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Does commerce hold the keys to tablet success?

13 Dec 2012

It's that magical time of year when analysts squint at endless streams of holiday sales data in an attempt to determine the general health of the economy. A couple of new data points specific to mobile commerce underscore the need for publishers to consider upping their investments in content development for tablets.

Affiliate Window, a UK-based affiliate marketing network, released new data this week showing that sales through mobile devices across its network exceeded 12 per cent of all online sales for the first time in November, more than double the percentage from a year ago.

Separately, comScore, as part of its "Cyber Week" research, said digital content and subscriptions was the fastest-growing e-commerce category in November. Digital content, which includes digital book, music and video downloads, increased 25 per cent vs. a year ago.

The first data point signals a growing opportunity for publishers to add commerce functionality to their digital editions and other tablet and smartphone apps. The second supports the theory that consumers are willing to pay for digital content delivered through their mobile devices - a strong indicator for a subscription-based revenue model for tablets. This year, two-thirds of mobile revenues are expected to come from apps, the rest from advertising, according to KPCB.

Collectively, along with expectations that tablet and smartphone growth is a long way from peaking, the data shows a budding mobile economy that publishers can't ignore.

"Tablet penetration in households is rising at a rapid rate. And we've seen some amazing initial sales of the iPad Mini," said Gregg Hano, CEO of Mag+, the Bonnier spin-off that sells tablet-publishing tools and services. Pew Internet estimates that one-quarter of all U.S. adults have a tablet - impressive growth for a category that didn't exist three years ago.

"These shifts in consumer behaviour reinforce the fact that this medium will continue to grow, and more and more publishers are starting to realize that this is the future," said Hano.

Mag+ is doing its part to fuel the growth of tablet publishing. Nearly 800 apps have been built using Mag+, with more than 4,000 issues published. Last month, the company released a Mag+ software development kit (SDK) that lets publishers build custom apps instead of using the standard Mag+ template.

Among other features, the SDK lets publishers add commerce functionality to their apps. The commerce features are attracting new types of publishers, including retailers and online merchants looking to publish interactive catalogues.

"We have an interest in enabling content owners of all kinds to distribute their content on tablets and smartphones," said Hano.

Publishers should consider that trend another warning sign of brands favouring owned media over paid media. Integrating commerce functionality into or adjacent to editorial content is one way publishers can improve the value proposition of their tablet editions to advertisers. Another is to help brands add commerce features into their own creative.

Brands and agencies have been slow to invest heavily in tablet-optimized advertising. Just 13 per cent of the ads in publishers' iPad apps have commerce capabilities, according to McPheters & Co.'s latest app-tracking research. There's an opportunity there, if publishers are willing to adapt their traditional ad models and provide agencies with the data they need to justify additional spending.

Platform vendors can help here too. Mag+, for example, is looking at ways to better serve ads dynamically into digital editions. "That way, if you buy a back issue, some of those ads can be fresh and time-relevant," said Hano.

In addition to building out the feature set of the Mag+ tools - a new release is scheduled for January - the company is also extending the Mag+ portfolio. New services include the recently launched Mag+ Studios, which offers creative development services for publishers building tablet editions, and the forthcoming Mag+ Solutions, which will help publishers and brands write code for different types of apps.

Source: emediavitals

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