Posts Tagged ‘advertising’

Will the traditional journal subscripton model make a comeback?

July 1, 2014

The other day my good friend Kent Anderson’s blog post on the Scholarly Kitchen “Hiding in Plain Sight — Is the Subscription Model the Optimal Business Model for the Digital Age?” is spot on as he sites several companies and industries that thrive successfully on the subscription model.  However the scholarly publishing industry has experienced significant growing pains and struggles going back to the eighties with the subscription model as the publishers increased their prices significantly due to changes in currencies, subscription cancellations, additional pages, etc.   I thought it would be useful to provide some further insights on this topic.

These developments prompted the library community to put in place their annual journal cancellation renewal program to balance the needs of their user community with their budget.  Prior to the launch of the digital initiatives like the one I launched for Elsevier, “ScienceDirect” in the Americas, librarians really did not have great usage stats to assist them in their annual review program.

 One of the key factors that I stressed to our customers was the significantly increased utility value they would receive with Elsevier’s subscription model for ScienceDirect.  In the print world they would have to buy multiple subscriptions of a popular journal.  In the digital world the limitations of print access are eliminated the utility value of a journal and or articles are greatly expanded.  Some time later we increased our digital offering with the introduction of the “Freedom” collection.  This allowed an institution to gain access to additional journals at a fraction of the cost.  The Freedom Collection the researcher to search across wider collections of journals/articles.  These plans allowed the librarian community to leverage their investment in scholarly journals and provide more content and value to their community.

 Consortia’s grew consistently over the ten-year period 1996 – 2006 and each participating institution was able to further leverage their access to additional scholarly content at cents on the dollar

Unfortunately, as the recessions (2001 and 2008) hit our economy, the budget pressures on the library were further exacerbated and the “Big Deal” became the “Big Villain”.  The Big Deal in my opinion was a very easy target as the librarians discounted the publisher’s arguments that it provided the consortium members access to a “huge” amount of content, some of which that was cancelled due to their previous budget constraints.

As the Counter statistics indicate, the utility value of the subscribed content has exploded over the last 10 – 15 years.  The library community has benefited from the “Big Deal”, in the face of their budget cuts however the serial crisis is still a serious problem for the entire scholarly publishing industry.  The scholarly publishing community (Publishers, academic institutions, researchers, etc., must come together to solve this puzzle.  I say puzzle as the pieces to solve the puzzle are there in front us, but the community must decide what pieces will comprise the new puzzle.

I would suggest that advertising will play a role in the new model to alleviate some of the financial burden and challenges facing the scholarly industry.  The role for advertising will need to be defined and will require experimentation.

Subscriptions are very good for the scholarly publishing industry but there must be a balance between cost and the utility value received by the academic community.  As I said the pieces to the puzzle are in front of us and collectively we must work together to put the new puzzle together.

Advertising: Future significant source of revenue for the scholarly publishers?

April 8, 2013

Advertising has played a major role in the print subscription model for a number of publishers prior to the Internet.  Print advertising was and still is quite prominent for a number of publishers, specifically in medical and other specialty journals.  Outsell Inc., the information industry research house, estimates that advertising represents 7.5% ($2.2 B) of the industry’s  $29.8 B revenue.[i]  The number of publishers incorporating advertising into their revenue stream is quite small when you consider the 7,000+ publishers worldwide.

The scholarly publishing industry’s (SPI) user group has embraced the mobile device.  The research community is now using smart phones, tablets and second screens. estimates the global mobile device to be 5.9 billion devices with the USA approaching 1 billion devices[ii].  The scholarly publishing industry has been and will continue to be under tremendous pressure as a number of factors will continue to challenge the library budgets and the publisher’s business model and revenue streams.  These pressures coupled with the growth of the mobile device market and the changing needs of the researchers are presenting a challenge and opportunity to the scholarly publishing industry.    Could advertising be that new opportunity for scholarly publishers?

These are the early days and the jury is still out on this question of advertising and the role it will play in the current and future revenue streams of the scholarly publishing industry.  To help the scholarly publishing industry to better understand the origins of advertising and the potential opportunity it may present, PSP’s (Professional Scholarly Publishers)  Electronic Information Committee’s spring seminar series will focus on advertising.  This three-part series will focus on the history of advertising, the opportunities and the future of advertising as it relates to scholarly publishing.  In the spirit of full disclosure, I am the co-chair of the EIC committee along with John Purcell.

As the research community is consuming scientific peer-reviewed literature and other related information via a number of devices, it is presenting the scholarly publishing community with a great opportunity for a new revenue stream consisting of advertising.  The Interactive Advertising Bureau’s (IAB) annual report provides a number of interesting facts about the growth of Internet advertising and the recent developments of mobile device usage.

According to IAB the 2012 numbers are not yet available, but in the first three-quarters of the year, Internet advertising revenues climbed to $26 billion (a high for the period) and up nearly 15 percent from the prior year. Full-year figures for 2011 showed our industry attracted more advertising dollars than cable television, magazines or newspapers. Digital media are now mainstream media.[iii]  The global mobile advertising market is valued at $5.3 billion in 2011[iv].

With the global mobile device market growing beyond 6 billion devices, we can safely assume that the advertising dollars will follow.  The mobile device manufacturers are selling mobile devices in all shapes and sizes.  The industry is working very steadfastly to better understand how to deliver advertisements to serve the needs of the reader in the most constructive manner.  The IAB, in partnership with 4A’s and ANA has embarked on a new advertisement measurement initiative called The Making Measurement Make Sense (3MS) initiative.  The goal is to help marketers and advertisers follow suit by evolving the way media is bought and sold to increase efficiency, value and understanding.  This initiative can be found on page 8 of IAB’s annual report.

If the scholarly publishing industry is going to better understand the internet advertising opportunity, it will be essential that it embraces the key associations, players, vendors, agencies, etc.  Developing a 360° degree view of the advertising industry is extremely important if the scholarly publishing industry will develop advertising from a minor role to a new major source of revenue.

As mobile usage continues to grow, the scholarly publishing community can take a look at the consumer trends to determine how they will behave in the scholarly publishing arena.  For example, 63 percent of digital video screening on mobile phones does not happen on the go, but rather at home[v].  What if this statistic holds true for scholarly researchers?  How will this affect how the researchers consume their daily scholarly information and what type of advertisements will work in their environment?

These questions and many others  will be asked and answered over the next few years as many will have much to say about this topic.  But one thing is for sure; the scholarly publishers who embrace the possibility of advertising becoming a significant revenue stream will open themselves to the opportunity.  For those scholarly publishers that shrug their shoulders at the idea of advertising generating significant revenue they will find themselves on the outside looking in asking the same question, “What is the business model?”

My answer: To be in business!

[iv] Source: global mobile Advertising market U.S. IAB, IAB Europe, and IHS Screen Digest

[v] Source: IAB mobile Phone video diaries Conducted by On Device Research for IAB

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