Scott Pellicone, VP, Digital Publishing, Quebecor World, Magazine Business

That represents a sea change. Whereas before, it was, “We go to the magazine first and then we have the web as an afterthought.” Now because the web is so immediate, you go there first and then print now is following. Do you see that happening?

SP: Absolutely. In fact, one of the things that we’ve done here at QW — specific to the digital publishing business — is to publish with Texterity. We felt that…

MM: Texerity is an XML database provider. Right?

SP: Yes, Texterity is a best in class provider of digital editions. Texterity manages the entire electronic supply chain as they do the conversion, host the content, market the content, populate and optimize the search engines and capture the analytic data as well.

Although, the electronic edition is not a replacement for the printed version, it does provide customer value in the form of a more interactive up to date extension of the original printed version.

MM: Actually, Scott — one of the things we’ve found in talking to publishers and going through really their brand strategy — and therefore, a segmentation strategy…. We found that they actually have two separate, and to some degrees highly overlapping, and in some cases not… readerships of an online versus a print. There seems to be, “I only read online,” group. Then there’s another group that, “I only read published work.” Then there’s a group that reads both, or either/and.

That creates an interesting brand strategy, and an advertising sponsorship. Because you’re attracting different readers to different properties online or print.

SP: Yes. I would agree with that. I think the younger audiences will opt more into reading the publication on their mobile device or online. Also, their viewing patterns will be quite different than say their parents or grand parents.

Everyone’s viewing patterns are different. Maybe someone in our generation that commutes will read a magazine on the train. A younger generation may be reading the magazine in front of the computer or in front of the television set. Then an even younger generation may be reading it on their mobile device.

I think the point that I am trying to make is that there should be a very logical balance as to the content that comes in the printed edition and the content that comes in the electronic edition. They should supplement one another. One should work for the other. It’s almost how the internet is not a business, but it’s a great facilitator for a brick-and-mortar business.

Service industries on the internet have a very difficult time generating revenue while retailers have been quite successful selling hard goods via ecommerce. I think there are lots of synergies between the printed edition and the electronic edition.

For example, if you’re a monthly magazine, your content basically expires after one week. Additional news breaking content can be supplemented through a digital edition or via the publishers website. Then you can tie the two together.

The other part is the ROI. The way that magazine publishers capture ROI through the printed book isn’t very good. The electronic edition is an excellent facilitator to capture ROI for your advertisers, because you can track eyeballs. Who looked at the book, when they looked at it, how much time they spent on a page, how many pages they viewed, where they came from and where they went.

MM: That gets to another key point, Scott, in the larger framework of the value chain. The value chain not only moves goods and services from points of raw materials and/or creation to ultimate consumption and disposal. But it also generates additional flows of information.

Flows of information like “Who did what?” kind of activity information. There’s also transaction information, in terms of who bought what, at what price and at what time of day. All that kind of stuff.

There’s also this data stream that is, “Who are you and what are you interested in?” Part of an overall digital supply chain strategy really emphasizes what we could call a business process or a business intelligence data stream.

So you’re getting into that in terms of how magazines unlock additional value from their core assets as a function of providing better intelligence back to their advertisers.

SP: Absolutely.

MM: How does Quebecor participate in creating or enhancing that feedback loop?

SP: That’s a great question.

MM: Either now or on the road back?

SP: Our vision is to basically to continue to build this digital logistics business that will basically encompass everything that we spoke about. The data mining and the interactive marketing. The web-to-print. The social networking. The micro-sites and all that.

In the meantime, these things cannot be developed overnight. So we look for key best-in-class vendor/partners to assist us, and integrate them into our value chain. It’s not a brokerage. It’s not where we broker a deal. It’s all about a strategic alliance whereby both companies partner to deliver value to the customer.

Our value is the convergence or the synergies created through the printing process. Where we have the files, or have helped to create these files. Further, the DAM and the content management component really helps us serve up and integrate the content into these other different value chains, including the web, direct mail and marketing, and even into television.

Eventually the internet is going to become more and more like broadcast television. You’ll have different free wireless networks. The Google and MSN and Yahoo wireless networks that will capture your IP address and be able to serve up ads based on analytics. Based on traffic behaviors and things like that.

There are lots of things that are going to happen in the future. That’s why we’re trying to get into the e-publishing business right now. Also, the printing business is actually on a steady decline. It was based on so many different factors. People are greener, the high price of fossil fuels, postage, paper as well as alternative media channels such as TV, the internet and mobile devices.

MM: And the people under 30 prefer to read it online as opposed to in print.

SP: Yes. Our generation is fixated on instant gratification. When we want something, we must have it immediately.

Nevertheless, we try to use our digital solutions appropriately based on the customers market vertical. For Business to Business magazines, where the information typically does not expire, the digital edition is quite valuable. For example, if you are a collector and are researching a particular 1957 Chevy, having the ability to flip through a stack of relevant magazine archives is very valuable. In fact, publisher can identify a new revenue stream by electronically publishing their archives.

MM: You just touched on it, and I think it could actually be another hour. We don’t have another hour, but it could be. That’s the whole thing on analytics. One of the great strengths of a robust, mature DAM as a service platform is that you’ve got all this asset activity and user activity data. Right? That’s all in the DAM. In terms of usage journals.

SP: Yes.

MM: One of the things that we’ve seen that’s been very powerful — especially from a service provider such as a Quebecor — is to take that activity data and to start to really mine it and organize it. Then going back to the client and saying, “Here. Let’s look and see what the data says.” Right?

Whether it’s a process-efficiency benchmark or usage-scorecards and such. Can you speak to that a little bit in terms of the kinds of things that clients are using and the kinds of things that you see emerging as clients become more sophisticated, analytic consumers?

SP: It’s all about targeting. It’s all about becoming one-to-one with your audience. I think cataloguers and publishers do it very well. Trying to report on the readers’ engagement with the brand, and then using that information to make educated decisions on future prospects. It’s about making decisions based on fact and not intuition.

We’re seeing that it increases the readers’ engagement by linking the readership to advertising and content that is relevant to what they’re looking for.

I think in a perfect world, the vision for the future would be something that’s dynamic. Where you’re looking at an electronic edition of a magazine, and as you’re reading the magazine and you’re looking at certain stories, the advertising will be served up based on your engagement with the content. This would be the pinnacle of target marketing.