Advertising Types in Tablet/eReading Context – Text Advertisements, Static Print Advertisements, and Extended Print Advertisements

In the following posts, I will demonstrate several advertising types that have been found in eReading context. Through these advertisements and their classifications, it is easier for us to understand how advertising is conceptualized in this novel medium. In this first post, I will go through three types of advertising: text, static print, and extended print advertisements.

1. Text Advertisements

One of the most basic forms of advertising in eReading medium is plain text advertisement (see Figures 1, 2, and 3). This form of advertising is different from other eReading advertising forms because it is not embedded into applications but rather to functions in an external space, such as on a tablet’s desktop screen (see Figures 1, 2, and 3) or as a pop-up on top of other applications (see Figure 4). This kind of advertising form requires that the user has enabled the application’s “push notification” service, and the electronic reading device is on and it is connected to the Internet (Apple – About Apple Push Notification Service). Approval of the push notification service happens usually when a user installs a certain application and opens it for the first time; the application asks the allowance for push notifications. In addition, a user can control push notification settings afterwards in the control panel of a device.

Figure 1: People Magazine's Text Advertisement

Figure 2: Better Homes Magazine's Text Advertisement

Figure 3: Sport Illustrated Magazine's Text Advertisement

Figure 4: Better Homes Magazine's Promotional Text Advertisement

This kind of advertising or, rather, notifying may be a valuable tool for publishers to promote their products, such as recently published magazine issues (see Figures 1, 2, and 3), or sell former issues in discount prices (see Figure 4). Furthermore, newspaper publishers may attract readers to return to the news application and, thereby, increase the frequency and impression rates of the advertisements in the application.

Despite its simple and non-interactive nature, this form of advertising may be strongly noticed by readers. As text advertisements pop up to the center of the screen, it is unlikely that a user would not notice the occurrence. Yet, it is unclear whether the user pays attention to the content of these messages or ignores them subconsciously. This phenomenon is tangential to the concept of advertising clutter (see e.g. Ha and Litman 1997; Rumbo 2002) which is widely known in advertising research and literature.

Fundamentally, text advertisements in eReading context are similar to text-based mobile advertising messages (i.e. SMS advertising). SMS advertising has been traditionally considered as a relatively effective advertising channel. Some studies show that almost 90% of sent SMS advertisements are read by consumers and SMS advertising is able to increase the likelihood of purchase (Rettie, Grandcolas, and Deakins 2005).

2. Static Print Advertisements

Print-like advertisements are static photo-based advertisements that do not contain any interactivity, such as animated movements or clickable links to external landing pages (see Figures 5, 6, 7, 8, 9, and 10). These kinds of print replica advertisements were reasonable in early 2000s when both electronic magazines and newspapers were technically produced in static PDF-format and, thus, the electronic versions were identical to printed ones (Audit Bureau of Circulation – Summary of March 2011 U.S. Board Actions). Even today when technologies have developed and electronic reading devices are able to take advantage of more sophisticated solutions, static print advertisements are still strongly in favor of advertisers and print publishers.

Figure 5: Buick's Static Print Advertisement

Figure 6: Movado's Static Print Advertisement

Figure 7: Banana Republic's Static Print Advertisement

Figure 8: Ray-Ban's Static Print Advertisement

Figure 9: Rolex's Static Print Advertisement

Figure 10: Jaguar's Static Print Advertisement

However, it is presumable that the popularity of using static print advertisements will be fading out in the near future. The reason for this is that the Audit Bureau of Circulation (ABC) of North America updated their definition of “Digital Replica Edition” in last March (Audit Bureau of Circulation – Summary of March 2011 U.S. Board Actions). Previously, the digital replica was defined as the identical copy of the print edition. That is, in order to have been defined as digital replica, an electronic magazine had to contain all the same editorial content, including photojournalism and advertising, as the print edition. The importance for publishers to meet the “Digital Replica” requirements was clear because identical digital replicas were counted toward the rate base which, in turn, dictates the price that a publisher can request for an advertising space. In the other words, the higher the rate base, the higher the advertising revenue. Therefore, the qualification requirements of circulation stipulated that also advertisements should be identical with  print versions. Ultimately, a natural way to obey the qualifications was to translate the whole magazine, including advertisements, into a static PDF-format.

In last March, ABC of the U.S. modified the qualification requirements of the “Digital Replica Editions”. Even now the digital replica editions must contain the same editorial and photojournalism content as the print versions but the following modifications have been made due to the development of electronic magazine and newspaper delivery devices – eReading tablets, in particular (Audit Bureau of Circulation – Qualification and Reporting of Digital Circulation; Audit Bureau of Circulation – Qualifying Your Magazine’s iPad Edition):

• “The edition can be reformatted to accommodate the delivery device being used, provided the editorial content is presented in a fashion that is similar and consistent with the print publication”
• “Hyperlinks, video, audio and other similar web-enabled enhancements will not impact the consideration of the edition being a replica, provided placement of the editorial remains consistent with the print version”
• ”Advertising beyond what appears in the print edition will not impact the edition’s possible qualification as a replica”

These modifications open up several novel possibilities both for advertisers and publishers. The most significant change is related to the notion that editorial and advertising content can be reformatted to adapt different delivery devices (Audit Bureau of Circulation – Qualifying Your Magazine’s iPad Edition). This means that advertisements in eReading context no longer have to be static print replicas in order to be eligible for circulation calculations.

From advertisers’ viewpoint, static print advertisements may not bring about distinctive benefits when compared to other eReading advertising formats. Despite the fact that these advertisements are “printed” on high-resolution publishing platforms and the visual quality of the printing quality is not dependent on paper attributes, they still lack  interactivity and engagement aspects that make eReading medium a competent advertising medium.

3. Extended Print Advertisements

Extended print advertisements resemble static print advertisements in their visual layout but, unlike static print advertisement, they contain some interactivity, such as clickable links to external, online-based web pages (see Figures 11 and 12). In both advertisement types, advertisements seem stagnant which makes it challenging for reader to realize that the ad contains some interactivity. Besides, the clickable areas are relatively small when compared to the overall advertising space which means that clicking requires additional effort from the reader. Even further, most magazine and newspaper applications are designed in a way that a single tap on the screen opens a menu bar that covers the link area. The above-mentioned matter occurred in the both advertisement types.

Figure 11: Ralph Lauren's Extended Print Advertisement

Figure 12: Cadillac's Extended Print Advertisement

From advertisers’ viewpoint, the extended print advertisements offer more opportunities than mere static print PDF-replicas. These advertisements contain a crucial “call to action” element meaning that advertisers are able to utilize several online advertising mechanisms in ‘print-like’ context. An advertiser is able to, for example, collect potential leads (Figure 12) or generate direct sales in an external e-shop (Figure 11) through the advertisements. The present interactivity offers various goals for advertisers and enables publishers to take advantage of various direct performance-based advertising metrics that are usually not used in a print media context. Ultimately, the extended print advertisements can be priced according to online medium models, such as pay-per-click or even pay-per-action.

Reach, frequency, and impression potential in eReading advertising

”The medium is the message”, as one of the most prominent thinkers in media industry, Marshall McLuhan (1964, p. 23), stated a few decades ago. This famous phrase means that different media carry a significant role in conveying a message and, thus, it is not only a matter of contents. This well-known concept is increasingly topical in media context where electronic reading (eReading) phenomenon has created a novel media form. According to professionals’ forecasts, global eReading device wholesale will reach nearly $50 billion in 2015 (Butcher 2011). The growth rate will be significant since the first major multifunctional device, iPad, was released only last year, in 2010.

The rapid expansion, if prediction-like, will have its impact not only on media content consumption but also on advertising. As the major tipping point of eReading devices is still upcoming and the usage level of this particular medium is far less than other mass media formats, the role of eReading advertising is somewhat blurry. Since the effectiveness of advertising is almost without exception evaluated by comparative quantitative and qualitative measurements (see e.g. Bendixen 1993; Danaher and Mullarkey 2003; Dijkstra, Buijtels, and van Raaij 2005) and advertisers seek to maximize advertising campaign effectiveness by selecting the most efficient media channels or combinations of media (Leong, Huang, and Stanners 1998; Diehl and Terlutter 2006), it is crucial to consider, what kind of quantitative and qualitative objectives eReading advertising can obtain at the early stages of its development. Deeper understanding of the strengths and opportunities of eReading advertising is especially important for newspaper and magazine publishers whose business models are highly dependent on advertising revenues (see e.g. Wirtz, Pelz, and Ullrich 2011). For many of them, advertising revenue is the single most important revenue source as it provides on average two-thirds of the overall revenue (Orchard 2010). Even further, some free press publishers’ whole revenue model may be based on advertising revenue.

In this blog-based benchmark study, I will explore some of the most used advertising media characteristics and analyze the eReading medium accordingly. In order to define the role of eReading medium and its advantages in a wider advertising context, we have to specify the nature of eReading medium. Probably the most explicit way for determining the essence of this novel medium form is to compare it against other closely-related advertising media. This comparison is presented in Table 1. The table combines traditional advertising media characteristics (see e.g. Surmanek 1995; Calder 2008) with contemporary features. In this first blog entry, I will go through the first three classical media characteristics: reach, frequency, and impression. In my latter blog posts, I will embedd 13 other media features into benchmark cases.

Figure 1: Characteristics of major media forms

Reach potential refers to a medium’s ability to accumulate a large number of people within its total audience. In the other words, it assesses the percentage of audience an advertiser wishes to reach and has an opportunity to expose to the advertising message (Surmanek 1995). From a publishers’ viewpoint, obtaining an extensive reach is a central issue since it has a strong positive impact on advertising revenues (see e.g. Glover and Hetland 1978; Picard 1998; Koschat and Putsis 2002). For instance, traditional mass media, such as TV and newspaper, have relatively high reach potential. The single most reach-capable commercial TV channel in the Finnish media context has almost 4 million weekly reaches which is 74% of the whole population in Finland (Finnpanel – TV Audience Measurement). As a whole, TV as a medium has the potential to reach almost 82% of the total Finnish population (Finnpanel – TV Audience Measurement) which makes this medium significant. As newspaper delivery in Finland is fragmented and geographically well-distributed (cf. Finnish Audit Bureau of Circulations), its overall reach potential as an advertising medium is relatively high despite the notion that a particular newspaper cannot itself harness an extensive part of population. Moreover, magazines are able to reach a comparatively large population in certain categories (cf. Finnish Audit Bureau of Circulations). Due to the large proportion of non-subscribed customers and occupational magazines wherein advertising is somewhat restricted by the publisher, the actual media reach cannot be directly transferred to an advertising context. Activity in online media has been steadily growing year after year in Finnish advertising markets (see e.g. TNS Gallup). The largest advertising-oriented web pages have over 2 million unique weekly visitors (TNS Metrix) and, as a whole, 86% of Finnish population used the Internet last year (Tilastokeskus – Tieto- ja viestintätekniikan käyttö 2010).

For the meantime, the reach potential of eReading is just a fraction of the reach ability of other media (Preliminary company interviews of eReading research project). In order to reach a satisfactory number of consumers, eReading medium has to go through three diffusions. Firstly and most importantly, the diffusion of eReading devices has to attain the level wherein an adequate number of consumers are fundamentally able to be exposed to eReading-centered content. Secondly, users have to adopt a novel way of consuming magazine and news content. Especially, the new eReading-oriented news and magazine consumption, that substitutes traditional physical print media, requires several, somewhat deeply-rooted, behavioral changes from the readers’ part. This results in a slower diffusion process. From this perspective, the underlying factors of behavioral adoption can be found from innovation diffusion literature (Rogers 2003). Accordingly, one may pose a question about the relative advantage of eReading devices in comparison to physical print or online news; whether the novel way is compatible with existing habits, norms, and patterns of news reading and whether this type of consumption of news is facile enough for the masses. Thirdly, the competitive landscape needs to be considered with regard to eReading advertising. When the aforementioned adoptions have been undergone, publishers have to compete for readers’ interest and convince them to use just their news application or platform. This is especially relevant in the case of newspapers’ since they have less overlapping usage (i.e. people do not usually read actively more than one newspaper) than magazines (see e.g. Surmanek 1995). Therefore, it is crucial that not only the contents of electronic newspapers are competitive but also the overall characteristics of the application are easy to adopt by readers. In this respect, newcomers can also evenly compete against established actors. Let us consider an example: The Daily magazine, owned by News Corporation and launched in February 2011, operates only in eReading context and competes actively against established newspapers, such as USA Today, New York Times, Wall Street Journal and other major national print newspapers. At the moment (May 1st), The Daily is the fourth most popular news application in Apple’s iTunes (iTunes – Top Charts) which makes it more popular than USA Today (5th place) with the largest newspaper circulation in the United States (World Association of Newspapers – World’s 100 Largest Newspapers). This example demonstrates that popularity in print or online context does not automatically funnel readers to eReading environment. Therefore, the proportion of advertising revenues in the eReading context may end up being rather different when compared to traditional print setting.

When it comes to the reach of print advertising, a central concept is ‘pass along circulation’. The term refers to those readers that have not obtained a particular newspaper or magazine by purchase or equivalent means (Imber and Toffler 1987). Thus, the total audience of a magazine or newspaper is the sum of its paying and non-paying subscribers/buyers and its pass along readers. In the case of certain Finnish newspapers and magazines, the pass along effect is extremely crucial with regard to advertising revenue. For example, home decoration magazine, Avotakka, has circulation of only 37 833 (Finnish Audit Bureau of Circulations), but has an audience of nearly 434 000 for each issue (Kansallinen Mediatutkimus). Therefore, each published issue reaches over ten additional readers making pass along effect a highly essential factor for the magazine’s advertising pricing.

The nature of eReading devices may impair the pass along effect in the magazine context. This is due to the fact that eReading content cannot be passed to next reader after the first person has read it. In addition, since eReading devices are highly multifunctional products meaning that users can use the device for several other purposes, such as casual web surfing, e-mailing and so forth, it is not possible to leave unused magazines stewing for others. Besides, as magazine issues are generally out of physical sight in the device and starting to read requires several distinctive steps, electronic magazines are not prone to impulsive flicking or reading by occasional readers. At a general level, it can be assumed that eReading devices are personal products whose usage is similar to other highly personal products, such as mobile phones. Therefore, their content usage may be confined mainly to its main user.

Frequency is the average number of times an individual is exposed to advertising messages (Surmanek 1995). Traditionally, newspapers have been perceived as encompassing a relatively moderate, or even low, advertising frequency; a single newspaper issue has a short-lived nature meaning that the static content is usually read only once. Furthermore, newspapers have less audience duplication than magazines meaning that most people read only one daily newspaper (Surmanek 1995). Magazines, in turn, are more timeless and long-lived; readers are exposed to advertisements more often. Magazines are also, to some extent, “collectable” products and their pass along effect is higher.

Electronic reading devices entail vast potential in terms of advertising frequency. First of all, due to remarkably low current reach, advertisers are able to utilize frequency-based advertising with relatively low costs. This is evident in the eReading applications of major newspapers, such as NY Times, The Daily, and USA Today, where advertisers have been quite constant for the past four research weeks. The second factor, that facilitates frequence-based advertising in eReading context, is the possibility to update electronic content throughout the day. For example, USA Today, NY Times, and The Wall Street Journal have online-like news applications where news change constantly whereas The Daily’s application resembles a traditional print newspaper that is built upon previous day’s news and is delivered fixed. In this sense, readers may return to the dynamic content on their own initiative or electronic newspapers may utilize “push notifications” (see Appendix 1) for persuading readers to return to the application throughout the day. From an advertising viewpoint, returning readers, may those return from own initiative or publisher’s, increase the frequency rates of an medium.

Figure 1: Push notification

Impression potential refers to the total number of advertising exposures that the media can potentially generate; it is the number of people who can be reached one or more times (Surmanek 1995). Even though eReading medium’s frequency potential is relatively high, the overall impression remains low due to the minimal reach potential. However, the future impression potential of eReading medium is apparent. As it is, in an online context, top three web pages, that have most impressions (TNS Metrix), are largely based on news content. When eReading devices reach their mass diffusion, they may become a highly influential impression-centered medium.