Newspapers are dead. People won’t pay for news any more. Millennials don’t read the news. Media companies – especially newspapers – struggle with digital transformation.
These maxims may be true for some firms, but not for the Financial Times. Best known for its premium finance-centric content and pink newsprint, this 126-year-old institution has broken free from its stuffy British gentlemen’s club reputation and established itself as a global digital media leader. As much newer rivals continue to struggle with the ongoing disruption in the media industry, the Financial Times stands out as an example of digital transformation done right.
Digital in their DNA
First, the numbers: the FT’s total circulation grew 10% year-on-year to almost 690,000 across print and online, the highest paying readership in their 126-year history (Deloitte assured figures from Q3 2014). Furthermore, digital readership grew strongly, with online subscribers increasing 23% year-on-year to 476,000, representing more than two-thirds of the FT’s total audience.
Additionally, mobile readership continues to increase, driving almost 50% of total traffic and 20% of digital subscriptions. In fact, content revenue for the FT exceeds advertising revenue and is at an all-time high (numbers from the FT).
The secret to this dramatic success? They don’t identify themselves as a newspaper. Instead, they think of themselves as “a premium brand with high quality content,” according to Mi Li, Manager of marketing and audience development for the FT.
Other media firms have struggled with their DNA. CNN is a cable company. Newsweek is a print weekly. And daily newspapers around the world predictably identify themselves as daily newspapers. As a result, when revenues drop and the audience deserts them for greener digital pastures, established media properties struggle with internal organizational discord between their traditional and digital businesses.
By seeing themselves as a premium content provider rather than a newspaper, however, the FT has largely avoided these struggles. Print is simply one channel among many for reaching their customers. “We want to be everywhere our readers are,” explains Li – regardless of which technology channel they happen to prefer at the time. In fact, “people increasingly use multiple channels, depending on the time of day,” Li says. “For example, they read the newspaper in the morning, smartphone on the go, desktop at work, and tablet at night.”
And of course, many customers also read the print paper, even when they use digital touchpoints at other times. Li emphasizes that “we still value our print product.” In fact, they continue to improve it. “In September 2014 we refreshed the newspaper to make it better integrated with our web presence,” Li explains. “The global editions are streamlined now.” It’s no wonder that the paper remains profitable based on subscription revenues alone.
Marketing at the Top of the Funnel
Digital transformation requires both a renewed focus on the customer (as I wrote about in the health insurance industry) as well as an organizational shift that cuts across silos (as this article about the pharmaceutical industry illustrates). The FT’s approach to audience development exemplifies both of these principles.
“We’re focused on the upper funnel of prospective customers who may know little about FT,” Li explains, where “upper funnel” refers to the broadest possible potential audience for the FT’s content. In other words, the FT casts a wide net for potential customers, cutting across different demographics as well as different technology channels.
Li’s role as manager of audience development emphasizes this horizontal focus. “Audience development includes investment in display, social media, video, and content promotion,” Li says. “We’re also looking at the quality of visitors who can experience the content and features we offer.” In fact, the FT continues to expand their digital portfolio, with content hubs like mymba.ft.com for business students and tech-media.ft.com, which Li says “contains multimedia and social content aimed toward millennials.”
Casting their audience development net wide enough to catch the elusive millennial demographic is a particularly bold move, as a Pew research study suggests that millennials spend less time reading news than their elders. Less time, of course, doesn’t mean no time at all, and the FT understands that their premium content isn’t for everyone in any demographic.
Struggles at the Top
There is some irony in FT’s digital successes, however, as their parent company is diversified education firm Pearson PLC – a company that has struggled to find its direction since the 1844 founding of building contractor S. Pearson and Son. It entered the media and publishing businesses in the 1910s, with the eventual founding or acquisition of Prentice-Hall, Penguin Books, Addison-Wesley, and Simon & Schuster, eventually acquiring the Financial Times in 1957.
In spite of this storied history in publishing, media, and increasingly on education, their most serious investment in digital came only last year, when Pearson refocused their efforts on digital in 2013 with a £150 million ($227 million) investment. Today, the FT’s successes with digital outstrip the rest of the Pearson organization, and even though Pearson has been through various reorganizations over the years, the FT and Pearson struggle to achieve synergies.
Nevertheless, FT is integrated with Pearson in many ways and their audiences overlap. In fact, in December 2013, Pearson merged the New York Institute of Finance (NYIF) into the Financial Times Group, expanding executive education leveraging strengths of FT marketing channels and digital content with NYIF courses and audiences. While such synergies represent an important first step, only time will tell whether the FT’s industry-leading digital transformation successes will translate to the Pearson organization as a whole.
Mi Li will be speaking on “Leveraging Data from Upper Funnel Audience to Delighted Customers” at the Big Data & Marketing Innovation Summit in Miami November 6 – 7.
Intellyx advises companies on their digital transformation initiatives and helps vendors communicate their agility stories. As of the time of writing, none of the organizations mentioned in this article are Intellyx customers. Image credit: Kai Chan Vong.