7 Questions for Online Publishers Association's Pam Horan

Online Publishers Association President Pam Horan anticipates that publishers will forge ahead to develop new revenue streams beyond advertising in the coming year. Still, she remains upbeat about the future of ad-supported publishing in an era of social networks, exchange-traded media, and daily deals.

ClickZ: Where do you see digital publishing headed in 2012?

Pam Horan: We’re optimistic for both advertising growth as well as new revenue streams. There has been a lot of discussion with opportunities that exist with the introduction of the tablet. Many of our members have been able to build products that not only they can offer for free, but can offer as part of a new revenue model. We have done some research on tablet marketplace…consumers have demonstrated that they are willing to open up their wallets if the content and the utility combined with that content is of value. We have found that 79 percent of consumers have paid for an app and 25 percent of all apps were paid.

ClickZ: When you say new products – are they apps or anything else?

PH: As we look at the tablet marketplace, apps are one revenue stream. There are sites like New York Times, FT, Consumer Reports, and The Wall Street Journal that have successful subscription models. We also have members – OPA publishers – that have begun to build some interesting revenue streams, everything from looking at developing very successful events to building out businesses around local deals and offers to thinking about ways to monetize audiences through the use of data. Overall, we are very optimistic about the advertising marketplace and we continue to see growth there. But 2012 will see the introduction of new revenue streams.

ClickZ: Have you seen any publishers successfully monetize their presence on Facebook or Twitter?

PH: As we look at Facebook, I think about it in three different ways:

• Being able to extend your brand in that environment.
• There’s also the opportunity to think about social in terms of what’s happening on actual websites of the publishers to activate and encourage social activity.
• There are ways that marketers can participate via the publisher with social media and that can include Facebook and Twitter strategies.

Our publishers are doing something in all of these areas. There are examples of how publishers have established brand pages and experiences within Facebook as well as building very robust commenting platforms within their own environment. And then finding social programs to offer the advertising community. For example, iVillage worked very closely with American Express to build a program where they [iVillage] could offer American Express a platform to connect with mothers that needed to have “the talk” with their children, and that conversation was about managing their money and finances. They leveraged the core assets of iVillage: an established community of women.

ClickZ: Everyone is trying to get at “social analytics,” yet it’s difficult for publishers because of content on their site – people might be commenting not about the publisher, but about the conversation happening on the publisher’s site.

PH: If I look at social, in some ways, we [publishers] put the media into social media because content is at the center of the conversations. Without content, you don’t have the conversation. In terms of looking at ways to capture that, you can look at just the commenting that takes place – the sheer volume is one metric. There are engagement metrics. We are starting to see analytics begin. We are moving into a direction where the majority of conversation taking place is centered on content and much of that content is being developed by OPA publishers.

ClickZ: Brands are trying to connect directly with their audiences – and trying to cut out the publishers as middlemen…

PH: For quite some time, marketers have looked for ways to connect directly with consumers. Brands recognize there’s a value in the environment that professional content can deliver. Consumers are coming to The New York Times, Epicurious.com, or People.com to get information. These sites have been aggregating very valuable audiences for a long time. Marketers recognize there’s real value in that contextual environment for them to deliver their messages…Not all brands lend themselves to a direct relationship.

ClickZ: What impact are you seeing exchange-traded media platforms having on publishing?

PH: It’s still really early. I’ve seen numbers for the overall market – that it’s representing 10 percent of the overall inventory. For OPA members, it’s a fraction of that in terms of inventory that members are putting into exchanges. There could be a healthy relation that exists there.

Several members have created very effective private exchanges: the work that NBCU is doing is one example. They are being very thoughtful about how they are defining their inventory and segmenting it in a way to ensure that RTB [real-time bidding] doesn’t become the definition for the race to the bottom, but rather is valuing the inventory appropriately…If we look at the history of the ad networks, unfortunately there were a couple of bad apples – not all – that created an environment where it wasn’t the healthiest way for publishers to offer their inventory. We have had many publishers [that] no longer work with ad networks. They felt they could better represent their inventory and that includes ESPN, CBS, and The New York Times.

ClickZ: What other innovations are OPA members pursuing?

PH: One of the unique assets many OPA publishers offer is cross-media, cross-platform solutions. Cross platform is not just the web and mobile. But it’s offline experiences and not only newspapers and magazines or cable outlets and broadcasters, but also physical experiences. For example, the Street.com has a very successful events program where they are taking their personalities, whether it’s Jim Cramer or other personalities within their family, and building programs not only to build their brands but also to bring their advertisers’ brands into their environment.

Our initiative around the introduction of OPA ad units a couple of years ago is another example. Marketers realize it’s a great way to deliver their brand messages, rather than trying to focus on getting the consumer to click away – which is a direct metric. If you are going to develop a branding campaign, it’s about developing a relationship with the consumer over time. And if you are trying to drive someone to take a direct action, your messaging and creative is going to be very different