Several of you responded to last week's blog (below) on the effect iPads may have on local media's, well, low self-image, if you will. The importance is not just psychological, it's financial. And it's just starting.
The iPad yields a $45 CPM - reflecting a combination of the demand, scarcity, novelty and high-end demographics involved.
We are gaga over the iPad because these CPM's are not only much higher than mobile CPM's (hovering in the $15 range) but also reconstruct a viable business model out of the ashes. Banner ads on local media computer-based sites still hover in the $6 range for a large site (if you combine remnant inventory with premium positions.)
Even in their hehday, alternative weeklies, where I spent much of my career, only commanded $36 CPM's and that was back in the 1980's. Smaller circulation meant these maverick weeklies could still trump dailies by offering the low whole dollar pricing that small businesses cared about most. Community weeklies also played this game, using low whole dollar prices to mask huge CPM's.
But that was a long ago time ago; a solid $22 cpm (yield/circulation/thousands) is viable for a print weekly in 2011. Double that CPM for ads on the iPad, subtract the cost of newsprint and Eureka! The iPad brings a new, more viable business model to the table. Plus, it can reach a new and younger audience, rather than just a transitional one.
But slapping the same tired old banners-linked-to-websites on the iPad will snuff the sizzle, devalue the new brand, and, ultimately, kill the CPM.
That's why local media need to review their production teams and consider blowing-up how ad design is created and deployed. Younger, more affluent readers have higher expectations and want better ads on their Pads.
Reorganizing production has already been done at Palm Beach Post; a key interactive executive I spoke with this week said company growth is now fueled by existing customers buying more digital campaigns around the new and better creative ideas from the Innovative Solutions Team, headed by a former front page designer.
Talent may be hidden in plain site in your company.
As an industry, we need to grow out of the production shop mentality,extricrate the top talent from the production staff, re-organize creative teams to have structured brain-storming sessions, set quality guidelines and create systems to monitor ads before they are deployed.
This may sound like overkill, and it very well may be. But there is a limit to how many new products your team can sell before you have to create some kind of internal creative agency that comes up with the great campaign ideas, and understands how to format them for a variety of distribution outlets. Your sales teams are dead in the water without this.
Local media has a key opportunity to create a new path through the company for the best designers who will now be able to supervise and monitor ad design quality, and/or work on the coolest thing around, and we know what that is.
On another note, LMI takes a look this week at online gift certificate stores. What is always surprising is how much revenue is available when local media sells directly to consumers, rather than selling advertising that sells to consumers. These stores are a no-brainer add-on for most local media companies with legacy inventory, especially if there is a large base of advertisers who run only a few times a year or who are stalled due to unpaid balances. Helping an advertiser through the recession - while recouping the revenue by selling gift certificates - is a home run all the way around. Two case studies on certificate stores are examined here.
Much thanks to John Saltas, publisher of the Salt Lake City Weekly and Rob Crocker, Publisher of the Portland Mercury for sharing their experiences. It's great to see publishers who are not only not marginalized, but also donning the mad hat of the digital intrepreneur. Well done.
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