Mobile advertising has seen an amazing surge along with the rising penetration of smartphones and mobile broadband.
As more people rely on the small screen of their phone for live news, sports updates and real-time stock quotes, print media executives are looking for a new business model to compensate for the sharp decline in advertising dollars in their traditional source of income.
On Monday Hong Kong Apple Daily, the flagship newspaper of Next Media, relaunched its supplement section, which now integrates the print and online versions. Rather than treat the two as separate entities, with one playing a leading role and the other a complementary one, the publication offers its readers a combination of both.
So in Apple Seed, the name of the new supplement section, a feature story appearing in the newspaper will also be featured in the online edition through a parallel video program. In effect, the reporter who writes the newspaper article also acts as the television program host for the online edition of the story.
From an editorial perspective, Apple Daily would like to enhance the coverage for its supplement section by providing new ideas and insights to its readers, who are mostly from the middle class and have pro-democracy leanings.
On top of consumer-focused articles on shopping, travel and gadgets, Apple Seed also features profiles of celebrities and interesting people, stories on Hong Kong’s rich cultural heritage and personal healthcare.
The dual focus on both print and video allows the publication to reach out to more digital-only readers, who prefer watching videos on the newspaper website to reading the text of stories online. The strategy also provides a more compelling argument for advertisers to choose Apple Daily since it offers both print and online vehicles for their advertising campaigns.
The paper’s new model is not expected to affect advertisers’ budget allocations too much, considering that they base their decisions on the publication’s readership profile and circulation figures.
But Apple Seed offers an opportunity for native advertisement, which could be a new revenue stream for the newspaper.
According to Vincent Tsui, an executive editor at the newspaper who is in charge of the supplement facelift, said native advertisement has emerged as a new revenue source for newspapers in western markets.
A native advertisement reads like a normal newspaper article which adheres to certain journalistic tenets such as fairness, comprehensiveness and objectivity. In that sense, it is different from an advertorial which uses the hard-sell approach to convince readers to buy certain products or services.
For example, a smartphone maker can sponsor a staff-written feature article on the latest and upcoming models in the market, which of course include the company’s own products.
For the same article, Apple Seed can get advertisers of related products and services to join the campaign.
Tsui cited IBM as an example of native advertisement in its supplement on big data technology.
Overseas, newspapers such as The New York Times and The Washington Post have brought native advertisements to their print products following the success of their online platforms. They have found that the new format has provided fresh, engaging stories for their readers, despite the fact that it is part of an advertising campaign.
Based on the experience of several western newspaper publishers, native advertisement has proven to be a win-win solution for both newspapers and advertisers. Research firm BI Intelligence forecasts that spending on native advertisements will reach US$7.9 billion this year and grow to US$21 billion in 2018, from just US$4.7 billion in 2013.
For Apple Daily, native advertisement offers a new source of revenue at a time when both print circulation and print ads are on the decline. The newspaper is in the best position to gain from the new platform. It has a massive online readership of more than 2 million a day, although its newspaper circulation has fallen below 200,000 copies.
Apple Daily has been hurting as a result of its pro-democracy stance. After several big property developers boycotted the newspaper, Apple Daily saw its advertising revenue shrink 21.4 percent to HK$328.6 million for the six months ended Sept. 30, 2014 from a year earlier.
Of the amount, advertising revenue fell 26.7 percent to HK$192.6 million.
Indeed, native advertisement offers a new income stream for Apple Daily. But the newspaper should avoid any situation that may blur the line between its editorial and sales teams. It must always protect its credibility.
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