SIPAlert Daily – Choosing the right business model for your mobile and the process one member went through

“What are you trying to accomplish [through mobile]?” asked Larry Schwartz, president of Newstex, during last week’s second webinar—titled Monetization and Business Models—of SIIA’s new Mobile Essentials series.

Of course, you want to be seen, heard and found, and building a mobile app is a good way to do that. “Mobile Internet traffic is building very quickly and desktop access is falling off,” Schwartz said. Apps now account for 82% of all mobile access. He suggested that you look at the percentage of your traffic that is coming from mobile. It’s probably growing.

[This webinar with the full presentation is now posted on the SIIA website for SIIA/SIPA/ABM members to access.]

Schwartz then proceeded to lay out the various business models that should drive a publisher’s mobile strategy:

1. Mobile extension to desktop product. The purpose is not to replicate your desktop product, but to provide a mobile product to complement it. For example, CQ did this and it has enhanced the value of their content. The app is free to download from the app store, but users need a log-in and password from CQ.

2. Newsstand subscription. If you publish your content no more than once every 24 hours and bundle your content into issues, then the Apple newsstand app may for you. Your app will be available in both the app and newsstand store. “Our experience is you should publish at least four issues per year,” Schwartz said. Apple charges 30% fee, but they handle all the side issues. “If you’re interested in expanding to the international market, Apple’s a great way to do it. I think they’re in more than 225 countries now.”

3. Freemium model. It’s designed to drive awareness and interest in your content in a free app while generating upscale opportunities to the free version. The Guardian uses this model for their mobile app. You can access content on an ad-supported basis or pay 69p for their premium tier (the lowest price allowed in the U.K.). The key to success is that the free version must be able to stand on its own, Schwartz said.

4. Digital Print Bundle. This is a current favorite among publishers because it provides a means to extend the life of your print to figure out how to replace those dollars. It allows publishers to experiment. A magazine like Consumer Reports will give their print subscribers access to their digital tools—a kind of best of both worlds.

5. Sponsored or ad-supported app. These treat mobile as a specialty product. The CQ Roll Call app, for instance, is ad supported and can be downloaded free from the Apple store. Banners can be placed in the story. You must think through the design for this to work. Size and placement do matter here.

6. Native ads. These are effective but controversial—indeed, the FTC has started to look into them—because the advertiser seeks to gain attention by providing content in the context of the user experience. Native ads match the form and function of the content. If they are publisher produced, then it’s similar to an advertorial. The intent is to make paid ads feel less intrusive.

7. Transactional or In-App purchase. Allows you to download a free app and then make a purchase to keep using it or to upgrade the app by using Apple’s In-app system. Amazon has also just launched a system. LexisNexis offers a free trial and then you choose a subscription level. It’s also very international and you can sign in on multiple devices.

Schwartz offered one last tip: Smart App banners. When a user comes in on their IOS device using Safari, they would see a pop-up banner that shows the app on their iPad. If they have the app, it comes up. If they don’t, it tells you to download it.

 

Next up was Ed Keating, chief content officer for BLR and in charge of new products. BLR has a long history of experimentation, first with the HR Daily Advisor. “Luckily, we’ve migrated to a new [mobile] platform,” Keating said. “It just launched over the weekend—covers all of our verticals.”

What process did BLR use to get to that stage? There were three steps:

1. They researched their customers, checking their mobile traffic and what people said they want to use.

2. By working with an established provider—in this case, Newstex—they learned a lot.

3. They debated business models. How were they going to pay for this and how is this going to work within BLR’s business?

They did a lot of surveys and found differences in the breakdown of devices being used. The critical question they asked was, “What are you using mobile for?” They were reading news, taking training, keeping records. “What kind of workflow thing might we want to be thinking about?” Keating said they next asked. Interestingly, there was not a big difference between their paid and unpaid audience.

What were the challenges? “On the strategic side, are you mobile first or mobile second?” Keating asked. “We were probably mobile third. We have been digital for a long time and still have print products and need to support those. But our mobile traffic is up.

“How do we integrate mobile platforms into our overall strategy? The challenge for BLR products is that their use is episodic,” Keating continued. “They answer questions. If people are not getting a lot of questions, what do you do? Mobile allows us to be in their forefront all the time. We can be more pervasive in their day. Trying to own your customers share of day is a good goal and metric.”

From the operational side, here were BLR’s concerns:

1. How do you budget? It’s like the Internet. You just need it.

2. Content readiness. Self-explanatory.

3. Not built here. BLR had some mobile expertise in Tennessee. But because no one there owned it, it “did not get in [their] way.”

4. Ignorance. “We don’t know what we don’t know,” Keating said.

5. Timeline. That was tough. Who owned it? “It took us forever to get the thing launched,” Keating said. “Where in the organization should this thing live?” You need your top people to communicate.

6. Business model. How do you pay for this? “We got caught up on that one,” Keating said. “We played around with a couple ways to make this work for us.”

The sponsored and ad-supported model proved most appealing. “BLR has been building an ad business here—growing quite well,” Keating said. “It was great to have something else to put in the bags of our sales reps. Having mobile was a logical extension. And maybe it could grow towards [a] Freemium [model].”

The ad-supported model was also the easiest way for BLR to get new names to follow. “It’s incredibly trackable and metric oriented.” BLR was already offering some free content to potential subscribers. With the added capabilities of the platform, they could ask for an email address and give a lot more functionality. That would make them more alluring.

Keating also had a final tip. At first, he said BLR looked around at what others do. “The most, well-thought out strategy came from the head of mobile at Thomson Reuters,” he said. “’We are striving to design and develop best-in-class platforms to facilitate agility, quality and consistency across products that will help people work as efficiently while mobile as they are in the office—and seamlessly no matter what platform they use.’

“For many of us in the SIPA, ABM and SIIA world, that is something to strive for. Can we match where our customers want to go?”

 

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Ronn LevineRonn Levine began his career as a reporter for The Washington Post and has won numerous writing and publications awards since. Most recently, he spent 12 years at the Newspaper Association of America covering a variety of topics before joining SIPA in 2009 as managing editor. Follow Ronn on Twitter at @SIPAOnline

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