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Digital Innovators’ Summit

‘Innovate or die’ has become something of a mantra for our industry. I know, writes Peter Houston, … it’s easier said than done. But at the Digital Innovators’ Summit in Berlin at the end of March there were plenty of media people ready to give it a go.

By Peter Houston

At this 7th annual magazine media innovation event, the association of German magazine publishers VDZ and worldwide magazine media association FIPP co-hosted more than 600 senior publishing executives, all looking for the next big thing – or at least a way to make the last big thing pay.

Technology highlights of this year’s DIS included a tour of Berlin’s dynamic start-up scene, content management systems that could fire content into a mind-boggling array of channels and endless lines of eager execs waiting patiently for their first life-changing experience of Google Glass. But the meat and potatoes of this future-facing conference lay in the stories of established media businesses adapting to make the most of the digital disruption.

The ‘D’ word

The original idea behind the DIS was to help content business leaders develop better ways of working in the digital space. At the first DIS in 2007, less than three percent of the attendees could claim any significant digital business. This time round, everyone had a digital component to their operations and there was a real sense of ‘let’s take this to the next level’.

Exactly what the next level should be wasn’t immediately obvious, but delegates got some solid advice, including Chris Llewellyn’s opening gambit - ditch the ‘D’ word. FIPP CEO Llewellyn said he had been trying to remove the word ‘digital’ from his own vocabulary since he realised that the prefix is becoming increasingly irrelevant; cameras are just cameras not digital cameras.

He screened a 1980s news report about a US experiment that encouraged newspaper readers to spend two hours downloading daily news texts to their TV screens over their home phone lines. Compare that clunky two-hour news download with the output of the summit’s 36-hour hackathon where hyper-intelligent millenials re-imagined news for mobile. The winning team hacked together an app that will convert text feeds into audio for consumers to listen to the news on the move.

The mobile moment

The hackathon’s mobile theme tied in well with one of the event’s headline prescriptions - get a mobile strategy. “This is the mobile moment”, said Juan Senor of Innovation Media Consulting, as he introduced the 2014 Innovations in Magazine Media report. The 100-page publication contains almost 40 case studies for magazine publishers looking to get to grips with the digital transformation.

With 55 percent of the population in Germany, Britain, France, Italy and Spain owning a smartphone, the report quotes Kim Lau of The Atlantic as saying, “The proliferation of content consumption via mobile devices is forcing the industry to think how we package content.”

Video is expected to feature heavily in those packages, although BAFTA-award winning video filmmaker Joseph Wade of London based publisher-turned-creative-agency Don’t Panic said, “I don’t know if any publishers have really cracked video yet.”

Ed O’Keefe, editor-in-chief of the mobile and social news start-up Now This News, implied that this lack of success came from trying to shoe-horn video content developed for one platform onto another. “You wouldn’t take what you produce for radio and put it directly on TV,” he said.

“What you create for the web, while a good marketing tool, may not be what the mobile or social consumer is looking for.” His approach is to create and distribute video content ‘native’ to the distribution platform, telling the same story five different ways across Vine, Instagram, Snapchat, Twitter and Facebook.

The Now This News combination of mobile video with social media was perfect for the event and the over-arching importance of social distribution was reinforced by Scott Lamb, VP International at Buzzfeed.

Lamb said that without the social networks, his business would be over. All of Buzzfeed’s revenue comes from ‘social content marketing’, content produced by or on behalf of sponsors and optimised for social sharing. He was eager to distance Buzzfeed’s future from the animated cat gifs that brought the site its early success, talking instead about the importance of quality content and even raising the possibility of investigative reporting at Buzzfeed.

No more lippy

Looking down the other end of the telescope, the head of brand management and marketing services at BMW, Steven Althaus, made a similar point about quality content. “Marketing will no longer be the department that puts lipstick on the gorilla,” he said. “It needs to be about a truth well told.”

Althaus explained that marketing claims are more open than ever to close public scrutiny. Speaking about the challenges of marketing BMW’s innovative i3 electric vehicle, he said customers want to know if the promoted innovation is real because that’s what will drive purchasing decisions. "Brands need to be transparent about what they do; the most attractive audience is the most sceptical," he said.

Frank Anton, Vice Chairman of US B2B publisher Hanley Wood, pointed to publishers’ deep market knowledge as a strong second string to creative innovation, noting that his own business had missed gaps in the market and lost out to pure-plays. “While we were busy building websites to claw back the money our print magazines were losing, we should have been building completely new businesses in our marketplace.”

Act like agencies

He said magazine publishers were ‘mad as hell’ because it’s not as easy to make money as it used to be, but recommended they could recover profitability by starting to act like marketing agencies.

PPA CEO Barry McIlheney endorsed this notion. "Magazine publishers are fantastically well placed to expand their traditional role and become more akin to a thoroughly modern marketing agency. We understand our consumers inside out, we talk to them in their language, and we now speak to them across a multitude of platforms and channels.”

The service approach is one already adopted by the Economist Group. Audra Martin, VP of Digital Advertising, told me at DIS that when The Economist first got involved in digital, there was a lot customers and agencies didn’t know. She said the same is now true in the content marketing arena. “No one was quite sure where it sat – PR, creative, media buyers.”

The Economist saw this as an opportunity to offer agency-style services, not looking to replace agencies but to complement their role. The challenge was building up expertise in content strategy and working with sales teams to provide consultative and creative services. She acknowledged that there were risks in developing a new team, but this was mitigated initially by waiting until the demand was understood. “The real investment was in building expertise in house, but we launched with freelance support”, she said.

Banner ads R.I.P.

In contrast to the attention content marketing was getting at DIS, banner display was pronounced dead. Innovation Media Consulting’s Juan Senor, asked the audience when they last clicked on a banner ad? "We all know banner display sucks. They don’t work and they never have worked,” he said to the audience following a few seconds of uncomfortable silence.

With banner ads dispatched, delegates were desperate to hear about alternative approaches to advertising, and predictably programmatic advertising was on the bill. The tension was palpable as delegates edged their way back from morning coffee for the 'Programmatic Ad Transactions' session. They knew they had to hear it, but they feared another impenetrable presentation on real-time bidding and distressed inventory.

Rick Welch, from the CatalystDesk at Condé Nast, while not completely managing to make the arcane world of ad tech sound simple, at least made it sound possible. Welch leads Condé Nast’s new programmatic team, half-a-dozen people tasked with introducing the latest advertising technology to the 100-year old media company's staff and clients.

He acknowledged the ad tech space was "complicated, fast changing and crowded" with programmatic causing trepidation on both the buy and sell sides. Advertisers and agencies are worried that complexity will cost them more; while publishers are terrified that programmatic fire sales will devalue their brands.

"It's a synonym for automation, a better booking mechanism, not a back door to lower rates. It frees up time for our buyers and sellers to be more creative," said Welch. In this context, he said his first job was to make friends in the broader publishing operation and explain programmatic: "The last thing we want is for sales reps to fight programmatic. You need your existing sales force to include it in their toolkit," he explained.

Welch was also very clear that he didn't see programmatic replacing reps. "There's no way we are eliminating our sales teams," he said. He explained that at the moment, Condé Nast is actually paying sales people on programmatic ads sold to their accounts regardless of who closes the deal.

Investing in tech start-ups

One of the final strands of the conference was the importance of investing in innovative start-up businesses as a way to jump-start innovation within legacy publishing businesses. Although California venture capitalist Brian Garret expected most larger publishing businesses to ‘fail miserably’ at innovation, partnering was a possible saviour.

Dennis CEO James Tye warned that investment shouldn’t just be about making money, joking that buying good red wine was probably a better long-term investment. But he did see minority investments in interesting start-ups as a way to drive innovation, bring focus and change corporate culture. Herman Kienhuis of Sanoma’s investment arm added that investing was a way for legacy publishers to cut the cost of experimentation and move more quickly, so long as they were willing to accept some loss of control.

There was a certain irony in the fact that this year’s Digital Innovators Summit took place in the Deutsche Telekom building that was once the centre of Germany’s telegraph network. Desperate to avoid the digital tsunami that killed off the telegram, magazine publishers want to know how to keep their products and services relevant.

Technology innovations like wearable computing, corporate hack days and programmatic advertising will play a part in the media company of the future. Smart investment and partnerships will help publishing firms catch up. New content formats, from short-form video to native advertising, delivered on mobile and amplified socially already have a role.

But the real lesson from DIS was that innovation can only come from a deep knowledge of the audience and their needs. US publishing veteran Bo Sacks, put it best for me, “Digital… print… the substrate is irrelevant. It’s all about reading.”