Wednesday, September 05, 2012

Newspapers getting outsmarted on mobile

Apple and Google, the two biggest powerhouses in Silicon Valley, have stepped up the battle to make their smart phones smarter so they can grab ever-larger shares of the local advertising market. 

Their efforts are a major threat to newspapers hoping to capitalize on the enviable power of their local franchises to become significant players in the vigorously growing mobile space. Unfortunately, newspapers are woefully behind. 

Mobile matters, because advertising purchases on handheld gizmos are expected to climb 4.5 times from last year’s levels to $7.7 billion by the end of 2016 – a sum equal to approximately a third of the combined ad sales of all the nation’s newspapers in 2011. 

BIA/Kelsey, the private research firm providing the above forecast, believes that half of the sales will come from location-targeted local advertising, a compelling format that pushes messages to specific individuals in order to pull them into nearby businesses.     

With more than half of Americans now equipped with smart phones and more page views likely to be consumed on small screens than on PCs within 18 months, competition revved to a new level over the summer among the many technology companies hoping to grab real estate, mind share and future revenues in the fast-evolving mobile marketplace.

The scramble kicked off in June, when Apple decided to boot Google’s long-dominant mapping software off the new iPhone scheduled to debut in the fall.  Google responded within days with an improved version of Google Now, a voice-activated digital assistant for its Android devices that emulates – and in some circumstances surpasses – the revolutionary Siri assistant that Apple put on its iPhones last fall.  At the same time, Google completed its acquisition of Motorola Mobility, providing the search king for the first time with the same end-to-end control over software and hardware that Apple has long enjoyed.  

The result of these major strategic initiatives is that your next smart phone will move from being a collection of individually helpful but largely unconnected applications to being increasingly dominated by a single master app that seamlessly and intuitively integrates the essential functions you commonly use.  As master apps become more powerful – this won’t happen all at once – they will marginalize the value of free-standing, single-function apps like those offered by newspapers. 

Smarter smart phones will anticipate your needs and advise you at every point of the day by accessing your calendar, indexing your searches, learning what you like to read, tracking your purchases and monitoring your location. 

In the not-too-distant future, your phone automatically will wake you in time to get to your first meeting, taking into account weather and traffic conditions.  It will guide you to the nearest Starbuck’s, where your standing order will be ready and the device automatically will pay for it.  The phone will route you around traffic jams and, at your command, tell your host how late you expect to be.  During the drive, the phone will read aloud your incoming texts, emails and voicemails so you can dictate immediate replies.  

Meanwhile, the phone will be aggregating and curating information in real time on topics it has learned you like, ranging from the latest news to cheap flights to Maui.  The phone will follow your voice commands to read the items you select and then fetch any additional information you request, alert colleagues to important articles, add items to your read-later list and nag you when you don’t read them. 

Over time, the phone will learn so much about you that it will be able to send you advertising, daily deals and other commercial information that are tailored to your evolving interests and specific location. And a great deal of that advertising will be from the local businesses that historically advertised in newspapers.  

The revenue potential for this intimate and immediate form of advertising is why Google and Apple are racing to make their phones as intuitive and helpful as they can be. Facebook, Twitter, Microsoft, Foursquare and dozens of smaller wannabes are in the hunt, too.

Meantime, the mobile app at the typical newspaper is as static, unintuitive and non-transactional as a brick.  

The only thing most newspaper apps can do is post the publication’s editorial output for the prior 18 hours. As this content gets sucked into the master apps running next-gen smart phones, the traffic at these single-purpose news apps is bound to shrink. Publishers, of course, can block the export – but only at the risk of further cutting their traffic. 

Even worse, most publishers never invested in capturing the sort of detailed information about individual readers that is the coin of the realm for modern digital advertising.  Stuck for the most part with selling run-of-site banners by the thousands, publishers have neither the data nor the technology necessary to deliver individually targeted or geo-aware advertising.  

Unless something changes incredibly fast, newspapers will miss the next big thing in media.

©  2102 Editor & Publisher


Blogger davidp said...

This is a tough equation for newspapers. The business model is still entrenched in revenue dependent on legacy distribution, while mobile audience has continued to grow with little effort required from the business. Mobile audiences now represent 20+% of online audience in some spots, but the traditional $ return against audience size is paltry, a result of the mobile business model. Media companies that diversify and develop businesses outside of ad sales and news delivery, may have an opportunity to fund more mobile development. But if the mobile product and platform are viewed as "extensions", and nothing more, of the traditional legacy product, the result is a low priority for mobile.

8:38 AM  
Blogger TechScribbler said...

Several years ago I helped a friend who does marketing and PR to try and convince a local business association to take up the issue of mobile and what that meant for their members. It was obvious, even then, that mobile would be a really big issue for businesses and that they needed to get on board and fast.

Needless to say, my argument fell on deaf ears. They were used to doing things through print -- they hardly had time for the Web, for pity's sake -- that mobile just seemed like another universe with an impenetrable language.

Newspapers don't look ahead, they react. That's why they're behind. I've been trying to convince another outfit I write for to include video with their reports and on their online site, but so far they've resisted saying they can't find a way to "monetize" video. They don't seem to realize that this stuff will create opportunities they can't imagine for themselves right now.

I'm at the point of despairing about the news business. I don't know if they'll ever catch on. If they can't get ahead of the smartphone/mobile curve, how will they ever make it?

10:55 AM  
Blogger Unknown said...

Yes...this is an electronic world entrapped with many electronic devices. These devices are becoming an important part of our lifestyle, we can't even think of our life without them.
Now people want all the applications in their phone which includes banking facilities, ticket booking, reading ebooks and digital magazines etc so why not to read newspaper in it. This provides ability to read that anywhere anytime and we can also switch over to other application with just one click.

11:59 PM  
Blogger Unknown said...

These devices are becoming an important part of our lifestyle, we can't even think of our life without them. Thnaks
Nice to see, that was a interesting article.Thanks for posting me great

3:24 AM  
Blogger CATSIP (California Active Transportation Safety Information Pages) said...

One word of caution about the prediction that smartphones will start to anticipate their owner's needs and wants and deliver them seamlessly: their algorithms are based on what their owner did in the past with perhaps a tweak about the possible behavior in the future, but I'll wager that as time goes by these "smart" helpers will seem increasingly out of touch.

12:47 AM  

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