Monday, June 22, 2015

'Desktop is the new print' as public goes mobile

Julio Alonso, director general WeblogsSL (James Breiner photo)
BURGOS, Spain -- In 2004, management consultant Julio Alonso got the itch to write about gadgets and technology. He started a blog and a year later that evolved into the website Xataka.

Since then he and his partners have built WeblogsSL, a community of 36 websites in Spanish with more than 13 million unique visitors a month. The sites focus on autos, lifestyle, business, leisure, and technology.

They have survived the global financial crisis, which hit particularly hard in Spain. And they have expanded their websites to Mexico and recently Colombia.

However, Alonso, 45, struggles with what to do about the latest tsunami of change. The audience has flooded to mobile devices and advertisers are going with them. He has more than a decade of experience in the business of digital media, and an international perspective, having studied in Holland and worked in Brazil and Italy, among other places.

Still, he and his team have their doubts. "The question of how we should migrate to mobile is crucial. We have internal debates about whether the mobile users read in the same way as desktop users, if we have to provide the same contents, if the way we slice up the articles should be different. The times when they consume are different. It is not the same to be seated at a desk at work or at home as to be standing on a commuter train looking at a smartphone."

Mobile users tend to consult headlines and short pieces, he says. Desktop users are more likely to read long-form stories. Finding the ideal formats to serve these different consumers "requires constant experimentation," he told me in an interview on the sidelines of the iRedes Iberoamerican Conference on Social Networks in April.

A major trend in the industry, he says, is that "desktop is the new print." By that he means desktop consumption of digital information is suffering the same abandonment by users and advertisers that print suffered. They are going to mobile devices.

The clear message to digital media companies is "mobile first". WeblogsSL is seeing 50 to 75 percent of the traffic to some of its websites coming from mobile. Digital media have to find a way to optimize their sites for that audience.

One problem is measuring mobile traffic. Comscore, an industry standard, does not provide timely statistics on this traffic, according to Alonso. ("Mobile metrics are failing publishers and advertisers")

Much mobile traffic occurs in applications and platforms that are difficult for third parties to measure reliably. According to Comscore, WeblogsSL's monthly audience is 13 million unique users. However, WeblogsSL's internal analytics show a mobile audience of more than 20 million unique users monthly, or 35 millon users in April 2015. At times the disparity causes problems when negotiating rates with advertisers, Alonso says.

A bit of good news, he adds, is that the formats for native advertising, whose content is meant to complement the editorial it accompanies, work better than display advertising on smartphones. "It's easier to move" to mobile formats.

WeblogsSL by the numbers
  • 35 millon users, 2 million more than the year before (ComScore's figure of 13 million does not include mobile users)
  • 6 million euros in annual revenues, 60% from advertising, 40% from editorial services for brands
  • Business is profitable, earnings are reinvested (figures not released)
  • 250 employees and collaborators worldwide, equivalent to 70-80 full-time employees
  • 36 websites, 7 of them focused on Latin America

The team at WeblogsSL struggles with how to serve two different audiences, "the parachutists" and "the regulars", as Alonso describes them (paracaidistas y parroquianos were the words he used in Spanish).

"The regulars are loyal. They make a habit of coming to us and identify with our brands. They are our community -- not our audience, but our community. Parachutists arrive from Facebook or Google and don't know where they are, or they're looking for something they don't find right away, so they leave. It is a challenge to find the right balance between the need to help advertisers reach a large audience and to serve the loyal audience well." And a major strategy is converting those parachutists into regulars.

(Interview with Alonso, in Spanish)


Other challenges

Alonso has been around. He studied law in his native Spain. He got an MBA at Rotterdam School of Management in Holland. He spent 10 years as a business consultant, working in Brazil and Italy among other places. He is fluent in English, Italian, Portuguese, and French. He now maintains an office in Miami, where he makes his home (his bio, in Spanish).

He has the experience and the vision to see a lot of challenges ahead. One is the dependence of digital media organizations on Facebook, Twitter, Google, and other social and search platforms for the distribution of contents to the audience. He calls it a "borrowed" audience because at any moment, it could go away with a change in the display algorithms of these platforms.

Another is the "network effect" that rewards the first movers and biggest players with the lion's share  of advertising. "The top 10 sites get 80 percent," he says, which puts a premium on size and growth. This is one reason he sees expansion beyond Spain into Latin America as a critical long-term survival strategy for his company.

Finally, there is a growing tendency of users to block advertising. The new version of Apple's iOS will allow users of iPhones and iPads to block ads, as Joshua Benton explained in Nieman Lab.  

A strength of WeblogsSL has been its conservative financial strategy, Alonso believes. It finances growth out of its cash flow rather than selling shares or accumulating debt. This means that they might grow slower than others but that they control their own destiny.

"I'm fairly confident in the future of the company. We're growing in reasonable percentages in terms of audience and revenues." Despite the challenges, he describes himself as an optimist by nature. If anyone can figure a way around all these problems, you get the feeling Alonso might be the guy.


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