Best Practices in Digital Editions

Background
There has been much debate over the past decade about the future of
newspapers and their potential to not just survive, but thrive in the new
Internet economy. And, while there are still those who believe that “print will
prevail,” the pervasive lack of confidence by investors, and fleeing
advertising dollars to the likes of Craig’s List1 and Yahoo HotJobs2 have
woken up most publishers to the fact that the Internet can either be their
hope for resurrection, or the instrument of their demise, depending on how
they choose (or not) to embrace it.

For some, this revelation is just starting to sink in; for others, it’s been their
mantra for many years. Take, for example, Robert D. Ingle, executive editor
of the San Jose Mercury News. In 1990, years before browsers and Google
ever existed, Ingle proposed an online service called Mercury Center, aimed
at “extending the life and preserving the franchise of the newspaper.”3 Ingle
believed that newspapers needed to “give information to readers however
they wanted it, integrate the print and online operations, and dream up new
forms of advertising.” In the early 90s, Ingle was the darling of the
newspaper and in 1993, the Mercury News launched one of the first
integrated newspaper and online products. Within months other publishers
followed suit, including Gannett, Hearst, Times Mirror and the Tribune Co.

Unfortunately, Knight Ridder and the other early-adopter publishers didn’t

recognize the need to change their business to adapt to this new economy.
Many assumed that new advertising revenues would flock to their coffers if
they just put their content online. Little did they realize that content, in of
itself, would not be enough to garner the attention of plugged-in readers and
local advertisers.

The good news is that, today, for those who have survived, there are proven
strategies, business models and technologies that do work for online
newspapers and can turn what appears to be a bleak future into a promising
new beginning for the newspaper industry.

1
Jupiter Research, March 2007
2
Dow Jones Newswires, April 16, 2007
3
http://www.businessweek.com/print/magazine/content/07_45/b4057059.htm?chan=gl

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Digital Editions – The Best of Both Worlds
In transitioning newspapers from print to online, the most successful
publishers have discovered that the key to their longevity is to give readers
what they want. Sounds simple, but too many publishers offer digital
properties that do little to retain the interest of readers.

Because they were late to the Internet party, many publishers panicked
when creating their web presence and made the mistake of assuming their
print format was inappropriate online. Instead of harmonizing the two worlds,
they abandoned their widely accepted and proven print format for what they
thought online readers would prefer. This was a mistake and resulted in a
proliferation of poorly designed websites that were missing premium content
and were difficult to navigate. And, although newspaper websites attracted
readers, they couldn’t hold their interest for very long. As a result, the
hodgepodge of banner and link ads didn’t generate the revenue newspaper
publishers expected.

Case in point: The New York Times. A typical visitor to nytimes.com spent an
average of just under 35 minutes browsing the site in October 2007 – which
equates to about 68 seconds per day. And as low as that number seems,
it’s actually about 3 times longer than the average of the next nine largest
newspaper sites.4

For years, publishers of successful newspapers just couldn’t figure out the
right formula online. Today, however, more and more publishers recognize
that combining the best of both worlds (print and digital) is the optimal way
to attract and retain readers. They now offer digital replicas of their printed
editions, augmented with Web 2.0 features, and are reaping the rewards of
increased circulation. The reasons are simple:

1) Digital replicas provide an engaging user experience

Newspaper readers typically love to browse their favorite publications in a

specific way. While some start with the front page and move forward section
by section, more often you’ll see people pull out their favorite section first,
such as the Sports page to see the latest scores from the night before, or
Business, to see what’s happening in the markets.

Some readers save their favorite section for last, savoring it like the last
chocolate chip in a cookie.

Whatever way a person browses the paper, they tend to follow a daily
pattern and enjoy the predictability of the format. The same is true online;
4
American Journalism Review, December/January 2008 online edition
(http://ajr.org/article_printable.asp?id=4427)

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there is nothing easier to browse than a digital replica of a publication. You
can literally “flip” through the paper at your leisure and uncover stories and
related pictures you weren’t expecting to find. Reading a digital edition online
is fun and entertaining — just as it is with a newsprint edition.

2) Digital replicas offer news in context

As you browse a digital edition, you also discover which articles the editor
considered “hot” that day – their visual presentation in the paper being
evident by their: location, font size, size and number of pictures, length of
article, use of color, proximity to other stories, and so on. Not only do they
offer added insights to casual readers, digital edition articles can serve as
formal references for business users and researchers.

3) Digital replicas “stand out” from the millions of Internet websites

and portals

Ironically, their “traditional” format actually makes digital newspapers “non-

traditional” on the Web – they are less “Web-like” and so they are unique.
Digital editions use their standard print format and overlap it with advanced
digital features, creating a more interactive experience for the reader.

Digital replicas that are designed with engagement in mind allow readers to
bookmark and post stories on blogs, comment on stories and share articles
through email. They can translate articles on the fly, listen to articles, print
articles or crossword puzzles, search and monitor the printed media, access
back issues, watch embedded videos and interact with advertisers — all
without ever leaving the newspaper.

4) Digital replicas share a “standard” format that retains readers’

attention longer

The digital replica format is a standard for navigation and interaction across
hundreds of publications, regardless of country or language. Whether you’re
reading The Washington Post (US), The Globe and Mail (Canada), Le
Figaro (France), The Times (UK) or Kommersant (Russia), the format is the
same. There is a reason that it has survived over 400 years – it works.

And although the evolution of the digital edition will change over time as
readers’ behaviors and needs evolve, today the interactive digital replica has
proven itself to be most engaging and successful format for newspapers and
magazines on the Internet.

We have seen with nytimes.com that the average time a visitor spends on its
website is about 1 minute a day. Compare that with The Washington Post
digital edition with an average visit time of over 7.5 minutes and the National
Post Digital with a whopping 11 minutes!

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5) Digital replicas offer multiple revenue opportunities to publishers

Digital editions also offer the best of both worlds in terms of revenue
generation for publishers. Most publishers charge a daily or monthly fee for
their digital editions which supplements their declining print revenues. And
because digital editions count as audited paid circulation, they can attract
new advertising revenues online as well.

Best Practices for Digital Editions

So, given that digital editions have been proven to be the optimal format for
online newspapers today, what do publishers need to consider when
launching a new digital product?

Well, like any good product manager, a publisher needs to benchmark the
industry and learn from others’ successes and mistakes. They need to
research what works and what doesn’t. They need to adopt “Best Practices
for Digital Editions” — including: how to buy them, build them, market them
and monetize them.

How to buy them

There are a number of different business models for digital editions and a few
well-established vendors in the market from which publishers can choose.
The key is choosing the right vendor and business model for your needs and
budget.

Some vendors charge a setup fee before you even get started - sometimes it
is for a software license and sometimes it’s just an upfront charge (to get
you comfortable with paying and paying and paying). Some vendors also
charge a “per page” fee (e.g. $3 per page is not unusual), while others
charge a monthly fee of at least $1,000.

If you choose the software license approach, expect to pay in the

neighborhood of $75K-$100K. Two models follow thereafter: either the
vendor runs the digital edition and charges fees to do so; or the publisher
has to hire and train staff, and allocate resources, to maintain their digital
editions and support their online subscribers. This is not an insignificant
investment, especially when one considers the costs to update digital editions
when new software is released by the vendor, or when changes in Internet
technology or reader expectations mandate porting the digital editions to
new operating systems, browsers and platforms.

All of these models are lucrative for the vendor, but for the publisher it
requires a significant capital investment and represents a high-risk
proposition.

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So many publishers, such as CanWest (The National Post, Vancouver Sun),
Itronics Limited (The Irish Times) and Associated Newspapers Ltd (Daily Mail
and Evening Standard), to name just a few, are rejecting these vendor-
focused business models and choosing instead to “partner” with their digital
edition service provider.

In partnership with their supplier, publishers enjoy zero upfront

investment and zero operational cost, while the service provider provides
full hosting, payment acceptance, customer management and technical
support. These digital editions evolve seamlessly as the technology is
updated on a regular basis by the supplier and new platforms are supported
as they become popular with readers. This partnership approach offers a
more affordable solution to publishers who share both the risks and rewards
with their digital edition partner through a shared revenue model.

How to market digital editions

So you’ve got your digital edition up and running, you’ve built in SEO and
you’ve posted a link on your website, but no one’s coming. Surprised? Well,
you shouldn’t be. Just like with any new product launch, digital editions need
to be properly marketed.

The fundamentals are still the same – you need a plan that covers the 5 “Ps”
of marketing:
• People (Customer) Strategy
• Product Strategy
• Place (Distribution) Strategy
• Promotion Strategy
• Pricing Strategy

Publishers that have invested in “cradle to grave” marketing for their digital
editions have been rewarded with increased ABC circulation and new revenue
opportunities from advertisers who have witnessed the success of these
unique digital properties.

Your “People” Strategy: Know your audience.

What makes subscribers choose to read digital publications over print, or in

addition to print? What features are the most important to them? If you don’t
ask them, you will never know. Successful publishers ask their readers what
they want through surveys, polls or community forums, and then give it to
them. And they measure the results of new features after they are released.
The results of their research are worth sharing…

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Did you know that the number one reason people tend switch from print to a
digital edition is because it is more environmentally friendly? Did you know
the highest valued features are their “ease of use/navigation” and “look and
feel”? Did you know that the page that retains the interest of readers the
longest in most newspapers is the puzzle page?

Knowing what your readers like and how they read the paper is critical,
especially when you are looking to maximize retention and advertising
revenues.

Look for a vendor who offers the tools, technology and reporting capabilities
that can measure reader behavior and provide insights that can help you
continually improve both your print and digital edition versions of your
publication.

Your “Product” Strategy: How to build them.

To be successful on the Internet, constant innovation is mandatory.

Publishers should choose a partner with years of experience in digital edition
technology- a recognized leader in the industry who demonstrates the
“innovation” value proposition, and is recognized for moving the industry
forward. Avoid imitations; while they may be the greatest form of flattery,
they are indicative of a laggard in the digital edition market.

Technology platforms for

digital editions must be
flexible, robust and
extensible. Digital editions
that are portable to multiple
platforms and easy to
navigate on multiple devices
are much more attractive to
plugged-in subscribers.

Those that also offer

advanced digital features such
as instant translation,
keyword search, article
sharing through email and
blogs, audio, offline storage,
back issue access, and integration with new social networking and social
bookmarking services have been proven to retain readers’ attention for a
longer period of time.

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 The Need for XML Processing

In the process of preparing a newspaper or magazine for printing (e.g.

as PostScript or PDF), the geometrical properties of its elements are
computed and saved but most semantic structure or higher-level
modeling of the content is discarded.

For example, software routines will compute glyph coordinates, curve

parameters, colors, etc. but discard information about the grouping of
characters to make up words, sentences and stories; whether words
represent the author, title, caption, date or content; whether they are
structured as Table of Contents, indexes, lists or tables; what
diagrams are associated with what stories; etc.

What an ePaper vendor must do to produce a feature-rich digital

edition from the PostScript or PDF files generated by the publisher is to
reconstruct all the missing semantic information. This is no trivial task.

Some ePaper vendors use semi-automated tools combined with

manual assembly. This approach requires many person-hours of labor
to produce 1 title in about 1 hour.

A much more efficient way is through a fully automated PDF -> XML
processing and workflow system – i.e. a learning system that uses
Artificial Intelligence to process every page of the publication multiple
times to understand the publication-specific structure and semantics.

XML processing systems must be language-independent and capable

of processing very high volumes of publications quickly (e.g. 1 minute
per title).

When choosing an ePaper vendor, publishers should choose one that

already has the sophisticated XML processing technology in production
and do not rely on manual labor to generate feature rich digital
editions.

Digital edition technology platforms and features must also be tried and
tested with audiences that reflect the needs of a publisher’s subscriber base
before rolling them out to the publisher’s readers. This not only includes new
features and functionality, but user interface enhancements as well,
especially with the wealth of new devices and form factors being continually
offered by computer and mobile device manufacturers.

Look for a vendor who offers an aggregated platform where new digital
features can be prototyped and the results of reader acceptance measured,
before adding them to a publishers’ digital edition.

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One key capability of digital editions that is often under-appreciated or
blatantly avoided by publishers is the ability to aggregate content from other
sources, whether that content is from other publishers or from the readers
themselves. This is a feature that many publishers are still reluctant to
adopt, perhaps due to their long-standing competitive fears or the perceived
risks of un-moderated content diluting their brand.

Whatever is holding them back, however, publishers will eventually have to

accept the fact that although brand loyalty is still held in high regard with
older newspaper readers today, the younger generation cares less about
whose content it is — they want it all and they want it in one place where
they can compare perspectives and add their own. So, even if publishers shy
away from aggregation today, they should look for a vendor who can offer
aggregation now. This way, when they finally realize how important it is, it
can be swiftly implemented.

Your “Placement” Strategy: Where to distribute them.

With the introduction of digital printing back in the 90s, publishers were able
to reach audiences in new markets all over the world (e.g. hotels, libraries,
cruise ships, retail shops, embassies, etc). Readers could find their favorite
paper in a foreign country if they knew where to look.

Today, the paradigm has changed. Users don’t want to go looking for their
favorite publications — they want the publications to come to them, no
matter where they are and no matter what device they use (e.g. iMac, PC,
laptop, Tablet PC, BlackBerry, iPhone, Windows Mobile devices, etc)

With the plethora of devices out there, publishers need a digital edition that
can run on just about any device. They also need a digital edition that can be
accessed by readers when they’re not online.

Mobility and portability are key distribution factors that must be part of a
publishers “Place” strategy and part of the vendor’s arsenal.

Your “Promotion” Strategy: How to promote them.

When launching a digital edition, publishers need to

pay special attention to their existing subscribers
first and then look for ways to attract new readers.
Existing print subscribers need to know everything
there is to know about the new digital offering,
including how to access it, how to use it and what’s in it for them.

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Publishers need to let their print subscribers know that they don’t have to
sacrifice anything (other than inky fingers) to go digital. In fact, the message
should not only highlight the benefits of going digital (such as back issue
access, digital features, video,
mobility, audio, etc.), it should
invite readers to join them in
making a commitment to environmental sustainability by saying, “No to
newsprint.”

The obvious place to share these

marketing messages is in the printed paper
itself, but many publishers hesitate to
advertise their digital products in print,
perhaps fearing cannibalization. This is a
mistake.

The most successful publishers know that

you need to reach your audience where
they live, work and play and share with
them the same message over and over to
ensure they not only remember it, they
change their behavior.

Successful publishers promote their digital editions in their print edition every
day, providing information on free trials, cool new features and accessibility.

In addition, these publishers also use email campaigns,

billboards, flyers at trade shows and even television to get
the message out to existing and new customers.

The best digital editions are

extremely rich in features and
their success depends a lot on how easy it is for
readers to use those features effectively. Offering
online tutorials or even cheat sheets are good
marketing tools to introduce new features to users

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and to help them get the most enjoyment out of their online publication.

Your “Pricing” Strategy: How to monetize them.

Almost every digital edition offers free trials to new users – usually 3-7 days.
The key is to follow up with trial users to get their feedback on what they
liked and didn’t like about the experience, and build what you learn into the
next release of the product.

In terms of pricing, there are many different strategies being implemented

today. Some successful publishers offer free digital editions to their 5- or 7-
day print subscribers. Others charge a monthly subscription fee, which is
usually comparable or slightly less than the print subscription. A few of the
more progressive publishers offer the entire digital edition for free.

With the advent of new cost per action advertising models in digital editions,
it is anticipated that monthly subscription fees will eventually be phased out
by publishers and the digital editions will be free to registered users. Whether
this is next year or a few years down the road remains to be seen, but being
aware that free online news is inevitable is the first step to planning a
profitable monetization strategy.

How to transition from circulation-based revenue to advertising

revenue

Digital editions are platforms on which to build both circulation and

advertising revenue; however, many publishers still only see real value
coming in increased ABC circulation. This soon will change.

Newspaper publishers need to choose partners who are investing in the

development of technology and business models that will allow publishers to
transition from a circulation-based revenue model (which is not sustainable)
to an advertising-based revenue model (which provides much higher returns
than today’s online advertising models).

Today, the online publishing business is currently 10 times less profitable

than printing newspapers.5 While online spending is projected to continue to
grow from the current 5.4% of all newspaper ad expenditures, so far, the
online revenue is too small to even begin to
compensate for the losses from print
advertising6.

5
Inland Cost and Review Study, Inland Press Association
6
Newspaper Association of America, March 15, 2007 press release

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But there is hope. Local advertisers were expected to spend $7.5 billion on
online media in 20077, a 31% increase over 2006. Newspapers
own 41% of that market8 because ‘local’ is their unique value
proposition and something they do very well. Newspapers
have a strong connection with the local marketplace and play
a critical role in the metropolitan economy, where consumers
spend 80% of their income.9 Google and others are trying to
enter this market, but are struggling – this is where
newspaper publishers have a clear advantage.

But to exploit their local advantage, publishers and their

partners need to move quickly to help solve the “Online
Advertising Dilemma for Local Businesses”10 and generate
“more value per click” for local advertisers.

Publishers and their partners need to enable online “points of sale” within the
newspaper itself so that readers can transact with advertisers without ever
leaving the newspaper. This will maximize retention of readers and offer
publishers an advertising model that is easy to sell to local advertisers.

Conclusion
Enlightened publishers who have seen the light and are adopting “Best
Practices in Digital Editions” are already reaping the rewards of better reader
engagement, aggregation and new, more lucrative advertising models. Those
still living in dark ages are doing so at their peril.

It’s not too late to “resuscitate the cadavers,” but in today’s fast-paced and
competitive Internet world, publishers need to move quickly and deliver
compelling content and an interactive Web 2.0 environment that readers
demand, while providing high ROI advertising models to local advertisers.
A “wait and see” attitude will lead to the extinction of dinosaurs who still
believe “If I print it, they will come.”

7
Borrell Associates Jun 07
8
Borrell Associates Report on 2006 local online ad revenues
9
Growing local ad spend: Top seven predictions, ZDNet, March 20, 2007
10
What looks like disaster could be opportunity for newspapers, Newspapers and Technology, October 2007, page 34

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