iPad Magazine Ads and subscription pricing coming into focus – WSJ.com
Magazines Use the iPad as Their New Barker
By SHIRA OVIDE And SUZANNE VRANICA
A laundry list of open questions about Apple’s iPad isn’t keeping magazine publishers and advertisers from lining up for the launch of the tablet computer next week.
Time magazine has signed up Unilever, Toyota Motor , Fidelity Investments and at least three others for marketing agreements priced at about $200,000 apiece for a single ad spot in each of the first eight issues of the magazine’s iPad edition, according to people familiar with the matter.
A prototype Best Buy ad on an iPad tosses in a camera flash along with the standard product information.
At Condé Nast Publications, Wired magazine is offering different levels of ad functionality depending on how many pages of ads a marketer buys, according to a person familiar with the matter. Advertisers that agree to buy eight pages of ads in a single issue of Wired magazine will be able to lace video and other extra features through the iPad version, say people familiar with the matter.
Magazines largely are planning downloadable iPad applications that are near-replicas of the stories in the print versions, but they are demonstrating the new-media bells and whistles for advertisers: add-ons like videos, social-networking tools and navigation that take advantage of the large screen, touch technology and Internet connections of the tablet computer.
Time Inc.’s Sport Illustrated has been showing advertisers three video-heavy ad prototypes, including one for a Ford Mustang that includes an arcade-style driving game using the tilt-and-turn capability of the iPad. With a few touches to the screen, readers can pick paint colors and wheel styles for cars they might want to buy.
"Some of the things you can do are just mind blowing," says Steve Pacheco, FedEx’s director of advertising. "You are taking something that used to be flat on a page and making it interactive and have it jump off the page."
Magazine publishers see the device as crucial to their future as they scour for new ways to make money, with print advertising still under threat. Digital advertising has been a disappointment for many publishers, but with the iPad they feel they have a technology that best marries the splashy look and size of a full-page print ad with the cool interactive features of a digital ad—and the ability to count how many people saw it.
But the business model is unproven, and ad dollars will initially be a fraction of the industry’s overall revenue. Hype over the iPad unveiling two months ago focused on selling subscriptions for the device, but no major magazines appear ready to do so yet, according to people familiar with the matter. That leaves titles like Time and People, Men’s Health and Hearst Corp.’s Esquire to offer weekly or monthly iPad editions of their magazines, priced at or near the cover price of a print issue.
In part because of the limited number of marquee ad spots, many magazines have sold out of ads for their maiden iPad issues—nevermind that most publishers and marketers haven’t even finished designing the apps and ads and that it’s unknown how many people will buy iPads.
Through a marketing deal with Procter & Gamble’s Gillette brand that was brokered by Publicis Groupe’s Starcom MediaVest, Rodale’s Men’s Health magazine will offer iPad users 10 free pages of its April and May iPad editions. Gillette Odor Shield products will be the lone advertiser on what Rodale executives are calling the "preview issue" of Men’s Health for the iPad. Those who choose to download the full iPad issue will pay the $4.99 Men’s Health newsstand price.
Some media buyers are grumbling about the high ad prices and about some publishers requiring advertisers to buy pages in its magazines in order to be included as an iPad advertiser.
Esquire, whose iPad plans are furthest ahead in the Hearst magazine stable, is leaning toward a downloadable issue without advertisements for now, priced at $2.99, or $2 less than the physical magazine’s cover price.
As in the early days of the iPhone, advertisers and publishers will be tinkering with new ad ideas, knowing early successes and missteps can help determine what people respond to best.
Esquire isn’t ready with its tablet plans for April 3, but it plans later next month to sell an iPad version of its April issue that is expected to include music videos from five singer-songwriters tapped to create original songs, each containing the phrase "somewhere in Mississippi," according to a person familiar with the matter.
Apple has only just begun accepting companies’ submissions for iPad apps, and they won’t be available unless Apple blesses them. Apple declined to comment beyond saying, "We are excited to get the iPad into customers’ hands on April 3."
It’s unclear how many iPad magazine editions will be for sale when the tablet launches. It appears none of the biggest magazine publishers in the U.S. have been allowed to use actual iPad devices to test their applications before launch, relying instead on Apple-supplied simulators.
By contrast, The Wall Street Journal and the New York Times are working with test iPads, according to people familiar with the matter. Six advertisers, including Coca-Cola and FedEx, have agreed to advertise with the Journal, and a four-month ad package costs $400,000, according to these people. Coke and FedEx declined to comment on terms. The Journal plans to charge subscribers $17.99 a month for iPad subscriptions, according to a person familiar with the matter.
—Russell Adams contributed to this article.