Tablet editions ready to take off - here we go Mobile Advertising!

In January 2010 the iPad was introduced to the world by the Apple icon Steve Jobs. Just like the iPod backed with iTunes changed the music industry he proclaimed that the iPad would change the way we consume media, be it magazines, news, games, books or movies. For many of us early adopters it already has done so, and now, two years after its introduction the iPad is selling like hotcakes. And so are some other tablets, like the Kindle Fire by Amazon.

Global tablet shipments hit 66.9 million units in full-year 2011, surging 260 percent from 18.6 million in full-year 2010. Consumers are increasingly buying tablets in preference to netbooks and even entry-level notebooks or desktops. In 2017 market researcher NPD expects tablet sales of 383 million units and a total of > 900 million tablets in use. Key drivers are convenience, the abundance of apps and users wanting permanent internet access (mobile or Wi-Fi). Tablet sales already took off in mature markets and now the 3rd world will follow:

So how does this relate to consumers? As many as 19% of U.S. adults own a tablet, and 29% of U.S. adults own either a tablet or an eReader, according to the latest study from Pew Internet. What’s amazing about these findings is that the share of U.S. adults who own tablets nearly doubled from 10% to 19% between mid-December 2011 and early January 2012, and almost the exact same thing happened to eReaders, which grew from 10% to 19% over that same time period. 

In Finland and Sweden it's still early days - the iPad came on sale in the Nordic countries only in December 2010 - but sales have now taken off. In Sweden there were 283,000 iPads in June 2011 and eBook sales tripled in 2011. Now there are plans in certain communities in Sweden to replace textbooks with iPads.  In Finland there are more than 170,000 tablets now, but we're catching up.

So what's happening in Media? The global advertising market has been in favor of print for the last 10 years, but this is now changing. Advertising budgets always follow the usage patterns of the consumer - only with some delay. The shift of advertising budgets from print to digital - including mobile thanks to tablets & smartphones - is a global trend. It's now time to put in more effort to come up with creative advertising solutions for the mobile platforms.

Tablet readership is up and many Publishers have recently reported rising figures for their tablet editions. And some of the readers are new to these titles, i.e. have not been traditional print subscribers. A few examples of different strategies by Publishers:

1. The Guardian launched a "Digital-first" strategy in June 2011 and launched their smartphone and tablet apps in October. The aim is to achieve "a major transformation" and to double digital revenues to 110M euros by 2015/2016. Investment into digital platforms is supported by pricing that clearly favors digital vs. print, e.g. an iPhone subscription is approx. 6 euros / year and the price of a subscription of The Guardian and its weekend magazine on the ipad is 12 euros / month. The price difference is illustrated below.

2. The Financial Times now reaches 2.2 million people worldwide on a daily basis. More people than ever are consuming FT content in print, online and through mobile devices. The number of people accessing FT.com daily has surpassed 900,000, showing a 36% year on year increase. The FT has seen a sharp rise in mobile users, with increases of as high as 66% on smartphone and 71% on tablets in the last six months. The number of people who read FT content on two or more platforms every day has risen to over 300,000. In the case of FT only 10 articles per month are for free on any platform. FT research has shown that reader who consume content on more than one channel are more engaged in bot the FT brand and advertisers' messages. The FT HTML5 app is highly popular on the iPad and iPhone.

3. The New York Times paid digital subscriptions rose by 20% from Q3 to Q4 and numbered at 390,000 at the end of 2011. Digital subscription strategy helped circulation revenue grow by 5% (now 12% of total revenue). On the NYT website only a limited number of articles are for free. The digital subscription scheme of the NYT can be reviewed here: NYT Digital Subscription and Premium Products

4. Helsingin Sanomat, the biggest Finnish daily newspaper, has been available on the iPad since December 2010. Sanoma News, the Publisher, recently introduced a new subscription scheme called "HS Combo" = Paper + Digital subscription. Digital subscription includes digital paper, HTML-version of the paper, access to archive, iPad and smartphone channels (all smartphone platforms supported including Windows phone). The digital subscription is priced at 18 euros / month, for print subscribers it varies between print subscription +3-7.50 euros /month, depending on the total package. HS Combo is the primary new sales alternative, consumers like it and it accounts for 80% of total new subscription sales. The new iPad user interface includes the weekly and monthly supplements, as well as daily weather forecast, news videos and online news. 

5. Otavamedia, one of the largest publishers of magazines in Finland, was first out with iPad magazines in October 2010. The popular magazine Tekniikan Maailma (TM), about cars, consumer electronics and technology, has become popular with a new audience on the iPad. Half of the readers are not subscribers to the print magazine or buyers of single-copies at newsstands. For Otavamedia the in-App shop works well. The price of a single copy is 6.99 euros. A combination of print sunscription and tablet edition is not yet available.

Whilst it's still early days one can already see a shift towards digital readership. A recent study by IDG Connect suggests digital replacement of analog content is now high amongst tablet owners. Asia and the Middle East lead the way with, respectively, 90 and 80 percent of respondents saying they now purchase fewer printed papers. For newspapers 72% of worldwide professionals say they are buying fewer since owning an iPad. For books 70% say they are buying fewer printed books. In Scandinavia and Finland these figures may differ, as we have a long tradition of reading the papers at home with the morning coffee. Many of the print subscribers are 55+. Generation Y (born 1980-1995) are generally not avid readers of printed newspapers.


It will be interesting to see the development of tablet editions this year. Big trends will be a shift towards HTML5 technology for apps for major Publishers. The highly popular HTML5 web-based apps for the FT and The Economist show the way, although there are still some issues with iOS 5 on the iPad.  In the case of the web-based app all the income for subscriptions and advertising go to the Publisher, as opposed to the 30% charged by Apple for content purchased on the App Store. And the customer data stays with the Publisher, a key to success. And that matters, e.g. The Economist are targeting a million digital readers by 2013.


In advertising the introduction of more personalized SmartAds based on consumer behavior and geodata seems to be the trend - 2012 may well become "the year of Mobile Advertising."


The above were some of the themes discussed at the eReading & Tablets seminar arranged by Finnmedia in Helsinki on February 8 2012. Some of the presentations you will find on eReading seminar 8.2.2012