Newspapers Primed For Mobile Growth
That thing you always seem to be carrying in your hand, looking at while you blithely cross the street ignoring traffic — the rectangular object made of metal, silicon and impact-resistant polymer — is a magnet: a people magnet and therefore a money magnet.
It’s a people magnet since the number of smartphone users is extensive and continues to grow. Online research firm comScore’s measurements indicate that 153 million people in the U.S. owned smartphones in November last year (64% of overall mobile phone owners). No doubt purchases of those devices during the holiday season likely pushed the market penetration to more than two-thirds of all Americans.
It’s a money magnet, since advertisers are pouring more of their budgets into mobile ads. Analysts at eMarketer estimate that while mobile accounted for about 12% of digital ad spending in 2012, it was likely about 23% last year, totaling $9.6 billion. And Facebook reported fourth-quarter advertising revenue at $2.34 billion, 53% of which came from mobile ads. That was a 23% increase from the same period a year ago.
The smartphone audience tidal wave has lifted the audience for newspaper digital content to new heights, and shows little sign of abating. ComScore expanded reporting measures of digital audiences beyond desktop and laptop computers early last year. The measurements now include mobile devices, smartphones and tablets, which gives a more comprehensive, and therefore more accurate, gauge of the audience.
By comScore’s measurement conducted for the Newspaper Association of America, the total U.S. audience for newspaper digital content rose to 148 million unique visitors in December 2013. That is an increase of more than 19 million for the seven months from June to the end of the year, a 15% gain. Those unique visitors using mobile devices for newspaper digital access grew by more than 24 million unique visitors in the same period, to a level of 85 million for December. Those who were mobile-exclusive, meaning they used either smartphones or tablets but not desktop or laptop machines, increased 45% to 39 million unique visitors.
But newspaper media are not merely relying upon a device-adoption tide to lift the digital boat. They are aggressively developing new products and services to capture audience and advertising. The Boston Globe’s Boston.com announced last month that some of its sports content will appear on the sports social network Fancred.com. Fancred’s iPhone app connects fans with a few thousand sport-specific online communities, of which sports-crazy Boston is an important component. Beantown fans will get special “sneak-peeks” of content that will appear on Boston.com’s content-rich sports section.
True, there are many competitors to newspaper enterprises in the suddenly-popular news category, including everyone from Google News and Flipboard to the just-launched Paper by Facebook. But strategically, newspapers are focusing on building their local audience and focusing more of their advertising sales and business service efforts on small and medium-size businesses in the local markets. Local businesses rely on local customers to ring the cash register in-store and online. Newspaper operations over the past two years have established digital marketing services to assist SMBs as they embrace mobile and social media. And these SMBs are also embracing native advertising on their local newspaper digital platforms to communicate with existing customers and draw in new prospects.
The mobile audience engaging with newspaper digital content will grow again in 2014, and more advertising dollars will be attracted to that content. In 2012, the advertiser investment in the mobile advertising component was tiny, accounting for only about 1% of total newspaper revenue from all sources, but the dollar amount doubled in 2012 from 2011 and was on pace to exceed that in 2013. Combined with the additional monies that will be generated by subscribers paying for digital content of various types — not just traditional news — the mobile world of audience and advertisers will be a key element for the success of newspaper media.
Jim Conaghan is VP of research and industry analysis at the Newspaper Association of America.