Recently, New York magazine announced it was going from 48 print issues per year to 26 annual issues. This led to an interesting set of exchanges as the meaning of this change was debated, including the implications for users and businesses, and where this is taking media businesses in general. The bottom line will resonate with many STM publishers — namely, how poorly the value associated with print publication is migrating to online publication, especially when it comes to advertising and subscription prices.
David Carr of the New York Times was among the first to discuss the change, and he was a little wistful:
. . . the move to bi-weekly publishing represents the end of an era and underscores the dreary economics of print and its diminishing role in a future that’s already here. . . . something palpable and intrinsically thrilling will be lost with the change in rhythm to a magazine that has been hitting the streets on a weekly basis for more than four decades.
But Carr is a realist, and notes the growth New York magazine has been experiencing online, allowing it to hire 15 new staff members and expand its offerings with its new fashion initiative called The Cut. But inside these growth statistics are the factors leading to the change in frequency — namely, online advertising is becoming a dominant form of revenue at New York because it is growing, yes, but mainly because print advertising is plummeting at a much faster rate.
Sarah Green writes on the Harvard Business Review blog network in a more confrontational tone, shaming Carr for “crying over spilled ink” and being a reactionary. In reading Carr’s article, I sensed some of the tone Green complains about, but found it to be more than offset by acknowledgements of the benefits and inevitability of the change New York is undergoing. Yet, while the two come at the topic from different angles, they both agree on one major fact — online is significantly undervalued.
As Green writes, focusing on advertising:
There is a problem, of course, in the media landscape, but it’s not with reader habits — where so much of the sturm und drang of industry commentary often focuses. It’s with advertiser habits. In the past, publishers charged dollars for print — today they have so far only charged dimes for digital. This does not make sense to me: It’s the same brand. It’s the same content. It’s more convenient delivery and more customizable, too. And now advertisers can also track how effective their creative is! With all of these improvements, a digital ad should actually be worth more to an advertiser than a print ad. After all, ad men in Don Draper’s day never knew how many people skipped over their zingy slogans and catchy fonts; today, technology makes it obvious. But rather than blaming their bad ads, they blame the technology and ask for a discount.
The way print is valued relative to time spent versus the way online is valued relative to time spent has been a long-term trend in Mary Meeker’s annual reports of Internet trends. In this year’s version, online ad spending was at least starting to approach parity with time spent (while mobile spending vs. time spent lags significantly). More interestingly, print ad spending compared to time spent is still multiples above — 6% of time is spent with print, but 23% of ad spending goes after that exposure. If online advertising were to have a similar 4x spend level, 100% of ad dollars would go there — and, not surprisingly, online advertising would be a viable candidate to support major publications.
But we’re unlikely to see a day where online advertising is valued at a multiple of time spent, and it may be because we think we can measure it better.
In discussing the current online advertising market with experts in the field, the ability to track ad response rates (click-throughs and impressions) has shifted the mindset among advertisers from seeking awareness and exposure to seeking response rates — a mindset more akin to direct mail marketing than to advertising. Our ability to measure advertising in new ways has led to a generally cautious response by advertisers. That is, there is only faith in the responses that can be measured and far less faith in the awareness generated by advertising, which is harder to measure.
In a related story, Newsweek is apparently returning to print early in 2014, but with a business model based more on subscriptions than advertising, suggesting that the predictions of paywalls playing a bigger role may be accurate. Its new owners are betting that print still has the ability to be priced as “a premium product, a boutique product.”
Online is not viewed as a premium product when it comes to subscription dollars. In our realm, the value of online publications is increasingly tied to metrics around downloads via COUNTER and other tools. Yet these metrics are just as susceptible to underestimating the effectiveness and value of an online journal as clicks are prone to underestimate the value of online advertising. Anyone who has visited a lab, a residency program, or an academic department knows that one counted download can easily become 20-30 copies, thanks to printers and copiers. These “usage events” are not counted, but amplify the value of the resource. Wise librarians expand their dataset by asking academics what they value and use, a tacit acknowledgement that our metrics don’t measure everything.
It seems that when we couldn’t count interactions with content, we were more likely to think broadly about the life and lifespan of content sources — the sharing, the exposure, the power of being associated with strong brands, and so forth. Now that we have numbers, our thinking has contracted to be predominantly about the numbers. The intangibles are at a disadvantage and have been marginalized, when perhaps they are just as important as ever.
Measurement is supposed to make things better, but because numbers give people something absolute and concrete, there is no room left for the value that measurements miss. When the value of content comes down to the numbers, measurements can seem precise, but they’re likely not accurate.
New York magazine may be thriving online based on all the metrics of the Web. But, compared with the more generous and possibly more accurately valued print world, the online future of New York and others will be driven by numbers, and only by numbers.
And that may be the ultimate harbinger of a future of “dreary economics” for publishers.