Bringing FSI’s to Mobile: Newspaper venture Wanderful Media receives US$ 15 million funding
What: Major newspaper companies are funding a new US $14.5 million round of investment into Wanderful Media. A service that digitizes and distributes the millions of preprints (FSIs) that go out every weekend in local papers across the United States.
Why it matters: Pre-print (FSI) advertising in newspapers is mostly declining and newspapers are trying to control and influence the mobile shopping experience.
Major newspaper companies are investing another US $14.5 million into Wanderful Media, to bring circulars (also caled Free standing inserts or FSI's which the advertising inserts with coupons from local retailers) to mobile devices.
This new financing raises Wanderful’s total funding to over US $50 million from investors including Advance Digital, A. H. Belo Corporation, Community Newspaper Holdings Inc., Cox Media Group, The E. W. Scripps Company, Gannett Co., Inc., GateHouse Media, Inc., Graham Holdings Co., Hearst Corporation, Lee Enterprises, MediaNews Group and The McClatchy Company. It also overlaps with the launch of Wanderful’s Find&Save app for android devices.
Since its launch, the Calif.-based company, which was formed with a US $22 million investment in 2012, has generated less than US $10 million in revenue.“We’re the shopping portion of every large newspaper in the country. If the web was going to reinvent retail shopping it would have happened in 2001 and 2002. We needed to go hard toward mobile and tablet,” chief executive Ben Smith says.
If the web was going to reinvent retail shopping it would have happened in 2001 and 2002. We needed to go hard toward mobile and tablet.
“We made a decision last year of really making a bet on the iPhone and Android platforms and bringing this content to people based on where they’re at,” he added.
Wanderful sustains advertising relationships with national retailers, but relies on regional newspapers to manage relationships with local and regional retailers, according to Smith. In addition to its availability on android devices, the company is rolling out new features and launching location-based services for both android and iOS devices.
Big media companies have realized that newspapers no longer control the shopping experience or the car buying experience.
There are other sites and apps,which have been launched in order to improve on local sales and discounts. Coupons.com, for instance, went public with its online coupon and discount service. Sequoia Capital has backed Shopular , which is pitching a similar application for consumers.
Pre-print Advertising has declined but less than overall Newspaper Advertising
The local media industry has seen circular revenues decline over the past decade, but at slower rates than other ad products. According to data from Borrell Associates, local media companies will generate $6.24 billion in revenue from advertising circulars in 2014, a little shy of a quarter off of its peak in 2006. However, overall advertising revenues have halved over the same period, largely due to much sharper declines in classifieds.
Expertes attribute the softer declines in circular revenue to the relative strength of media as a discovery mechanism, and the comparative weakness of a newspaper as a search tool. They argue that the experience of flipping through a physical newspaper still beats the web experience in terms of finding and discovering new goods.