Digital Publishers See Ad Value in Magazines

When big name digital companies like Yahoo, Say Media and Flipboard start talking about the value of creating magazines, you better believe that people are taking notice.

Lucia Moses in Digital Day writes about the trend in “Why digital publishers want to be in the magazine business,” citing several big names in the digital industry.

“Backwards as it may sound, online ‘magazines’ have become core to Yahoo’s strategy to make the site a regular destination for people,” Moses writes. “Along those lines, CEO Marissa Mayer has been introducing several verticals in topics including travel, food, beauty and health — all typically the domain of glossy magazines.”

Add to this the fact that Yahoo has made some intriguing hires of late from the print magazine world—David Pogue of the New York Times, Julie Bainbridge from Bon Appetit and Elle’s Joe Zee for starters as Moses notes—and the popularity of the magazine format for digital companies seems solid.

Like any business decision, it’s about revenue potential, and the smart money is on “high-quality, editor-driven products with real audiences, not just listicles, in the hopes that it will translate into revenue,” writes Moses. These are the vehicles that advertisers value.

“Look at the rates of magazines compared to online ads,” Moses explains. “A single page in a glossy magazine could be discounted by more than half its open rate and still get an effective CPM of about $70. Online display ad CPMs average under $3, according to Nomura Securities via eMarketer, and even less for programmatic.”

And it’s not just digital magazines that are appealing.

“Print magazines, meanwhile, are everything online publishers want — they stand for something with their audiences, they have established rates based on a long tradition of buying and selling. The publisher can artificially limit supply by cutting pages,” notes Moses.

Combine this with the fact that desktop ad spending is flattening and expected to decline, while mobile ads haven’t pace, and the idea of selling magazine ads is looking pretty good for these digital companies.

Whether they can do this successfully with a digital-only product remains to be seen, but it’s definitely worth watching. Meanwhile, the magazine industry can take pride in the fact that the products we produce are highly recognized for their value to the advertisers.

Nicely done, magazines.