Editor’s note: Drew Schutte is chief digital officer at Condé Nast, which publishes 18 consumer magazines, including Bon Appétit, The New Yorker, Vanity Fair, Vogue, and Architectural Digest. Condé Nast also publishes four B2B publications, 27 Web sites, and more than 50 mobile apps (for smartphones and tablets), and owns Fairchild Fashion Media. INMA Senior Editor Dawn McMullan interviewed Schutte as part of INMA’s 2013 report, “The Smartphone Choices for Media Companies.”

INMA: What is your company’s smartphone product development strategy? Can you tell me a bit about the history of it, bringing us up to date on where you are today?

Schutte: We place smartphone production into three buckets: Mobile Web, digital editions, and specialty apps. They’re all important to us. When we think about mobile and creating products for mobile, people often say, ‘We’re mobile first’ or ‘We’re doing responsive design.’

At the end of the day, we’re user first. We’re known for creating products of the highest quality. In the digital space, the best product is what’s best for the user and the brand in that space.

If you’ve got a product that’s a lot of text, responsive design may make a lot of sense. If you’ve got a product like Epicurious, a responsive design approach may not make sense because the user on the phone is looking to do something very different. The user wants to look at recipes and create lists — a lot of functionality. Today’s mobile Web can’t give you that, so you’ve got to make an app.

We try to use similar platforms where we can, but in the end, if you don’t make a product compelling to the user, that’s not the best product.  So we choose the platform that creates the best user experience. 

The goal is to provide all access to our subscribers. We believe you should pay us once and have access through any window you open up: our Web site, your tablet, phone, borrowing a friend’s computer in Tokyo.

INMA: How do you prioritise smartphone product development and evaluate opportunities?

Schutte: It’s a combination of market opportunity meets preparedness at a brand. Some combination of the two will help us prioritise. If we have a strong team but the market opportunity is unclear, or a strong team and a clear market opportunity, obviously the latter is what we will do first. 

INMA: What specific smartphone products or services have you launched in the past 12 months and why were they prioritised over other ideas?

Schutte: In the mobile Web space, we upgraded Vanity Fair and Glamour. When we do these upgrades, we are seeing an uptick in traffic of 30% to 148%, so it is really, really worth it. We’ve also launched a Teen Vogue game [Teen Vogue Me Girl] that has over 2.5 million downloads. Teen girls and gaming go hand in hand. This app has advertising sponsorships and virtual goods, which we think will grow over time. 

We’ve launched two digital editions for the smartphone, for The New Yorker and Vanity Fair. They are reading products, showing our propensity for reading on the smartphone, and we’ve seen traffic increase. That gave us the confidence to say, ‘What could a 3-inch digital edition look like?’ A digital edition on the tablet is fantastic. On the phone, it’s a new thing. The engagement metrics on The New Yorker are terrific. It’s too early to tell on Vanity Fair

INMA: What have been the most successful smartphone products and how do you define success?

Schutte: Most successful smartphone products to date are mobile-Web optimised. Why? Because the traffic is the largest and because advertisers are paying to be there.

We spent a lot of time over the last two years, mainly in 2012, getting all of our mobile platforms where we thought they should be. By that I mean the advertising units are compelling and take advantage of the native functionality of the smartphone. 

Once we made it so all of our optimised sites could take rich media, we partnered with AdMarvel because they work with the largest number of ad creative partners. Then we introduced new ad positions onto the phone in more strategic ways, whether traditional or native advertising.

We’ve created custom units, like one called the C3. The “C” stands for content, conversation, and commerce. It’s an easy unit that people can either build for themselves, or give us the assets and we can build content for them. We build their messaging around their content, which is easy for social sharing. 

We are presently moving to DFPP [Dart For Publishers Premium], which will give us more of the targeting and measurement capabilities we have been looking for on the phone.

We’re finding that we’ve got to make it easy for people. New assets are often a headache because they’ve got to be custom created for a mew medium everybody hasn’t thought through. While mobile revenue is growing rapidly, I think it will really take off when you hit that kind of critical mass where people know what they’re doing and why, and there are easily proven standard offerings.

Advertisers presently have many places they can message for branding and direct response. What’s compelling and unique about branding on a phone? We are seeing many of them figuring that out and, as a result, expect an increase in branding revenue this year.

INMA: What have been the least successful smartphone products?

Schutte: What hasn’t worked are quick apps that are made for an event or programme. They don’t get as much traction as we’d like. They’re not worth the effort and don’t get the scale that you or the advertiser were expecting. We did a lot of that in 2012, and we pulled back from it.

You need an app people are going to use every day. Epicurious has lots of useful daily information and as a result has 9 million users.

The challenge is you’ve got to figure out what is appropriate for your brand to do on the smartphone. What does it mean when you move into geo-location and accelerometer on the phone? This phone is a computer and a really powerful one. You can ask it for data, and it knows where you are.

That’s where you’re going to win. Provide users something of value. It gets more exciting every day. 

INMA: What is your company’s over-arching smartphone monetisation strategy? 

Schutte: Ad revenue, consumer revenue, and e-commerce — in that order.

INMA: What is your outlook for mobile Web and mobile apps for smartphones as a source of revenue? 

Schutte: It will grow quickly as a source of revenue and will equal desktop revenue by 2016.

INMA: What are people paying for, and what are people not paying for?

Schutte: People are paying for digital editions, and we believe more will pay for “all access” to a brand as we move forward.

INMA: What smartphone trends are you looking at that might impact your company’s strategic approach in this space? 

Schutte: We will be watching behaviour. It will dictate what kind of products we create. Location behaviour — what is useful, what is annoying or creepy. Video consumption: Does it continue its meteoric rise on mobile or flatten out? E-commerce: Growth on the phone may make it more compelling than on the desktop, especially if one-touch payment takes off.

This is one of 17 case studies featured in the recent INMA strategic report “The Smartphone Choices for Media Companies.” For more information on this report, free to INMA members, click here