As media moves from traditional forms to digital, it disrupts lots of brands. Publishers Clearing House doesn’t want to be a victim of this, so the sweepstakes marketing company is spreading out into the digital realm with new mobile apps and games. And don’t be surprised if it makes some acquisitions in that sector.
Many in the U.S. knows the Publishers Clearing House Brand as the marketing company that sponsors sweepstakes with a huge grand prize of $7,000 per week for the life of the winner. The company has given out more than $250 million to date. It gives out a prize every five to 10 minutes on its network, and one six-week contest earlier this year drew 123 million entries. Its main business is to offer consumers magazine subscriptions and other items. That’s the legacy business, and now the company wants to do more to develop its future businesses in mobile and games.
It thinks of apps as the new magazines.
“Mobile is of great interest to us,” said Andy Goldberg, the chief executive of PCH, in an exclusive interview with GamesBeat. “And we see a big synergy of casual mobile games and sweepstakes.”
The challenge is that PCH wants to be a disruptor, not the disruptee. Publishers Clearing House governs its approach to extending into mobile by focusing on what it is good at. It is, for instance, combining digital social casino games with some kind of sweepstakes activity. That is similar to how rival Real Networks moved to improve engagement by combining sweepstakes with its social casino games last year.
PCH will also dive deeper into mobile apps and games through acquisitions. The company has hired Mark Cullinane, previously a corporate development executive at casual game company GSN, as vice president and general manager of PCH’s digital team. Part of his job is to expand into new digital businesses such as games.
“We want to raise the visibility of what we are doing,” Cullinane said in an interview. “We’ll be proactive about communicating with the industry and competing for some of the top talent.”
Goldberg said that it is “very possible” that the company will acquire game development studios. It has acquired three companies in the past, including game developer Fun Tank.
“We want to create deeper and more engaging games than what we have,” Goldberg said.
The company is already doing a lot of activities that are related to games, such as rewards and online sweepstakes.
“The skills in a game company are very relevant to what we already do,” Cullinane said. “They are at the leading edge of how to monetize consumers and understand the analytics.”
If PCH expands into games, that will be a major transition. The company started in 1953 selling magazine subscriptions, and the sweepstakes came along in the 1960s. The brand today is associated with the chance for a big win and a life-changing event.
The digital businesses are contributing a considerable percentage of revenues these days, and it is the focus of the company’s marketing efforts. PCH spends about $65 million in paid advertising per year, including $35 million in digital and $30 million in TV ads. PCH will operate its legacy business as long as it can.
“We are now seeing a steady increase in the share of emails being opened on mobile phones instead of desktops,” Goldberg said. “About 50 percent of repeat traffic comes in via mobile. This is clearly the direction that the consumer is headed in.”
PCH gets a massive amount of traffic from its contests. It has millions of people interacting with its brand every day, but Goldberg wants more share of everybody’s day.
“Where Mark will be really helpful is in building out deeper levels of engagement,” Goldberg said. “When you combine the opportunities out there with the traditional PCH business of offering a chance to win, that’s the opportunity that I see.”
PCH has already grown a big digital business. The company has 550 employees, mostly in New York. It acquired the Liquid Wireless performance advertising group in Portland, Me. Liquid Wireless has teamed up with the the App Tap app discovery and advertising platform to deliver the right apps to the right users at the right time. The result of this targeting is click-to-install rates of 25 percent and increased revenue per click by 55 percent for app advertisements.
“They are doing very well with the app install business today,” Goldberg said.
Online, PCH has 15 million monthly unique users. The company has 2.3 million instant-win game completions and about 1.1 million lotto game plays every day. The company has 2.5 million fans across its Facebook pages with an engagement rate as high as 20 percent.
“We have this loyal group of consumers, and now we want to have more social interaction across the pages,” Goldberg said.
“Our goal for this year is to build out our mobile experience,” Goldberg said. “It has been a major disruption for us. We have a formula that is very engaging, and we want to use it to deliver deeper levels of engagement.”