As Warren Buffett buys into print media, other publishers are going deeper into digital sophistication.

By William Dunkerley

Investor Warren Buffett recently created quite a buzz about his very conspicuous move deeper into print publishing. He's been a longtime owner of the Buffalo News and, along with the Gates family, has been a significant stakeholder in the Washington Post Company.

Warren Buffet's Foray into Newspapers

In the past fifteen months, his company, Berkshire Hathaway, has bought a total of 28 daily newspapers. And he continues to look for more acquisitions. He remarked, "Papers delivering comprehensive and reliable information to tightly bound communities and having a sensible Internet strategy will remain viable for a long time."

According to the New York Times, Buffett told his shareholders four years ago that he "wouldn't buy a newspaper at any price."

The Times went on: "His buying spree started in November 2011, when he struck a deal to buy the Omaha World-Herald Company, his hometown paper, for a reported $200 million. By May 2012, he bought out the chain of newspapers owned by Media General, except for the Tampa Tribune. In recent months, he continued to express his interest in buying more papers 'at appropriate prices -- and that means a very low multiple of current earnings.'"

Many have interpreted Buffett's interests as a much-wanted endorsement of the sustainability of print publishing. And it very well may be.

On the other hand, maybe it is not. It is conceivable that his strategy does not involve buying into print. He may be buying established brands that just happen to be using print. I have no inside track into his thinking. But in the "tightly bound communities" he's talking about, a strong brand can be worth a lot, not only for existing print products, but also for a transition into digital.

We'll follow the development of his print properties. If we see any discernable trends and strategies, we'll analyze them and report back to you.

The Role of Ad Placement

But while Buffett is buying up print properties, digital publishers are discovering that "sections of websites long dismissed as advertising wasteland are actually highly engaging," according to Advertising Age. In its March 18 issue, the magazine described a Web analytics program called Chartbeat. The program allows publishers to track in real time which areas of their websites readers are visiting. A Chartbeat representative claims that "where readers are spending their time is not where we traditionally assumed." Presumably, once publishers know where readers are spending time, they can objectively demonstrate the utility of those areas to advertisers.

Traditional research involving print publications has shown little difference in the effectiveness of an ad no matter where it is placed in an issue. A few exceptions exist, such as for cover 4. Otherwise through-the-book placement is a relatively neutral factor, even when it comes to right- vs. left-hand pages. That research may buck a lot of preconceived notions, but it is nonetheless based on authentic research findings.

There are also preconceived notions about the desirable areas for placing ads. While programs like Chartbeat don't measure ad effectiveness, they can tell where readers are spending time. That may open up new possibilities to sell otherwise undesirable online real estate.

For example, Chartbeat presents a research finding that 66 percent of readers' "engaged time" is spent in what they call "below the fold." By that they mean below the page area displayed in a browser at the top of the page.

To obtain that information, one must measure how long a reader is showing signs of activity in given areas. That is measured by detecting scrolling or the movement of a cursor.

Real-Time Reader Metrics

The existence of this kind of technology can open new vistas for publishers. In the print era, the only way of getting that kind of live data was in focus groups, which presented a means to observe and record what participants read and how long they spent reading.

But if we can now get that data through real-time metrics software, think of the possibilities. We could help advertisers place their ads in areas that are most read by their best prospects, and we could help them to fine-tune their ad message and graphics based on those live metrics.

The bottom line: We'd acquire the ability to help advertisers receive higher paybacks for their advertising dollars. And in turn, that would allow us to command better prices, and to better retain advertisers. That would be a very worthwhile use of the technology!

William Dunkerley is principal of William Dunkerley Publishing Consultants, www.publishinghelp.com.

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In the news: What challenges are digital magazine publishers facing?

Digital publishing and advertising have evolved so rapidly over the last few years that it can seem hard to keep up. In a recent Folio.com interview, Vox Media vice president Joe Purzycki discussed some of the current trends in digital advertising.

In the interview, Purzycki notes a surge in native advertising content (i.e., ads that resemble editorial copy). He also discusses social metrics, the pitfalls of programmatic buying, and mobile advertising. Read the entire interview here.

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Increased Magazine Ad Spending

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New York Magazine and Tablets

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Washington Examiner Shutters Print Edition

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