The bundle business, V2 style; DOOH and the numbers game
With newsbrands beginning to offer readers specialist subscription packages, Dominic Mills wonders whether the benefits are worth the risks. Plus: A look at Route's response to DOOH
We’re used to hearing about bundles. Fat bundles, thin bundles, unbundling, rebundling…it’s becoming everyday language. The so-called quad play — bundling mobile, landline, TV and broadband — is one version. Bundling TV services, if not here already, is coming soon.
Now the concept seems to be spreading. The Telegraph, for example, is one newsbrand dipping its toe into the water, offering readers a sports-only subscription. In the US, the New York Times has been unbundling away for a while, offering, for example, cooking- or crossword-only deals.
This unbundling appears to be working for the New York Times, according to Colin Morrison’s excellent Flashes and Flames blog. He says its Crosswords app now has 500,000 subscribers at $6.95 a month, and Cooking 200,000 subs.
You can see how this could play out: I might like to combine the Times political or op-ed coverage with the Guardian’s arts coverage. Or vice versa.
The question is how newsbrands can manage this: do the benefits of attracting new or light readers outweigh the possibility of cannibalisation, or the long-term danger of unbalancing the full product by chasing ‘sports’ money or some other speciality area and degrading general news coverage where there is general uniformity of output?
Putting news to one side (and there’s plenty of good-enough coverage out there for free) it’s an area worth pursuing. Unbundled, single-subject, subs could be positioned as loss leaders designed to draw in full subs. They are certainly areas where newsbrands have a distinctive offering, and sometimes too a distinctive tone of voice. The Guardian's arts coverage is different from the Telegraph’s. While they all cover the same sports events, albeit to marginally different levels, it is their columnists and star writers who offer differentiation and add value.
Morrison, however, takes this a step further. The arrival in the UK of US-based, online-only The Athletic, with a mission to exhaustively cover the Premier League and the budget to hire big-name writers, is a threat to newsbrands, Morrison says. Newsbrand subscribers for whom football coverage is a primary driver could thus be peeled off.
After football, other areas could be vulnerable: cooking, arts, politics, travel, tech, cricket and so on.
Here, Morrison has an interesting suggestion: that newsbrands and specialist magazines could help each other by building together strong verticals. The primary contribution of the newsbrand would be reach, while that of the magazine would be depth and additional authority. As Morrison says, the internet encourages specialisation, and “readers, especially digital natives, are increasingly prepared to pay only for exclusive information – and only for the stuff they actually want".
He’s right. If 500,000 people are prepared to pay for a daily crossword app (ok, I’ve just never got the pull of crosswords), all kinds of areas suggest themselves.
DOOH, footie and the numbers game
Those people at Route certainly like to have a bit of fun pulling the OOH numbers this way and that to provide some unexpected perspectives.
Here is Route’s Euan Mackay taking on the challenge of adding OOH to Mary Meeker’s famously daft attempt to correlate screen size with share of total advertising budget (which she uses principally as a prism to boost mobile), but adding the additional dimension of screen size as a proxy for impact. His conclusion (semi-spurious): OOH offers a ‘wow’ factor of at least 68x that of a mobile screen and a scale factor of up to 251,000. Go argue.
Now, in response to advertiser-led criticism that the OOH industry is favouring digital over old-fashioned paper and paste, and thus hampering advertisers’ ability to achieve mass reach, Route has set out to demonstrate the fallacy of this argument.
To give it a timely twist seeing as the football season is underway, the numbers are based around reach by football club. In towns with Premier League clubs, 82.7% of fans will see a digital screen once a week. In Scotland, this is 83%. For Championship clubs the figure is 79.5%.
To take one example, Route looks at Swindon, highlighted by Nationwide’s Chris Ladd as an example of where the OOH industry has got it wrong. Home to resolutely mediocre League Two Swindon Town (but hey, they once got to the League Cup final, and in the early 90s were managed (briefly) by Glenn Hoddle), the figures show 78% of residents are exposed to digital at least once a week. This is less than Leyton Orient and Crawley, but significantly better than Scunthorpe (demonstrating, I think, a certain bias among the OOH players in going for the more affluent locations).
And, as you might expect, this is repeated among unfashionable towns with unfashionable clubs — e.g. Ipswich, Blackpool, Accrington Stanley, Burnley, Norwich and so on.
But reach among Premier League clubs tends to be high — in the high 90s for London and south east-based clubs, declining the further north you get. And there’s a surprisingly low figure for the Manchester clubs.
There’s as many numbers as a football stats geek could want, but Route’s point is that digital coverage is beginning (and that is a critical word) to grow outside the wealthy conurbations.
Whether that is fast and widespread enough for mainstream advertisers who want national coverage is a matter for debate, and how hard the OOH players will work to extend coverage to footie towns like Stoke, Preston and Bury is a matter for debate.
Just like small clubs from outside the wealthy areas almost invariably fail to break into the big time, so it's hard to see DOOH going outside the big cities. Like football, DOOH is driven by money.
Mediatel operates two essential services for the OOH industry. SPACE is a collaboration between IPAO and Outsmart and is the most comprehensive and up-to-date list of inventory in the UK. The RouteAPI is a SaaS solution that enables easy integration of Route audience data into client's systems. See mediatel.co.uk/ooh for more information.