazine, is growing because it never embraced digital. Publications are creating new packaging for enhanced reader value. Brands are exploring higher quality premium products.

You cannot rely on Facebook for traffic. A lot of companies did; but Facebook can change their algorithm at any time. Eitghteen months ago they did so, and publisher traffic fell by half. The ad-funded digital editorial model might not be sustainable for this reason. The change made Google the single biggest source of referral traffic. All the others put together are insignificant. Apple’s business model is to destroy anyone else’s business model. In any case, reliance on a single revenue stream is risky.

Platform-focused content: ask yourself, do they enhance your brand? Does a financial services brand need a snapchat account? Each platform really needs original content.

Ai is being used to power content recommendations; to edit homepages or section pages on a site; routine journalism; changing marketing approach for dynamic paywalls, and, crucially, translation. Look at the potential of AI and what it can do for you; it could enhance content output by aiding research and commoditizing dull and repetitive tasks. AI is going to have the biggest effect on media among all industries.

Diversity is the biggest issue in the question of talent and culture, creating an attractive workplace environment. Companies need to cultivate it. Change can’t be driven from the top down; it needs to percolate up from the base.

The trend report was taken up by Jerry Lynch, president of the MBR, who takes us beyond the transaction to the audience. Who is reading this product?

45% of all US growth is coming from non-store retail. Retailers need to change with their customers, who are getting more urban, older, more diverse, and more polarized in terms of income. Retail growth reflects evolving shopper priorities with online growing the most; however, supermarkets are still big and growing. If you look at the online sales environment, for the most part magazines aren’t there.

The omni channel evolution is closely anchored into the evolving fulfillment system: ship to home, in-store pickup, curbside pickup, grocery delivery, on-demand delivery, surprise subscription, and auto-replenishment subscription. The store offers scale, but the omnichannel shopping represents growth. As omni channel takes market share, it’s going to effect the retail mix also.

No category in the store has a stronger presence in mobile than publications. We need to use that mobile connection to sell products.

The trends reveal opportunities. We can see the changes, and need to adapt our business models to take advantage of them.

To watch both of the aforementioned presentations please click the videos below: