NEW YORK (AdAge.com) -- Flipboard, an iPad app that turns shared links on the web into a beautiful digital magazine, is out to prove it's got a business model too -- for content publishers and for itself.
The startup, which launched with much fanfare and $10 million in venture funding earlier this year, is conducting a trial with several publishers for what it calls "Flipboard Pages," which allows Flipboard to pull publishers' content into their app and surround it with big full-page ads built for the iPad.
Flipboard will then share ad revenue with its publisher partners, which initially include ABC News, News Corp.'s AllThingsD, Conde Nast's Bon Appetit, Hearst's San Francisco Chronicle and The Washington Post.
Flipboard has been making the rounds to talk to publishers -- including glossy magazine publishers that have their own iPad apps -- but is still figuring out how the ad sales and revenue sharing will work best. Publishers may ultimately sell their own Flipboard inventory, or Flipboard may do the selling, as it is doing in the current trial. "The first priority is to test new ideas that help brand advertising traditionally reserved for print expand to the publisher's digital content," said Marci McCue, who heads marketing for the firm.
Flipboard has been applauded for its excellent user interface but also criticized for aggregating content without permission, stripping it of its context and adjacent advertising in the process. Flipboard generally pulls the first three paragraphs of a story, the headline and art -- but no byline -- and includes a link for users to click through to the web site if they'd like to read on. We cast doubts on its proposed model soon after its introduction.
Publishers that sign on for Flipboard Pages agree to have more of their content pulled into Flipboard -- entire stories and features with custom layouts -- and see it surrounded by advertising that Flipboard sells. Advertisers participating in the test include Pepsi, Gatorade, Infiniti, The CW, Showtime, Levi's, Dockers, Hilton Worldwide and GE.
For web-only publishers, having their stories pulled into magazine-like iPad ad is a step up from banner advertising on the web. "It does allow non-glossy content providers to get ads that are much more compelling than a traditional web site," said Jonathan Haber, director of Ignition Factory, the unit of OMD that brought advertisers into the deal.
Unlike a traditional magazine ad buy, in which marketers know the title they're buying into and often their ads' position within the issue, Flipboard Pages advertisers will have have little control over which content their ads adjoin. But they will get data back on who is interacting with the ads and what they do with them. "In traditional media, social behaviors are impossible to track," Mr. Haber said. "We will look at the amount of impressions, the interactivity and see how often things are shared."
The company has separately added William R. Hearst III, a partner at investor Kleiner Perkins Caulfield and Byers, as an advisor. Mr. Hearst is on the board of Hearst Corp. -- publisher of the Chronicle, other newspapers and many major magazines --as well as many startups.