Why ad blockers will help content evolve

Man-791049_1280Ad blocking is one of the more controversial features of Apple’s new iOS release. Apple prefers to call it “content blocking”, but it’s mostly intended to block all those pesky website ads that nag us every day.

Publishers are, of course, totally freaked out at the prospect of their content being consumed without monetizing the accompanying ads. And although ad blockers have been around for quite awhile, they’ve become a front-page story because Apple now makes it so easy to eliminate ads in their Safari browser.

To assess the impact of ad blockers in web browsers I think it’s worth studying the evolution of a similar medium: Television. TV started with totally free, over-the-air broadcasts. Advertisers subsidized those shows and everyone was happy.

Then cable arrived and an interesting thing happened: Most of us were willing to actually pay for all those free channels. Why? Two reasons: Better reception and more channels, although not the hundreds of channels available today. I remember our family’s first cable connection back in the early 1970’s. We went from three fuzzy stations to approximately 12 crisp, clear ones. That wasn’t a huge increase but it was important enough for my parents to sign up for a monthly payment.

Today we have cable, satellite, etc., with ad-subsidized channels, pay channels and that wonderful technology known as the DVR; each of these have their own business models. But with website content the business models still appear to be stuck in the early cable TV era.

On the web we have access to both free, ad-subsidized content as well as content behind paywalls. As ad blockers become more mainstream it forces publishers to make a strategic choice with their free content. Some will continue what they’ve always done: offering free content and now accepting the fact that more reading is taking place without the benefit of ad impression income. Others will push more of their content behind a paywall, reducing consumption but enjoying a false sense of contentment knowing that they aren’t being gamed by the ad-blocking crowd.

Others will embrace something in between. Their content will still be free and ad-subsidized, but in order to access it readers will have to agree to view the accompanying ads. Call it the “ad blocker blocker”. Technology will be developed to display the content only if the ads are also displayed. In fact, you could argue certain mobile apps and video pre-roll ads without skip/fast-forward buttons are examples of how this is happening today; perhaps we’ll see more publishers push their free content off the web and into mobile apps where ad blocking isn’t quite as easy. Yes, solutions will be developed to override this model as well, taking the cat-and-mouse game to a whole new level. But for the free ride to continue, mechanisms like this will have to emerge to ensure content creators and publishers have the revenue stream to keep producing.

It’s an evolution and only the strong and efficient will survive. But it’s also an important step leading to what I believe will be a future with deeper content engagement. After all, if readers find your ads so irritating, doesn’t that say something about your website experience? The ad-blocking movement should be a wakeup call for publishers everywhere, forcing them to do something radical: make the advertising experience more engaging and less annoying for readers.


Rethinking your mobile strategy

Iphone-410324_1280Scan today’s news and you’ll undoubtedly see plenty of stories about how the majority of content is being consumed on mobile devices. In fact, you’ll probably use your own mobile device when you do that scan.

Like many of you, I read all my books on a tablet and most of my short-form content on my iPad Mini or my Android phone. Even though I spend several hours in front of a computer every day, the majority of that time is spent using productivity tools like PowerPoint, Excel and Outlook. I’ll read the occasional web page on my Mac but my phone and tablet are my go-to devices for business and casual reading.

The pundits say that publishers and content distributors need to think about smaller screens and shorter pieces of content. They’ll go on to tell you that responsive design is a must and it’s critical to granulize content so it can be read in smaller slices of time.

The oft-used scenario is someone standing in line at the grocery store. They’re bored and looking for something to do. Their phone is always with them, so how can you take advantage of that opportunity and cater to their need?

I think we’re missing a huge opportunity by simply saying existing content needs to be restructured and apps need to optimize every square inch of screen. Publishers should be thinking more about companion content for mobile, not just reformatting what they’ve already produced.

Here’s an example: I finally got around to reading David McCullough’s wonderful book about Harry Truman. Each night I read a few more pages before I go to bed. There’s no way I’d ever consider opening that ebook on my phone and trying to read it in line at the grocery store. In order to really engage I need at least 20-30 minutes of book reading time, not two or three minutes in a checkout line.

So although I’ll never read Truman at the store, I’d be thrilled to spend that time in an app that provides tidbits about Truman. Let’s take that a step further and suggest the app should offer more than random facts or stories about him; rather, it should use information about what I’ve read so far and it tailor today’s suggestions accordingly.

This app will know that I’m currently reading about the 1948 presidential election, so it gives me links and summaries of all the activities from that fall. The app also knows what today’s date is, so it’s able to provide noteworthy info from “this date in history” (e.g., September 14) as it relates to Truman’s life.

In short, the companion mobile app leads me to deeper engagement with the book I’m reading each night. Having access to something like this would only make me more excited to read the next installment of the book.

Don’t overlook the marketing opportunity this represents. Give the app away for free and promote other related titles inside it. That means tossing in samples of other related books. You might want to include other types of advertising in it as well. I don’t care how you monetize it; just make sure it truly serves as a valuable companion to the book I’m reading.

The UI for this could follow the same metaphor the Google mobile app uses. Simply tap the cards you want to want to open and swipe to discard the ones you’re not interested in. The app learns what you like and adjusts future recommendation cards accordingly (e.g., maybe you prefer more YouTube videos and less long-form articles).

Although a mobile strategy certainly needs to consider the screen size and a consumer’s on-the-go reading habits, sometimes the content’s original format shouldn’t be altered. Instead, think about the deeper engagement opportunities a companion mobile product could offer.


How Amazon Underground will affect content pricing and business models

Screen Shot 2015-08-31 at 9.29.05 AMAs interesting as the all-you-can read models from Next Issue, Oyster Books and Scribd are, I believe Amazon just introduced a new model that’s likely to be much more disruptive in the long run. I’m talking about Amazon Underground, where paid apps go to be free.

If you haven’t heard about Underground it’s a collection of paid Android apps that are now available free if you download them directly from Amazon. The initial collection is mostly games but it will undoubtedly grow over time. It’s also important to note that the catalog includes paid apps as well as those with in-app purchases (e.g., additional levels for a game); those in-app options also become free in the Underground world.

App developers get paid for engagement in the Underground model. So if their app gets downloaded but never used they earn nothing. On the other hand, if their app is wildly successful and used extensively, Underground represents a whole new developer revenue stream.

Any app developer will tell you there’s an enormous difference between the number of downloads of a 99-cent app and that same app as a freebie. Amazon gets that and may have cracked the code in leveraging free while also driving revenue.

It all has to do with advertising revenue. You may not see much (any?) advertising in some of these apps today. For example, I haven’t seen a single ad in a casino game and Office app tool I downloaded. That will undoubtedly change in the future. After all, in order to keep investors happy, Amazon’s losses today always need to point to profits and other benefits in the future.

What are those benefits?

First of all, it’s an interesting way to co-opt the Google Play store. Remember, you can only get these Underground apps direct from Amazon, not Google. I’ve got to believe Amazon’s own app store isn’t exactly thriving, so this is a great way to give it a gentle boost.

Second, all those Underground apps you download ultimately pull you deeper and deeper into the Amazon walled garden. This too might not be apparent today but it will become crystal clear when those ads start popping up. And don’t forget that you’re opting into a model where all your app usage is closely tracked. After all, that’s how Amazon determines how much to pay developers. If you’re a privacy freak, Underground is not for you.

Why should publishers care about Amazon Underground? It sounds like an interesting model for game developers but not all that applicable for books, newspapers and magazines, right?

Wrong.

I’ve been talking about advertising in books for quite awhile now and I think Underground represents a viable, incremental business model for this vision. It’s obviously not the best option for some content but I’m convinced enough publishers and authors will embrace it, so much so, in fact, that naysayers will even have to consider it.

Let’s be clear about this though: I’m not suggesting an ad-based model will generate the same amount of per-unit revenue as the paid edition. That’s simply not going to happen. If a publisher is earning $5 per copy sold of an ebook today they might only earn ten or twenty cents (at best) from each download of the Underground version.

So why would any publisher ever agree to this?

It’s all about extending reach. Sure, nobody wants to trade a $5 sale for one netting ten cents. But what about all those readers who aren’t going to buy the book, newspaper or magazine to begin with? You’re netting zero from them today and possibly ten cents from each of them in the future. All that, with no cost of goods, btw.

Here’s another interesting use-case: Underground becomes a better sampling solution. Once the service is loaded with a bunch of ebooks, readers will be able to download the entire catalog without paying a penny. Amazon won’t be on the hook for any payment till pages are read. Consumers who like what they see but get frustrated with all the ads will always have the option to go back and actually pay for the original, ad-free edition. The rest of us will simply deal with the ads and enjoy the free ride.

That sounds like a win-win model for quite a few books, newspapers and magazines.


It’s time to radically improve the content sampling experience

Bulb-305162_640The goal of the content sample is to acquire new customers, right? So why are publishers settling for sample content models that are outdated and largely ineffective?

Look at ebooks, for instance. Publishers mostly rely on retailers for discovery and distribution, just like how they sell the full ebook. To make matters worse, most of these samples are under lock and key inside each retailer’s walled garden. What if you want to send your friend the great sample you just read? Even though publishers should fully embrace and encourage readers to pass samples around it’s next to impossible in today’s model.

Newspapers and magazines aren’t much different. Yes, they tend to offer some number of free articles on their websites. They even offer email campaigns where the links to these articles automatically appear in your inbox every day or month. One of the benefits of the old newspaper and magazine format is the original container though. Even though containers are disappearing over time there’s still a benefit to having the material presented in a curated manner as envisioned by the editor. So why not make samples available in that format as well as the website version? Put it in an app and make it portable, so prospective customers simply download and go. And don’t forget to include the ads; after all, samples can also represent another revenue stream. 

Speaking of containers, why aren’t more publishers doing cross-container sampling? My local newspaper knows my reading habits. I use their mobile app to stay up-to-date with local news while I’m on the road. So why aren’t they using that information to offer me samples of books on those topics I tend to read most often? Book publishers would love this opportunity and I’m sure an affiliate deal could be cut with the newspapers so everyone enjoys a portion of the resulting revenue stream when I purchase an ebook through this sampling model. It’s also a way for the newspaper publisher to add some value and show me they’re really paying attention to my interests.

Next, how about making these cross-container samples bigger and therefore more valuable than the ones I can get elsewhere?  Again, it’s a way of adding value to existing subscriptions or prior purchases.

Lastly, once and for all, publishers, please start encouraging a frictionless sharing model with your samples. Make it super easy for me to email the sample to a friend. All my friends don’t use the same ebook platform I use. So if I’m enthusiastic about a new sample I just read, make it easy for me to share all the popular formats with my friends.  And please, please, please…remove DRM from samples. You want these assets to become a viral sensation, so it’s time to remove all the obstacles that prevent this from happening. 


3 content pricing models from the future

Euro-447214_1280The year is 2020 and I’m about to make a digital content purchase. It’s amazing how much the industry has evolved in the past five years. For example, pricing is no longer a one-size-fits-all, take-it-or-leave-it component. I now have multiple pricing models to choose from: 

Social bulk discounts – That digital newspaper subscription I’m considering offers a 50% discount if I can get at least 30 of my social network friends to subscribe as well. Yes, the Groupon model is still alive but with a twist. In order to take advantage of the deal I first need to rally commitments from my friends. If successful, all the participants are also committing to broadcast their purchase via Facebook, Twitter or whatever other social network they opted in with.

Advertising-subsidies – It finally happened and publishing purists are still complaining about it. Meanwhile, the rest of us are thrilled to choose from two different options and price-points when we buy ebooks. Those who prefer the traditional ad-free approach pay full price while others pay less and are presented with ads as they read the book. Even deeper discounts are offered to consumers who agree to share their name and email address with sponsors and advertisers. I’ve completely embraced the ad-subsidized approach and find the same as reading a magazine or newspaper.

Clubs – Ever wonder what happened to the old record and book clubs of yesteryear? They’re back in the digital world. I get to choose from 3 deeply discounted ebooks to open my account and then I commit to paying full price for at least 10 additional ebooks over the next 12 months. If I fall short of that commitment my credit card gets hit with a penalty charge at the end of the term, so better to just buy all the books I want rather than pay a fine with nothing to show for it.

I hope you agree that tomorrow’s pricing models are terrific for consumers. The data and buying commitments ought to be good for publishers and retailers too, right?

You probably quickly surmised that Amazon isn’t a fan of any of these, mostly because they want to own all the data and sell it to publishers. That’s OK though because all the other retailers recognized the benefits and now offer all three models. Publishers are also using them in their direct-to-consumer efforts on their websites. As a result, the retailer playing field has been leveled a bit, benefiting both consumers and publishers.

Rest assured, the future is bright (but the Cubs still haven’t managed to win a World Series).