In Going Mobile, ABC’s report on its member’s mobile initiatives, 59 percent of publishers said their company has a strategy in place for capitalizing on mobile platforms. In the next 24 months, publishers expect an increase in both ad and subscription revenues as a result of their mobile strategy. Echoing the sentiment of publishers, magazines are maturing their product offerings in anticipation of future revenues. Compared to 2010, when only 57 percent of magazines distributed their content on mobile devices, in 2011, 83 percent made their content available on mobile devices (Going Mobile: How Publishers Are Maturing and Monetizing Their Offerings, Nov 2011). Of the remaining 17 percent, the most common reason cited for not entering the digital market was cost. In a survey of publishers in the United States and Canada, 79 percent said that maintenance and development costs were the main obstacle to creating and distributing mobile content.

According to our latest  report , in the current state of outsourcing production, 31 percent of magazines said they currently outsource, or have done so before, while 38 percent are considering outsourcing. Outsourcing the digital app production will enable the magazine publication to enter the market, where advertising messages can be delivered to the mobile audience in a myriad of ways: banners, sponsorship, videos, search, store locators, lead generation, click-to-call, text, games, and polls.

Buyers want detailed usage metrics of ads on mobile apps

 Affinity’s American Magazine Study, a report on the click-through rate of advertisement on tablets, shows that digital ads are likely to be more effective in selling products, a factor that influences advertisers. Tablet users accustomed to the interactive environment offered in their e-readers are more likely to click on an ad, and find out more information on a product, than their print counterparts. Detailed reporting and analysis on the readers reading and click-through patterns are possible in the digital platform, and is a valuable tool to lure advertisers to the magazine.
Considering the economies of digital selling, and faced with stiff competition from rivals publications, magazine publishers might be forced to price their digital content cheaper. In this scenario, retention of their ad sales is the key component of shoring up their bottom line. Development of a slick mobile app for the e-reader is the first step of capturing the reader’s attention. Translating the digital readership base into more advertising revenue, by providing eye-catching ads, is what will bring advertisers back to that publication again and again.

- Deepti Krishnan, Analyst, ValueNotes Sourcing Practice

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