Revisiting the Value of Digital Editions to Advertisers
Written by Matt Clement
Digital editions, they’ve been around for well over 15 years now and have played a major role in taking publications into the digital era. Unfortunately, many publishers have placed them in a box as a tool without value to advertisers. Here at Nxtbook Media, we work with content creators day in and day out who currently rely on advertising sales through digital editions in order to drive solid business models. In an era where highly targeted marketing to specific audiences, brand safety, immunity to ad blockers, and sponsored content are essential pieces of quality advertising, it seems digital editions provide a reliable channel that meets all these needs for brands and agencies.
In order to garner a specific value of this medium, we asked current clients to anonymously indicate their digital edition circulation as well as the amount they charge for quarter-page, half-page, and full-page advertisements solely in their digital editions. We then took this data and broke down the value of these three sizes of ads into CPM (cost per thousand impressions). The analysis produced the following average CPM rates:
¼ page: $13.50
½ page: $23.68
Full page: $50.41
We then sought to demonstrate the ROI of digital editions among a randomly selected group of B2B, B2C, travel, association, and technical journal publications in our nxtbook4 and PageRaft platforms. In order to get to this ROI figure we applied the following calculation to each size ad (¼ page, ½ page, and full page):
Ad revenue for a certain ad size = (Number of times ad size occurred in publication) x (Digital edition circulation/1000) x (Average CPM rate for respective ad size)
We then added up the ad revenue for each ad size in order to get a total ad revenue per publication figure. Costs were calculated based on the average digital edition production costs for the randomly selected publication. ROI was then calculated with the standard equation:
ROI = (Digital Edition Ad Revenue-Digital Edition Production Costs) / (Digital Edition Production Costs)
You can see an outlay of the ROI figures in the bar chart below:
The numbers are quite astonishing, as the publication with the lowest ROI, a very advertising-lite technical journal, is still receiving $4.68 in return for every dollar spent on the production of a digital edition. Fascinatingly for the randomly selected, and advertising heavy B2B publisher, it is projected that for every dollar put towards creating a digital edition of their magazine, the company will generate $130.73. Granted, these numbers only take into account the production costs and leave out other expenses – such as overhead and advertising sales costs – but that does not deflect from the fact that even a singular digital edition is still a worthwhile venture by ROI standards regardless of the audience you are targeting.
Many media companies exhaust both their minds and their budgets perfecting print and website media. It is typical for publishers to utilize these two media platforms and miss out on a key channel that should be implemented in order to maximize growth and ROI. The data would ask that those media companies at least reanalyze the perceived value.
ROI on advertising is only part of the financial story though when it comes to digital editions. That said, in this series reexamining the value of digital editions, we’ll next examine the savings that could be gained through moving percentages of your audience from a print subscription to a digital one. Additionally, we will examine the four advantages of advertising in a digital edition that are currently attractive for brands and agencies.
About Nxtbook Media: We produce two types of digital editions, our legacy page-turning style solution, nxtbook4 and our new responsive platform, PageRaft. If you would like to chat with us about your publishing strategy feel free to reach out on our Get Started Form.