Publishers expect subscription lift from iPad

Many marketers greeted the April 3 release of Apple’s iPad with excitement, looking to the device for new e-commerce and interactive advertising capabilities. Players in the beleaguered publishing industry, meanwhile, are looking to the product to stanch the exodus of print subscribers – and the ad dollars that followed them.

IPad subscriptions deliver a more engaged customer to publishers and their advertisers, says Peter Hunsinger, VP and publisher of GQ. The device is also helping publications expand their audiences to new consumers.

“When we do focus groups, the technology-focused people love the magazine on the iPad,” he says. “They normally don’t look at this product. It’s a whole new business.”

Consumers find more value in an iPad subscription than a print subscription, in part because the device enhances their reading experience, explains Hunsinger. Due to the improved user experience, as well as distinct payment models for a digital subscription, magazines are already seeing an immediate impact on their bottom lines, he says.

“Usually, in our business, you serve three copies before you get paid. With [the iPad], you get the money up front, and there’s no bad pay because it’s all credit card or phone bill,” says Hunsinger. “Also, you eliminate promotion costs — people are subscribing because they want the magazine, not the football helmet phone.”

That’s positive news for both publishers and advertisers, because the high level of audience interest, plus subscriptions specific to the iPad and iPhone, should translate into better consumer engagement with marketers’ ads. Hunsinger believes this equation will draw marketers to forward-thinking print publications that offer robust and popular iPad editions reaching a desirable audience.

“In a magazine, people love the advertising. It’s why they come there. In some other places it can be a nuisance,” Hunsinger says. “When advertisers see their content with the ability to go to video, to scroll or to go to different pages on a Web site, that’s exciting.”

Auditing groups are also preparing for an increase in digital subscriptions. BPA Worldwide announced last month that digital copies were 17.4% of total circulation for its members’ December 2009 statements, a 2% increase from six months earlier. Its competitor, the Audit Bureau of Circulations, updated its definition of “digital edition” last month when Wired asked for a review of its iPad version. It ruled that “replica digital editions” must preserve the formatting and layout of a print magazine to be counted by ABC.

“Specifically with the iPad, rather than the iPhone, editorial and advertising can both be positioned and distributed in easy, readable experiences,” says Teresa Perry, SVP of publisher member audit and report processing services for ABC.

The higher rate of consumer acceptance also means that marketers will see increased ROI from interactive ads.
“In the early days of digital magazines, distribution levels were so low that even though there were great, interactive capabilities with ads, there was no ROI,” says Glenn Hansen, CEO of BPA Worldwide. “But we’ve seen the cost of video come way down, and now you don’t have to go through a whole new creative process for the digital magazine.”

Publishers who have already innovated with device-focused digital editions expect the iPad to increase pickup of these products. GQ’s iPhone app qualifies as a replica digital edition under the ABC guidelines, and Hunsinger says his magazine expects more success with the bigger-screened cousin.

“Our initial metrics, in terms of what we’ve sold in our iPhone app and projected sales for the iPad, tell us that this is going to be very important,” Hunsinger says.

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