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As We Start Doing Everything With Smartphones, Will Publishers Find Room?

Privacy Issues Loom Larger as Phones Becomes Personal Extensions

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Magazine and newspapers will face some stark difficulties as consumers turn ever more often to their smartphones, leading publishers and editors said in London on Thursday during a panel on the final day of Advertising Week Europe.

"The smartphone is so connected to you as a person, and everyone's got their favorite apps, so the challenge for us as media owners is to have ownership inside that space, and to make sure that you're one of the things consumers want to look at," said Kerin O'Connor, CEO of The Week. "When you're bored, do you want to play Angry Birds or read the Economist?"

Mobile media, however, is simultaneously opening vast new pathways to consumers, argued John Micklethwait, editor-in-chief of The Economist. The problem so far is the ad experience, with small screens allowing only very small ads.

"It's possible that the economics are being turned upside down -- not just advertising, but also circulation," Mr. Micklethwait said. "You can now reach hundreds of thousands of people at very little extra marginal cost through digital devices. It's highly possible that more people will rely less on advertising across the media industry as a whole."

Mr. O'Connor predicted that mobile advertising will become a much richer experience for consumers as brands begin to find ways to be useful and supply services that engage readers in a more personal way. "In a magazine we have 150 pages, but you don't have that many opportunities on a smartphone to construct a meaningful relationship," he said. "You'll be able to go to five or six clients and offer something that really works through deeper integration."

Gideon Spanier, a media columnist at the Evening Standard, warned that marketers don't need to rely on publishers for content. "Media brands have no monopoly on being able to put out content," he said. "If [branded content] is good enough, it's a strong challenge. The opportunity for advertisers to create content is colossal and it's very difficult for those of us in pure editorial to compete, because frankly advertisers can spend a lot of money on it. If the quality is good, a lot of consumers are satisfied with that."

It may not be quite so simple, countered Rupert Turnbull, publisher of Wired in the U.K. "I'm not convinced it's as easy as all that to create content and deliver it," he said. 'Not everybody can do it well. If you ask people to give examples, everyone says Red Bull and then trails off."

The uncertainty ahead, thrown up by the economy and rapidly evolving technology, also includes opportunity for publishers, the panelists said. "Optimism is just a way of living," said Allison Arden, publisher of Advertising Age, calling it "how we operate."

Asked what the hot issues will be a year from now, Mr. O'Connor said the speed of development in mobile "will lead to massive privacy issues over the way tech companies want to invade the personal space of the individual." The issue will be highlighted, he said, as phones "become more and more a personal extension of your body space -- we'll be walking around using phones to buy everything and activating them to get train tickets. It will become very fluid from a commerce point of view."

That connectedness won't stop with mobile phones, Mr. Turnbull said. "Next year the sensors will come out of the phones and they'll be everywhere," he said. " You'll be able to put a sensor on your dog, your keys, your children, and never lose them again. How that affects the advertising industry, I don't know."

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