WIRELESS for LESS

Folio: The Magazine for Magazine Management, July, 2001 by Caroline Jenkins

A mobile-computing-device-compatible Web site may not be a huge source of revenue just yet, but it is a relatively low-cost investment in the expansion of a magazine's brand.

ABOUT TWO YEARS AGO, OFFICERS AT PENTON Media's Industry Week decided to create an online version of the title for readers with wireless Internet capabilities. Because it required little additional coding and no new content development, it cost almost nothing to launch and little to maintain, says Tonya Vinas, Industry Week' s managing editor.

But so far, the wireless version of IndustryWeek.com has attracted only modest--though growing--reader interest. In April 2000, readers using Internet-enabled mobile phones and PDAs checked out the Web site about 2,000 times; in October 2000, that number had reached about 3,500.

Industry Week' s experience with the wireless Internet mirrors that of a number of magazines that bet on the growth of mobile computing in the past couple of years and are now confronting a somewhat disappointing truth: Although the space may be very inexpensive to jump into, user and ad revenue numbers have remained fairly flat. And at a time when most publishers are frantically trying to drum up ad dollars, many balk at pouring money into what they fear may be just another Internet black hole. Yet what the bold few Industry Weeks of wireless publishing do demonstrate is that, while making the minimal investment in a mobile magazine won't fatten a bottom line right away, it's an easy way to extend a title's reach.

Executives at Gemstar's TV Guide launched their own wireless Web site in April with a goal similar to Industry Week's: promote the TV Guide name to mobile Internet users. "There is limited advertising on wireless devices right now," admits Tom Hagopian, president of TV Guide Online, who declined to discuss his company's specific ad revenues. "But [the wireless arena] is really not that expensive to get into. And, most important, it represents a tremendous branding opportunity."

Advertising, however, presents something of a problem for wireless devices. The somewhat pricey mobile technologies generally work best with smaller, stripped-down text versions of Web sites. A separated sentence acknowledging a sponsor, then, tends to stand out more than it would in any other medium. And flashy, full-screen ads take longer to load and are slightly more intrusive on a hand-held's small screen than on a television or computer screen. For both these reasons, advertisers--especially those using longerloading graphics or image-based ads--run the risk of alienating users who pay for airtime and who, in essence, pay to view an ad. A recent Forrester Research brief finds that 33 percent of advertisers surveyed aren't interested in advertising on wireless PDAs, and 50 percent aren't interested in advertising on wireless phones.

Still, many believe that improvements to the existing mobile computing devices in the near future--improved visual quality, shorter image-loading times and smaller price tags, for example--will make handheld devices more appealing to the average consumer and ultimately snag advertiser interest.

But mobile publications haven't taken off--yet. "Although the number of wireless users hasn't skyrocketed as was originally expected, it certainly has gone up in the past couple years," says Zia Daniell Wigder, a senior analyst with Jupiter Media Metrix. Nevertheless, mobile Internet use should rise--though slowly, says Wigder. According to one Jupiter study, the are currently less than 20 million active wireless data users in the United States; by 2005, Jupiter forecasts, that number will equal about 75 million. And total wireless advertising revenues in 2005 will probably top out around $700 million.

Many magazines are financing their wireless Web sites with minimal advertising or none at all, since advertiser interest has been lukewarm. Fortunately, companies like AvantGo, Conduits Technologies and Coola, to name a few, work inexpensively with content providers. These mobile service providers develop software that acts as Internet browsers. The companies allow consumers to download their browsers and then online content to hand-held devices for free.

AvantGo, for example, posts links for downloadable "channels" of news and articles from content providers in a central subscription hub at Avantgo.com. The company works with a fairly long list of high-profile clients, including Maxim Online, The Sporting News, Bloomberg and RollingStone.com. Previously, the company charged a percentage of revenue derived from the mobile publication; today it charges upfront setup fees. (Smaller publications can publish less-wellmarketed "channels" for free.)

AvantGo's mobile Internet services general manager, Mike Aufricht, believes publishers will one day charge substantially for advertising, sponsorships, subscriptions and even mobile commerce, opening up a whole new revenue stream for publishers.

Chances are that publishers won't implement such fee-based revenue models any time soon. Until then, they must rely on revenue from the minimal advertising they can sign on. And many wireless Web sites can be painlessly maintained by an existing online staff.