Digital Services & Goods Purchasing Trends

Pew Internet, a division of Pew Research, asked 1300 smartphone owners across the country whether or not they had purchased any of 16 different types of digital content.

Here is the breakdown of what they paid for, with 75 percent saying they have bought multiple items:
33% internet access
33% software
21% apps for cellphones
19% digital games
18% newspapers, mags or journals
16% videos, moveis or TV shows
15% ringtones
12% digital photos
11% members-only premium content
10% ebooks
7%  podcasts
5% tools or materials to use in video or computer games
5% cheats or codes for games
5% have paid to access particular sites such as online dating
2% adult content
6% misc other content

Who Buys
There are not a lot of surprises here. Men and women behaved similarly in buying -- with the exception of men outdoing women in purchasing software. The most prolific purchasers are those 30-49, with a college degree -- and in the higher income brackets. The average monthly spend was $47 -- however most spend about $10 a month.

"Skip" Prichard on Publishing

Skip Prichard, CEO of Ingram's Content Group and a long-time executive in the publishing industry gave the keynote at eContent's Buying and Selling conference in Scottsdale, Arizona. Being an alum of Lexis-Nexis, Elsevier, Ingram Books and Proquest, his career has been an homage to digital convergence.

He recalled being asked by a reporter to speak to the future of publishing, Prichard offered these tidbits:

• Standard Operating Procedures -- need to be revised. Disrupt the status quo because you can become a slave to tradition, versus looking at the situation with fresh eyes. Chances are your competition does not have the same constraints as your SOP. 
• Unprecedented Opportunity in terms of building audiences (look no further than GroupOn). Of course that opportunity means constant stress and pressure... because
• Competition is everywhere. It is global -- and it is relentless. There are no resting on laurels.

While little of what Prichard said was new or a surprise to me, he refreshingly gave real-world examples of how publishers need to embrace change by deftly calling on his own experience. Too often, pundits and executives speak in platitudes and such generalities that the subject could as easily be about March Madness as it is about Digital Publishing. By drawing from his own experience it changes blah-blah to rah-rah -- and I believe, actually works to inspire people to take action.

That would be an interesting exercise. Poll conference attendees to find out how the information they learned will be applied. 

Aetna: Rx for Engagement

"A retained member is not necessarily a happy member," says Melissa Jones, marketing manager for Aetna's New England regions, in addressing a Custom Content Council audience on why customer engagement is more important than merely measuring customer retention. To better engage Aetna's Medicare audience -- all over the age of 65 with an average age of 75, Aetna entered the world of content marketing.

Jones' objective was to turn around a trend of Aetna Medcare members voluntarily terminating their memberships by creating editorial content that was relevant to this demographic.  "We decided to create a pilot program to test the impact of an integrated communication program on member retention," she says. The goal was modest, a 1% improvement in retention to show the pilot's success -- and save the company millions.

The group came up with Healthful magazine, which has three standard sections: Health, Enjoyment and Reference. The editorial content is positive and slanted toward maintaining the emotional, mental and physical well-being of this adult audience. Jones was surprised at how important physical fitness was to this audience. "You can't believe how popular the Wii is at senior centers," she said.

In looking back, one of the harder chores was getting buy-in from the C-suite level. The group persevered and ultimately, the company realized a 6 percent increase in retention. The success easily offsets the investment undertaken.

The group is looking to offset costs by experimenting with advertising. A cover wrap was sold to HEB Health & Wellness. The wrapper was targeted to 25,000 homes in Texas - and more than 31,000 coupons were redeemed, an outstanding success. "Soft-sell" ads dot the magazine -- a feature on hearing encourages people to call a number to find out more about hearing aids, an article on adopting pets, includes a sidebar on how PetsBest offers health insurance for pets.

I asked Melissa what the percentage of ad revenue was against the cost of creating content. She was quick to tell me that the effort was merely a pilot, and that there was no intention of turning the entire magazine into an ad-supported title -- rather, it had to remain a value add.

She better not let the C-Suite know of the success of the ads then.

What Marketers Want

Before he was the Pariah of Hollywood, Mel Gipson starred as a chauvinistic ad executive who, after a lightening strike, could suddenly "hear"the secret thoughts of women. Of course he used this for his own personal gain.

Advertisers too have been trying to tap into the secret thoughts of users, either by watching behaviors online or by analyzing user comments. In turn they are taking this intelligence to create content that engages their audiences. This evolution of marketing messages from paid advertising to information development has been a bane for some media companies - and a boon for those who have created Custom Content departments.

At its annual conference in Charleston, SC, today, the Custom Content Council (CCC), revealed an updated benchmarket survey it had first conducted in 2006. CCC, whose mission is to match the needs of marketers with the information needs of audiences, commissioned Roper Public Affairs and Corporate Communication to survey 100 CMOs and find out their inner most thoughts on Custom Content -- also called Content Marketing.

These CMOs across a spectrum of industries continued to see the upside of using content to build good relationships, and in fact, saw the cost of producing it as "not too expensive." These marketers are using 15 different content channels to reach their audiences -- notably, websites and newsletters -- both e- and print, and now, video, mobile and webinars.

Roper flipped the questions around and asked audiences their perceptions of content -- and while they admitted that they knew this content was meant to be persuasive -- encouraging people to buy, they didn't care as long as it was informative.

The research, said Andy Seibert, President & Publisher of SmartMoney (a Dow Jones Company) and CCC board member, "showed we don't have to convince marketers of the benefits of custom content."

Turns out that what readers want, is what marketers want -- which is good news for customer content creators.

New York Times' Pay Wall

To pay wall or not to pay wall, that has been the question.

Well the NYT did it -- they instituted the pay wall. (Paywall?? -- AP finally dropped the hyphen in email and the spaces in cellphone, smartphone and handheld -- although the hyphen remains in e-book and e-reader. Pay wall still has a space - perhaps because it is still a chasm for most newspapers).

But I digress. Only 3 months behind schedule, the Times has finally announced its new pay scheme. The critics are rolling their eyes, the schemers are figuring out ways around the fence, but I think Ken Doctor at the Nieman Labs has analyzed it best. The Times has, like every other newspaper in the universe, lost print subscribers, print revenue and while increasing digital subscribers, has not created a business model to sustain the legacy and additional digital workflows and deliveries. In other words, the Times had to do something.

Unlike the Wall Street Journal and Financial Times, which hawk (chest beat) important business news, which in turn mandate that all businesses subsidize subscriptions for its employees (or at least the top echelon), the NYT and other newspapers, is a nice to have. Supported by aficianados, news junkies and advertising, the NYT et al are trying to figure out how to get non-print subscribers to pay for content. It is a very slippery slope since the Times' brass does not want to (further) erode print subscribers -- but they do want a mechanism to be able to charge said aficianados.

I think they have done a fairly good job. The new price points will capture some digital-only readers at a weekend-delivery pricepoint -- which is far higher than the Journal's annual subscription fee. While the paper may see some churn in the 7-day a week home delivery (a $600 a-year-habit) vs $195 for all digital, it protects the all-important-Sunday home delivery price of $197 a year. Sure some of the $680m subscription franchise might be at risk, home delivery bears a much higher cost of good. If news print fades to black and the Time can convert a growing percentage of news readers to digital only at the rate of $200 a year -- management will be only too happy to jettison print readers -- and greatly improve margins.

Who knows, in a few years, it may be that the diehard print readers will be anteing up big premiums to continue that home delivery.

Publisher as Software Developer

A zillion years ago I worked for CBS Software -- a publisher of interactive games. CBS, which owned stations, programming, magazines (the poor Ziff books) and textbooks -- saw nothing unusual about being in software publishing -- it was merely one more form of packaging information and entertainment. Okay, so it didn't do a very good job with this group; the division was gone before the end of the 80s.

Still it was this notion of software publishing that I recently wrote about the Appification of Old Media; how publishers needed to embrace their inner geek -- and package their content in the form of applications. This may seem obvious, but with the exception of Epicurious, there are few publishers who have crossed the chasm and morphed into true software publishers. Until now.

Hearst Corporation, better known for its consumer mags and daily papers like the Houston Chronicle, has unveiled Manilla. The new service is a consumer cost management tool - for managing household expenses. The "Chief Home Officer" lets consumers roll up aggregate household expenses -- to get a better handle on expenditures. That Hearst created the app initially to get a handle on its own mailing expenses is immaterial. As Outsell surmises, "it does not take too much thought to realize that the greater benefit to Hearst is in becoming the de facto clearing house for such consumer information."

While the business plan is not yet clear, Hearst is creating a free app -- that ostensibly can become a very important advertising channel. More importantly, a consumer brand publisher is leveraging its knowledge of the market to create a new information product -- versus letting someone else do it.