Can magazine companies compete online?

I guess it’s theme week. And this week’s theme is all about magazines and the web.

Yesterday, I pointed to an interview with the business editor of Wired magazine regarding magazines and the web. Today, the Wall Street Journal has an article on the same topic, focusing primarily on the web strategy of Wired’s parent company, Conde Nast.

Quote:

“Web revenue for magazine companies is about 5% of their total revenue, says Martin Walker, chairman of Walker Communications, a magazine-consulting company. “While [online ad revenue] is growing quickly, it is not replacing lost print revenue,” he says. “None of them can compete on the Web in terms of traffic.”

While I’m sure Mr. Walker knows what he’s talking about, I sometimes think I’ve heard that statement said so many times by so many magazine industry people that it — to me, at least — has risen to the level of a tenant of faith — or an accepted myth. Again, I’m not singling out Mr. Walker — most of the people I know in the magazine world would say the same thing: Revenues from online operations are growing fast, but can only, ever be a fraction of lost print revenues because, well, magazines websites will never be able to compete on the Web for traffic (which translated, means: “with Google”).

I’ll skip the whole economics of the two different business models — economics that include the overhead of marketing, production and distribution in magazines — that make a mere comparison of top-line revenues irrelevant.

I’ll go ahead and jump to my challenge of the core belief represented in the quote: “None of them can compete on the Web in terms of traffic.” I don’t understand that theory. What does it mean, exactly? Who can Conde Nast not compete with in terms of traffic? (Again, those are rhetorical questions: The implied message is that magazine companies can never compete with Google for traffic.)

I believe a more important question to ask is this: Is traffic the the only — or the universally definitive — competitive metric of the web? Will traffic always be the metric used by advertisers to determine where they should invest their marketing dollars? Obviously, if I sell widgets online and search engines deliver me customers who are in the process of buying widgets, I’d place an extremely high value on the traffic metric. But what happens if (or, when) advertisers who aren’t driving online transactions decide “time spent” on a website is a more critical measure of engagement than unique users or pageviews? Or what about when they realize that massively-traffic’d web services and applications that are utilities and tools, rather than media one experiences — or engages with — are perhaps not the right environment for brand-building marketing?

Or what if some types of advertisers (i.e., consumer brands that aren’t using the web to drive online transactions, but to support a brand) realize that a better means of determining where to advertise is something like the Techmeme Leaderboard that ranks which websites tech-niche bloggers are pointing to. Can magazine companies compete for a top spot there? Well, one could easily dominate it if it they purchased a few properties like TechCrunch. But even today, there are plenty of print-centric brands represented on the list. Moreover, once you move outside the world of technology news, I’m sure one would find that the “leaderboards” of online media are already print-centric brands. Want one example? Here is the leaderboard for a sister “memetracker” of Techmeme, the politically-focused Memeorandum. Do print-centric brands compete there? Answer: They dominate it. (Hypothetical question: If a leaderboard of food bloggers existed, where would Epicurious rank?)

Obviously and without a doubt, Conde Nast will never compete with Google in terms of traffic. But is utility-oriented traffic what a Conde Nast’s goal should be? Google is a search engine. People use it to find what they are looking for. If Conde Nast’s web properties are what the searcher then clicks to — and engages with and blogs about and develops conversations and relationships around, isn’t that “engagement” what brand marketers want?

In the end, raw traffic will be the competitive metric of search-oriented advertising — a massive and powerful new form of advertising that leads directly to decisions and transactions. However, another form of online advertising that’s focused on brand-building and lifestyle-association will gravitate to those places on the web where people engage in their passions and loves.

And that’s an arena where magazine companies should be able to compete rather forcefully if the people who run them would get over believing in the myth that such a competition is over.

FeedDemon’s “Popular Topics” is like a personalized Techmeme.

[Note #1: This a somewhat long and geeky post about RSS newsreaders and memetrackers. If you aren’t obsessed with those topics — and believe me, if you’re not, I understand completely — you should probably skip it.]

If you use FeedDemon, the RSS newsreader for PCs running Windows from the Denver-based company, Newsgator, you should check out a feature called Popular Topics. According to the software’s creator and developer (and my friend) Nick Bradbury, he’s been working on the feature for over a year — indeed, it was announced and included in the software beta several months ago, but in a rather hidden place. With the current release (2.6) of the software, “Popular Topics” has become a more prominent (and faster) feature.

[Note #2: I’m sure there are at least two people reading this post who are wondering why the heck I’m blogging about software I obviously can’t use — they know I’m hooked on NewsGator’s RSS reader for Macs, NetNewsWire. Why I know about Popular Topics on FeedDemon will be clear by the end of the post, promise.]

The FeedDemon feature is, in effect, a meme-tracker. However, instead of analyzing news stories and relevant blog posts that are being linked to by a mysterious universe of topical-bloggers (or folks trying to game it), the feature analyzes the stories that are being linked to by those in a network of bloggers you choose — those to whose RSS feeds you’ve subscribed. (There’s another view that provides a view of what all FeedDemon subscribers are pointing to.) Additionally, the feature allows you to have a “time” view of such conversational clusters. For example, if you’ve been away from your computer a couple of days and you’d like to see what the “popular topics” among your subscribed-to bloggers were on Wednesday, the feature allows you to do that.

In other words, it’s like having a Techmeme that is “memetracking” topics important to just those bloggers you desire to follow, rather than all bloggers who post on the topic.

[Note #3: I’d like apologize to Gabe Rivera, the creator and still champion of an amazing set of approaches and algorithms that power his memetracking marvels (Techmeme.com, Memorandum, WeSmirch, Ballbug) because I did the cheap trick in the subject line of this post when I said Popular Topics is like Techmeme. As I posted recently, bloggers and tech-journalists have resorted to using Techmeme as the comparative benchmark by which they describe any feature or service that tries to pick-up and present links of blog-posts related to some alpha-content. Sorry, Gabe. In reality, Popular Topics is not competing with Techmeme, because no one addicted to news from the Techcrunch/Valleywagosphere is going to unplug from it.]

So, how did I learn about “Popular Topics”? Actually, it was in a conversation over lunch with Nick Bradbury (who, like me, lives in Nashville) in which I was talking about how much I like Techmeme, but how I think it is so skewed towards SF Bay-area news. I told him I wished Techmeme was available in some other flavors that weren’t so covered in Techcrunch/Valleywag syrup. In other words, it would be nice if I could tweak a personal version of Techmeme to leave out all blogs devoted to tracking any sneezes made by Facebook executives, for example. (Actually, I didn’t express my pet-peeve exactly that way, but you get the point.)

That’s when Nick told me he’d been developing a feature on FeedDemon that let’s users create a meme-tracker focused only on the feeds to which the user subscribes. After lunch, I asked him to come to my office and demo it for me (we have several Windows machines). And that’s how I can blog about a feature that I can’t use on my own computer — (Note to Brent Simmons: although it would sure be nice if such a feature were added to NetnewsWire so I could.)

Again, I do not see this replacing, or even competing with Techmeme, as I don’t think people should cut themselves off from the bigger world, however, this is a cool way to get another view of the conversations in your world.

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