Original URL: http://www.theregister.co.uk/2010/06/16/ipad_saves_wired/

Did the iPad just save Wired, and Conde-Nast?

High price, high sales, glossy ads, trebles all round

By John Lettice

Posted in Hardware, 16th June 2010 11:02 GMT

Saving the whole of the newspaper industry is a big ask, even for a "magical and revolutionary" device, but there might just be hope for the magazine business. The rapaciously-priced ($4.99 for this month's issue) iPad edition of Wired has comfortably outsold the somewhat cheaper print edition, and it's not even ad-free. On the contrary...

It's a success for 'definitely not free', which you might reckon is a problem for Chris Anderson, editor in chief of Wired and King of Free. Anderson however has been tetchily protesting - in between tweeting the digital edition's scorching sales figures - "For the umtpeenth time: FREE doesn't say everything should be free & The Long Tail doesn't say the blockbuster is dead." Still, it's a happy coincidence that exceptionalism should lie so close to home for him.

Clearly, we can't say how durable that exceptionalism is going to be until we've seen a couple more months' figures. Novelty value will have motivated some of the buyers, and sales will also have been boosted by the build-up for both the iPad and for Wired's first effort for it. And surely it's not feasible to just keep charging $4.99 a month when a year's sub to the paper edition can be had for $10. People are going to start saying, "hang on a minute…" But still, it does look like there might be something there.

Loads of money...

Apple takes a 30 per cent cut of an app's cover price, so if we estimate that Wired will move 90,000 copies this month, Conde-Nast (the publishing company) is looking at sales revenue in the region of $300,000. The seriously large (around 500 megabytes) app is also chock-full of what one presumes is high-ticket advertising, and there's an interesting innovation here - the clickability of Wired's advertisements is restricted.

Ordinarily, click anywhere on a web advertisement and it will fire into action, taking you away from the site and all too frequently presenting you with a not-entirely-fulfilling experience. Or worse, web advertising leaps out at you, and gets more and more annoying the more you try to ignore it. Wired's ads, on the contrary, are rather like Wired's print ads - you, the kind of rich, hip geek who laughs at $4.99 (I think myself into the part here) pause while you gaze contentedly at the car, the tech toy, the latest designer vodka. From New Zealand? What?

Brand ads reinvented?

Some of the ads don't seem to be clickable at all - so they're like traditional paper ads, largely about getting the brand in front of the customer. Where there is a clickable element, it's a low-key invitation to get more information that takes you through to the advertiser's site, where you can get that information and sign up for more, a test drive, or whatever. It's kind of like the paper ads where if you're interested, you take a note of the address or phone number so you can have a demo or a conversation later. And if you're not interested, you just flip the page.

It's by no means perfect in execution. Some of the ads are just too clever/discreet (for me to figure out, anyway), and if you do respond to the 'call to action' (what the ad industry calls clicking), you'll usually be taken out of the app, into Safari and over to the advertiser's site. When you reopen the Wired app it will take you back to where you left off, but this less-than-smooth part of the process explains some of Apple's thinking behind the forthcoming iAds.

Wired's ads in the paper edition have traditionally been largely about branding, which is a class of ad that the web's measurability had a murderous effect on. In the old days before you could 'tell' how effective your ads were, you largely thought/hoped they were working, and while you could probably figure out if they were having some kind of impact, you could never really tell which spending was effective and which wasted.

This was a happy situation for the ad agencies and the publishers, but possibly not so much for the advertisers. On the other hand, the web hasn't necessarily been good for them either. It's undermined their ability to get their brand in front of the right customers, and CTRs (click-through rates) are a doubtful measure of whether or not an ad is getting the desired results from the desired customers.

Wired's approach, however, seems to swing the pendulum back towards branding. As is the case with a paper magazine, you can assume that most of the buyers are going to see most of the ads, and you can also assume that most of them aren't going to be looking for more information because not a lot of them are going to want to buy, say, a new Infiniti (note for non-US readers - this is a car) right now. But because of the way Wired's ads are designed, not many of the ones who do click will have done so by accident - they really will want to know more about the product.

So the theory - which seems to me to be a good one - is that the sales leads the advertiser gets from these ads will be very high quality indeed. High salary, Wired demographic, interested in buying - it ought, surely, to work, on the basis of ads of similar quality to those in the paper edition, but with added functionality that makes them more valuable.

A minor irony here (in addition to Mr Free's interesting position) is that Wired publisher Conde-Nast has been notoriously rubbish at the web. It knows all about high ticket magazines for high-value readerships and expensive, glossy ads, but it never really made a serious go of internet publishing, and was widely thought to be shaping up as a prime victim of the death of paper. Well now, maybe not...

It's early days, and it might all collapse when the novelty value wears out, but if you can get 80-90,000 sales at a premium price out of an installed base of two million, then you can quite possibly maintain that or better it out of a larger installed base, dropping the cover price if necessary, or introducing subscriptions. Subscriptions are particularly cool from the publisher's perspective because you've got the name and address of the purchaser and the beginnings of a relationship. And although Conde-Nast may know squat about the web, it knows buckets about subs, and loves them dearly. If iPad magazine apps do work in the longer term, then Conde-Nast's skill set is suddenly valuable again. ®