Brandon Grosvenor, senior vice president for sales at Postmedia Network, sees smartphone products as different than any other product with which a media company deals. 

The largest news publisher in Canada went all in with the smartphone across its product line in 2011 on brands such as the National Post, The Vancouver Sun, The Province, Calgary Herald, Edmonton Journal, and Canada.com.

Postmedia Network launched iPhone apps in 2012, native apps across key platforms. While its titles do not offer purely smartphone-only or tablet-only subscription options now, they will in the future. 

Postmedia Network’s first smartphone strategy was just to get out there. The rollout was similar at most of the titles because metropolitan audiences, which make up most of their titles, are similar regardless of city.

The differences were The Province, a daily tabloid in Vancouver that skews young, focusing on entertainment and sports, and the National Post, a more conservative, high-end newspaper with a financial focus and a national audience. 

“We knew that’s where the audience was going, so we optimised our sites for mobile completely across the board,” Grosvenor explains. “It was a firehouse mentality to be wherever audiences are. It was a rudimentary strategy, but we saw 50% of traffic coming in from mobile almost right away.

“Revenues are growing. We saw monetisation opportunities once we launched the iPhone apps, 100% month-over-month, year-over-year. It’s been a really strong platform for us. Certainly in terms of total revenue, it’s the tip of the iceberg. But we have significant growth plans against the smartphone.” 

Postmedia Network has moved from the firehouse approach to the lifecycle-management approach, evolving existing products in logical ways. 

“We expect to use audience-based data to really lend itself to how we build on our products,” Grosvenor says. “Each of our products will need to contribute in a healthy and material way to the larger portfolio. Whenever a need arises — build an app or another product — we need a succinct P&L if we’re going to spend time and money.

“The end result is an ecosystem that delivers content in ways that surprise and delight everybody, which dovetails into advertising solutions that help monetise our audiences and drive our partners.” 

And that audience, while all in love with their smartphone, varies — vastly. Grosvenor uses his father and sister as examples. His father, for example, never surfs the Internet on his smartphone. His sister does.

“It’s very misleading when we try and bucket smartphone audiences,” Grosvenor says. “From our standpoint, the opportunity lies in penetration. The latest smartphone stats show penetration is over 45% in Canada. No one makes phones that aren’t smartphones anymore.

“That 45% is going to be 80% by the end of 2016. There are 14 million people in Canada that have smartphones, and 50% of people are doing the majority of their search now on a handheld device. As of June, time spent is higher on a smartphone than on the Web. We are positioning for the future.”

Today, more than half of Postmedia Network’s audiences come in via smartphone. Research shows 12% of all media consumption is done on a mobile device, yet such platforms are bringing in just 1.5% of ad revenue: “Where do you think the next opportunity is? We are way under-indexed. It’s unbelievable.”

Important to Postmedia Network’s strategy is being multi-platform and considering how these platforms interact. What are consumers doing on their smartphones that they are not doing on a tablet or on the Web?

Postmedia is more focused on audience than product, Grosvenor says. For example, a new car preview app can be tied to an auto show in Vancouver, as well as to a ski and snow report app.

But many of these are one-offs and finite. That’s not where Postmedia Network is going, so it created Postmedia Labs. As Grosvenor describes it: “It’s entrepreneurial. Get the smartest people in the room together and don’t pin them down with the overwhelming cost structure of our beast organisation.”

Out of that came audience-driven apps, such as gastropost, a social gathering of food lovers in Toronto.

Another audience-based, no-time-limit app is Hockey Inside/Out, which started in Montreal and was so successful, Postmedia Network scaled it nationally.

“These are extensions that make sense to us,” Grosvenor says. “We’re getting our core products and seeing spin-offs that have revenue opportunities. Our product-build strategy is really against where the audience is rather than what the idea du jour is.

“The great thing about being in the digital age is now we can see what content people are going to, what content people are consuming, and that should be a road map for whatever we do.” 

The least successful smartphone attempts are the ones that do not fit into Postmedia Network’s core competency. If a Postmedia publication isn’t already the leader or authority in the field in which the product is being developed, it hasn’t worked. 

“Key is having the courage to say we’re going to position our smartphone apps for the 18- to 35-year-old demographic and really stay true to that,” Grosvenor says. “The 35- to 45-year-olds are the super-users of the tablet. The paper products are the 45+ strategy. You’re differentiating content in the way you’re submitting that content to the end user.”

Postmedia Network brings in a huge percentage of its revenue from large national advertisers. Interestingly, those large, national advertisers are still trying to figure out how to use smartphones to their advantage. Local advertisers seem to be on a faster learning curve with the platform. 

“Local advertisers can target messages locally, cut through the clutter,” Grosvenor explains. “What we’re finding is when you create an action — click-to-call, tap-to-map — click-through rates go up.

“New revenue streams we’d priced out of the market with print, like restaurant chains and one-off festivals, smartphones allow you to geo-fence. Those audiences seem receptive to very targeted ad messages. Locally, the smartphone is a saviour. Ad revenue has increased almost 100%.” 

Nationally, the strategy is much different, not as granular unless a national advertiser is sponsoring an app.

Postmedia Network is banking its digital budget on the relevance of the smartphone and its adoption rate, keeping in mind that 80% of Canadian customers will own smartphones within three years.

“What we don’t do is go out and sell smartphones. We don’t go out and sell our apps or our m-dots,” Grosvenor says. “We sell the total audience. The real strategy is to target the high-performing categories we enjoy currently.

“For example, if you’re Jean’s Retailer, targeting women 18 to 35, we’re going to put a significant amount of focus on the smartphone rather than pumping the print edition.”

Smartphones can round out a strong integrated campaign, creating click-through rates that are much stronger than Web campaigns. They also are an easy add-on that can bring in significant traffic for an advertiser.

“It is an intense relationship that people have with their phones and the apps and sites they visit,” Grosvenor says. “We really have to make sure we understand what people are willing to engage with and not kill the goose by introducing completely intrusive and non-user-friendly ad units that ruin the user experience.

“If we believe engagement is the new currency in which we’re trading, smartphones probably give us the best opportunities we have.”

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