Loyalty not scale is how the Guardian plans to survive the new media onslaught
It may have chased traffic in the past but the Guardian is now doubling down on reaching those engaged with the brand as it attempts to secure its future amid the rise of new media.
The newspaper is not that big in comparison to those it deems its real competitors now – Facebook and Google. That was the admission from the publisher’s executive editor of digital, Aron Pilhofer, who said the Guardian is a “blip on the scale of its real competitors”. Stuck in “this middle place” – neither legacy or digital-only - the business is scrambling to get itself on firmer ground.
The Guardian has concerns over how much traffic and data it has to relinquish when working with the likes of Facebook and Google to increase its global reach. With the tech giants increasingly setting the rules when it comes to distribution, and dominating online content without fully sharing user data, the concern among publishers is not only on advertising, but that they’re sacrificing a direct relationship with their readers.
Consequently, the publisher has shifted its thinking to where it feels growth in scale will come from - reaching people who have the most affinity to its brand. It is doubling down on readership and pulling away from scale in what Pilhofer called “the one place where we really can start to drive some revenue”.
The publisher knows that just scale in advertising isn’t going to sustain the future of journalism in the long-term. In the ad market digital display has cratered, with the New York Times down one per cent year-on-year in digital display after years of growth. Publishers have to look at where that revenue comes from now. It’s why in January the Guardian announced a new strategy - with reader revenue from membership at its core.
For the Guardian, focusing on membership does not come without its challenges as it has traditionally not been the most commercially orientated business, according to Pilhofer: “We are having to change that because at the end of the day we have to keep the lights on”.
Its advantage over other publishers is that it is owned by a trust, meaning it does not have to bow down to the control of stakeholders. That gives the Guardian the ability to look at things strategically, without jumping head-first into a paywall, a strategy that has failed other newspapers before.
Pilhofer said “membership is a harder path than a paywall” but expressed no indication of changing its strategy. He said most publishers put up a paywall, convert the initial readers, then “do nothing else”. Initially with a paywall, the money starts coming in, then it rapidly plateaus. The challenge is maintaining that readership. A paywall “lulls you into a state of complacency”, he continued, meaning publishers don't look at the harder questions which are the fundamentals of the business.
“We have started moving from a world in which we are producing content with one goal in mind which is to put out a daily newspaper, to thinking about many distribution channels. Each of those has value associated with it both journalistically and financially. That is a huge shift for a company that is used to doing one thing” he said.
The question posed by Pilhofer, is how do you realign a company that has been fundamentally organised around one thing to be reorganised around many things? And what is the role of editorial in that?
That is why membership - which fundamentally has to be funded by editorial - is what the Guardian thinks will push it in the direction it needs to go.
However, doubling down on readers is futile if the Guardian is not employing an effective distribution strategy to put content where and when its readers want it. To help guide this, the publisher has employed a data and insights team tasked with defining metrics of success that align with the Guardian’s strategy; a reader’s willingness to pay.
Pilhofer revealed the Guardian is readying a bot as it looks at messaging apps as a new place for its content. On its VR project 6x9, Pilhofer revealed there was complexity and financial cost that the publisher did not predict but said it “succeeds as a piece of journalism and technology” so more spend is likely.