The Social Media and Magazine Divide
In a Q&A with AD, L2's Colin Gilbert discusses how his firm's Digital IQ Index shows just how many magazines are not taking advantage of social media or are simply using it incorrectly.
BY T. J. RAPHAEL
During the 2011 American Magazine Conference, New York University Professor Scott Galloway took the stage and captivated the industry with his stark tone and scolding demeanor toward the magazine industry. The professor told the audience that magazines were doing themselves a disservice by not taking advantage of social media, and particularly Facebook, in a way that worked to serve their interests.
Galloway, founder of the L2 Think Tank, which measures brand digital competence against other industry peers, invented the Digital IQ Index as a tool that scores brands on over 100 quantitative and qualitative data points, diagnosing their digital strengths and weaknesses. Here, AD checks in with Colin Gilbert, the research lead for L2's study of 87 magazine brands released this past summer.
Audience Development [AD]: Can you talk about your think tank L2 and how it functions within the magazine publishing industry?
Colin Gilbert: L2 has a very simple business model, we do three things and the first includes research, which comes in the form of the Digital IQ Index that is based on the methodology of our founder and NYU Professor Scott Galloway and a student of his, Maureen Mullen, who now leads our research advisory practice.
We release these Digital IQ Indexes that are focused on a particular industry vertical. It actually started out with prestige and luxury brands two years ago while, in the midst of all these marketing budgets being slashed, they were very fixated on social media, their digital footprint and trying to maximize what became a very high return on investment when they couldn't invest in a lot of the traditional modes of marketing.
We take between 50 and 100 brands within a discreet vertical and we examine their digital footprint across four distinct dimensions-sight, digital marketing, social media and mobile. Collectively, these four dimensions make up about 450 individual data points and we index the output toward the average brand in the index at 100 points and then we look at the dispersion and essentially group them into four classifications that are traced back to the Stamford IQ Test, which ranges from genius brands all the way down to feeble brands. People don't always like those labels, but we feel that they're much more accessible than terms from statistics and econo-metrics to describe someone's performance.
For the first time this year we started studying the magazine industry-collectively, we actually look at 10 verticals and over 800 brands and this year we looked at 87 brands from within the magazine industry. We ranked them for the first time and we're going to continue to do this, now on an annual basis with the second release targeted for June or July of next year.
AD: When looking at the Digital IQ Index, what does it reveal when examining the magazine industry? Can you talk about "digital health?"
Gilbert: Overall, we found the majority of magazines relative to one another, which is a critical distinction, performed above average as an independent group. There was a big clustering in what we called the "gifted" category, but very few brands were able to break away from that pack and achieve genius level, with the exception of one brand, which was TIME.
What this demonstrated for us is that, because of how the magazine industry is organized and because of the power of a large portfolio company-whether Condé Nast, Time Inc. or Hearst, they can essentially identify the best digital practices among 10 to 13 individual publications and spread that within that family of brands or titles within their company, something we observed as template-ized design.
Basically, whether you're talking about a Web site, social media page or mobile application, the brands are defining the box in which the magazine titles can play in and content has to fit within these parameters. Generally, when we're going through the checklist of things we're looking for, a lot of them meet the basic criteria but very few diverge from that template in innovative ways that are looking ahead to changing that formula that persists across the industry at large. I think this observation is very germane to social media in particular, where we don't see a lot of people breaking away from the average.
Something Scott presented at AMC when he spoke was looking at how many Facebook and Twitter populations these brands have cultivated when compared to their subscriber base, which is in the public domain. We found basically no correlation between the two dynamics.
AD: Can you compare what the magazine industry is doing on social media platforms when looking at other kinds of media?
Gilbert: The only time we do statistical cross-industry comparisons is in quarterly reports called the Prestige 100. That's the only time we do those comparisons. When groups get to the top of our indexes, they typically don't care how they're performing relative to that field because they are essentially best in class. They want to know how they're doing when compared to other industries, like how a fashion brand is comparing to an auto brand.
The same brands that magazines depend on for advertising revenue are now equipped with a suite of social media tools and assets by which they can directly engage in marketing campaigns with customers and have a one-on-one conversation. This kind of turns the traditional business model on its head. What we're seeing in the last few years since about 2008 and 2009 is brands really starting to embrace Facebook pages, like Burberry-they have rocketed out in front of other brands that traditionally owned that space, accumulating over 9 million individual fans.
The highest numbers in the magazine space are hovering around two million fans or less-there's a handful of publications that are actually executing that. What are other industries doing that magazines aren't? It comes down to the basics.
If you look at Facebook, we believe a few things are critically important: Growth rate and then level of engagement. This is something a lot of people don't measure. Levels of engagement are defined as relative to the size of the community you have. When you post content on any of these platforms, what percentage of the community are clicking like? How many are commenting or taking another action? There are controls for discrepancies and distinctions between a Facebook fan base of 100,000 people and 10 million people.
We find that for the level of engagement, there needs to be very creative, original and frequently refreshed social programming. A lot of people are under performing in this space within the magazine industry. There are six basic things that need to be done, with three being on Facebook-the first is soliciting user-generated content. Only about 13 percent of brands that we surveyed are doing that outside of the walls, they're not soliciting user generated photos or soliciting anything that goes into a user generated tab. People started asking readers to vote for the sexiest man alive on Facebook-taking a lot of legacy content and adapting it to these communities-many magazines aren't doing this very well.
About 22 percent of magazine brands are building interactive Facebook apps or custom tabs; most are doing nothing beyond the basics. Most critically, they're not like gating their Facebook tabs-only 26 percent of magazine brands are doing this. This means when you offer a visitor the chance to like your brand page, you're not giving the visitor any incentives or rewards for doing so. People are very sensitive in sharing personally identifiable information and engaging in that transaction unless they get something out of it-fan exclusive content, a reward, promotion or access to something no one else gets. Those are some of the things magazines are doing poorly.
On Twitter, overall, I think magazine brands are doing better there to a certain degree because it suits magazines with the rate of content refresh, and many people use Twitter to substitute as an RSS feed or news update program. A lot of magazines also fall into the trap of announcement links or promotions across every platform instead of trying to account for what the user behavior mentality is on a specific platform and then trying to adapt accordingly. It's about engaging in a unique dialogue with followers to make the content more personal to individual situations.
We look through the things magazines are not doing on Twitter which are as follows: Only 36 percent of magazine brands are promoting online events, only 40 percent are actively Tweeting links to articles and using network effects to make sure that when you put something on your Web site that it starts spreading around the wider Internet and blogosphere.
Only about 63 percent of magazine brands reply to their followers, which is shocking. They are not taking into account that their followers are their most important assets. Roughly one-third of magazine brands are not engaging in those types of conversations and are treating this as a broadcast platform instead of a platform for dialogue.
AD: Why is social media important for advertising?
Gilbert: It's going to change the dynamic. I'm not going to say that, for example, what Burberry is able to achieve with its fans on Facebook is a substitute for the type of promotion or visibility they're trying to gain in magazines. They're very different worlds and we've seen that they're complimentary and not competing strategies.
However, as we go farther into the future, marketing managers are going to be taking a close look at ROI and because subscription and single issue newsstand sales at kiosks are flat or declining and the Facebook populations are rising at double-digit growth rates on a very accelerated time frame, and with the potential introduction with F-Commerce, or the ability to purchase items your friends recommend on Facebook, I think they're going to be taking a very close look at where they are getting the most bang for their buck.
This also puts pressure on magazines when potential advertisers come to them and say what are you doing online, what are you doing with your Facebook page and how can I get involved in that in a fresh or compelling way beyond what we've been doing year over year in the magazine pages?