Imagine a magazine with 100% influence on purchase decisions. If the magazine recommends buying a certain product, every single reader will buy it. In this case, the magazine could charge a huge amount for advertisements.

Of course, that’s not realistic, but illustrates an often overlooked point: influence improves conversion rates. And higher conversion rates mean you can charge more for your ads. Influence also improves the impact of brand-building ads, again meaning higher rates.

The influence a magazine has over its readers is very difficult to measure, which is probably why it’s overlooked. Determining how to increase influence is an urgent matter for editors and publishers who need to turn around declining ad revenues.

To give one example of how to build influence, UK-based graphic design magazine Grafik has introduced an awards ceremony. The intention is to position itself as a credible leader of good taste in design, and to become the place for reputable design brands to be seen.

Maybe 2010 will be the year when publishers really seek to increase their influence over readers: establishing and reinforcing expert credibility will be key.

I enjoyed this article in the Guardian proposing a service called Bookify. No doubt this is the sort of thing that Amazon (and possibly Google etc) are trying to create.

This video claims that there are now over 1 trillion webpages in existance. That’s 1,000,000,000,000 pages, and growing every day.

I think we’re reaching the point of information overload. I follow a few websites, maybe 5 or 10 in detail. I follow about 150 people on Twitter, but that’s all I can cope with. (For why that is, read up on the Dunbar Number) I add RSS feeds to my Net News Wire, but I never get round to reading them. There’s just too much information. Or, to be more exact, there is too much data.

Let’s consider a few of the issues that this raises, and then figure out what the bottom line is.

Signal vs noise – what’s actually important?
Of all the pages you read in a day, and all the links you follow, how much is actually useful to you? 25% if you’re lucky, I’d say. This means that if you could figure out what’s actually worth reading, you could save 75% of your time, or follow four times as many sources, just more selectively.

Short attention span
Because there’s so much stuff to plough through, to make sure you don’t think you’re missing out, you can’t really give anything your full consideration. You skim, and don’t have time to think about the implications of what you’re reading.

Fads – flavour of the month is now flavour of the hour
Think of the viral videos, quirky links etc that are so beloved of marketers. You look at them, and then you see a new link to the next great thing on Twitter, and you’re off again. Fads are so short-lived now – micro-fads you might say – that to monetise anything like this you’re going to have to do it quickly!

Poor quality traffic
When you visit a viral link on a page, do you hang around on that site? Mostly not. Do you even register what that site even is? Mostly not. Could you tell someone else two minutes later which site you went to? I doubt it. So the viral link that gets all the attention for an hour or a day has a very hard job of doing anything other than racking up a bandwidth bill.

How much information can people consume?
It would be interesting to know how much information a human being can actually store and process in a meaningful sense. From an evolutionary perspective, are we able to cope with the world that we are creating?

Who really cares?
You read all this stuff on the web, follow all these links, desperate not to miss out, but do you really care? I mean, really care? If you missed a couple of days, or a week, would your world stop? If everyone’s obsessed with the notion that Rupert Murdoch’s paywall will fail, is that an argument that people don’t actually care all that much about what they read?

BOTTOM LINES: Attention and engagement
Marketers such as Seth Godin, who I greatly admire, have been claiming for years that attention is now a very scarce commodity. It’s true, but people don’t believe it. My examples above show that we don’t really have an attention span any more. We have so much to pay attention to that we pay attention to nothing.

As media owners, writers and publishers, this is bad news. If people don’t pay attention, they won’t become engaged in your content. And it’s engagement that keeps people coming back for more. Engagement keeps people on your site, not a competitor’s. Engagement makes people trust you, follow your recommendations (which may be via your ecommerce site or affiliate link), and notice your ads.

In online media it’s not the person with the most content that wins, it’s the person who can most effectively hold the attention of readers and engage them in the brand.

I intend to write more on the strategies that publishers can use to gain attention and increase engagement. Can we measure these things, and can we move them in the right direction for our brand?

This article on the Huffington Post does a good job of summarising the case against charging for online subscriptions.

What makes this an interesting debate is seemingly something that none of the main combatants can see: the “free vs subscriptions” debate is not either/or, winner takes all. It’s horses for courses (or some less cliched variant thereof). For some sites, such as many of the high-end financial sites, a paywall works just fine. For other sites, where similar content is available elsewhere, a paywall won’t work.

You might even say it’s a matter of commercial judgement.

For people to accuse the other side of “not getting it”, or being thieves, is to miss the point. But why let facts get in the way of a good argument?

Outside Regents Park tube

If your publication is free, it’s vital that it reaches the widest possible appropriate audience. You don’t make as much money on each copy, because there’s no cover price revenue, so you have to distribute more copies. Low margin, high volume.

That’s why it’s such a shame that the London Evening Standard seems to have got it wrong so far. Where we work, on Oxford Street, it’s pretty much impossible to get a copy of the paper. You might be able to get one at Oxford Circus tube station if you’re lucky enough to arrive in what seems like the 20 minute window where the paper is there. If you’re up at the Tottenham Court Road end, forget it.

Can you get it in shops? Not really. Are there street vendors like there used to be? Not really.

The London Evening Standard has achieved an amazing feat: at a single stroke destroying both their subscription revenue base and  their distribution channel by going free. Peter Preston mentions in the Guardian that the Standard manages to distribute 600,000 copies a day! How? Where? To whom?

Still, I’m sure they know what they’re doing.

Here’s an interesting article on PR Week, where the editor discusses the balance between the print magazine and the website.

Essentially, they’re shortening the news section in the print magazine, turning it into more of a round-up, and putting more news on the website. The print magazine has had the opinion/editorial section increased.

I think this is a move in the right direction: choosing the destination of print vs online for where the content works best.

You might remember some time ago I wrote about an offer from Autosport magazine that I received by email, where I got a free trial issue of the magazine, and then six issues for £1 total, before reverting to a standard-priced subscription.

Well, I’ve now had two issues of the magazine and they are very good indeed. I will be keeping my subscription going.

Conclusion: if your magazine is exceptional, then a targeted free-issue offer is likely to work well.

You probably think of the text and images that go into your magazine, or onto your website, as “content”. As a publisher, you might think you’re selling “content”. But content is a dirty word, and here’s why:

Imagine two articles on Formula 1 motor racing. One is written by Murray Walker, a commentating legend who did his first racing commentary in 1948, and has met, interviewed and personally known almost every great driver and champion in the sport. The other article is by an anonymous hack, cobbling together wire copy without personal insight and probably without personal interest in the sport. These are both “content”. But which would you rather read?

The problem with thinking in terms of “content” is that content is a commodity. Everybody has “content”. Publishers would do better to think of themselves as providing Branded Information. Maybe that’s the brand of the magazine, or the brand of the contributor.

Two main ways of providing branded information spring to mind. Either look at the message, or look at how it is delivered.

A distinctive message: The Economist doesn’t provide “content”, it provides analysis and comment which you know will be rooted in facts, statistics and quality writing. It’s distinctive. It’s not a commodity. It’s Branded Information.

A distinctive delivery: Jim Cramer, of CNBC’s financial show Mad Money, gained a big reputation for his presentation style: shouting, ranting and being larger than life. In his case the quality of the information he presented was arguably sometimes lacking (especially with the benefit of hindsight), but he didn’t just provide facts and comment, he entertained the audience. It’s distinctive. It’s not a commodity. It’s Branded Information.

It’s a waste of time to develop commodity content, because it fetches commodity prices. And on the web, the commodity price of content is almost zero. But as the Financial Times has shown, both online and in print, people will pay good money for Branded Information.

As publishers begin to use online tools such as their website, Facebook and Twitter to interact more with their users, effective strategies to engage readers are starting to emerge.

One interesting approach is to think of publishing as being a soap opera. Three key features of a soap are characters, ongoing storylines and cliff-hangers. Let’s look at some examples of how these concepts can be used for engaging a magazine’s readers effectively online.

Characters

Characters are a chance to personalise a reader’s relationship with the magazine. For example, Autosport’s Group F1 Editor, Jon Noble, reports his exploits as he travels to each race using the Twitter account NobleF1. This gives readers a more personal insight into the topic – an insider’s view. This personal connection can strengthen the bond between reader and magazine, helping retention rates.

Ongoing storylines

Ongoing storylines in soap operas have people coming back to find out what’s happened. There’s usually both a big picture narrative, and lots of mini-issues going on.

In a reader community on Facebook, here’s an example of one of these mini-issues being used to strengthen ties. The magazine’s office receives a book to review. A status message is posted saying “We’ve got Book X for review. It looks great. Full story to follow.”. Later, a second message is posted with a short summary or review of the book (if the magazine recommends it). This message also includes a chance for readers to win the book. The competition question could be something that stimulates a debate on the topic covered in the book. This could provide interesting fodder for further articles, both online and in the magazine.

The final part of the story is when the competition winner is announced. This is important, to emphasise the benefits of reader interaction to the other readers, and to let them see that the giveaways are really happening and that everything is above board!

Cliff-hangers

Cliff-hangers are really a natural extension of ongoing storylines. They’re a way to make people come back for more. One example might be “We’ve just received a product into the office that could revolutionise our industry. See the full story tomorrow.”

Another type of cliff-hanger is to cover a topic in one article, and then promise a follow-up on one area of detail in the near future. You’ll see that I did that in my recent post about London Lite closing. If the original article is of interest, the follow-up probably will be too.

One final amusing example is of a recent video showing an SUV driving half-way over two parked cars, reversing, then leaving the scene! The implied cliff-hanger here is whether the police will catch the driver. If you can make it easy for people to check back later with you to see how the story ended, you’ve strengthened your tie with the reader and generated some extra traffic to your site.

Associated Newspapers plans to close its free evening newspaper London Lite, putting 36 jobs at risk. The Guardian has the full story here.

There are interesting lessons from these papers that magazines can learn from. I want to look at the two most important facts of any business: revenues and costs.

1. Revenues: Diverse revenue streams are vital – use affinity deals

Traditionally publishers make money from the cover price and from the ads. Take away the cover price and you’re relying solely on the ads.

Advertising is a notoriously cyclical business. It has booms and it has busts. The sad part is that everyone knows this, but few seem to plan for it! This chart showing ad sales across various media in the US, including newspapers and magazines, paints a sorry picture.

DMGT’s morning freesheet Metro made profits of £8m a year during the good times. It won’t be making that now! The challenge for a publisher relying solely on ads is two-fold: first to launch in the good times, and then to save up enough cash to ride out the bad times. For most companies this is too difficult.

The solution is to diversify revenue streams. This requires some creativity, and I think it’s an area where the industry as a whole can improve. The starting point is to see your readers as a community that share similar interests. Then its time to explore affinity deals, where the publication runs a joint offer with a company rather than a straightforward ad. This lessens the risk for the company, getting them involved when the cost of an ad would be too high for them. The publisher might not make as much money off each deal, but any revenue is better than none in hard times!

Looking at London Lite and The London Paper, much more could have been done in this area. We’ll have more to say on affinity deals in the near future.

2.Costs: Distribution costs are a major problem for publishers

When free London evening newspapers were first mooted, then-mayor Ken Livingstone tried to sell the contract for evening distribution on the tube. Both The London Paper and London Lite decided not to bid for this, and instead to employ a huge army of distributors to stand on the streets and give out the paper. This probably meant that both papers were living on borrowed time from the day they were born!

When you count the cost of printing each copy, getting it to a distribution person, paying his or her wages, paying for uniforms and equipment, the unit cost of each copy proved far higher than the price of the advertising that the copy carried.

To put it another way, due in part to high distribution costs each copy was produced at a loss. No business can sustain that for long.

So what should have happened? There were probably deals to be done in several ways.

A joint distribution deal could have been struck with London Underground, where the two papers could have agreed with each other to pay less for the deal and have both titles distributed side by side. Not ideal, but better than going bankrupt! (There’s a chance this sort of partnering could have fallen foul of competition laws though, since some might have deemed it a cartel.)

Deals could have been done with shops to give away the paper, either with standard newsagents or with other shops where the paper is given away at the point of purchase. Probably one of the big supermarkets would have considered this, but again short-term greed could have strangled the idea at birth.

It’s interesting to see that as yet the London Evening Standard, which went free in October, hasn’t done a tube deal or a deal with shops. Now that it’s the last man standing, I’d expect to see some of this happen fairly soon.

Summary: Lessons for magazines and other publishers

The lessons for magazines and other publishers are really these:

1. See your readers as a community, not just a passive audience to force ads onto. Try and serve them with creative affinity deals where the reader really wins.

2. If distribution costs are too high, look to more creative ways of reaching your audience. Could you partner with other companies to distribute your magazine, in return for either standard sales terms, some free ads, or some editorial coverage. Distribution could either be in shops, or given away with internet orders when they are posted.

3. Consider going internet-only. Printing costs are eliminated, distribution costs are reduced to near-zero. Of course, you then have a whole new challenge of working in the online world! We’ll have a lot more to say on that in the future!