Trinity Mirror CEO Simon Fox - publishers must be more creative with advertising to avoid paywalls

“If you’re not going to go down the paywall route you are cutting off a revenue stream, that’s evident,” he said. “Therefore, the remaining revenue stream is advertising so we have to be creative at finding types of advertising that deliver a response, that’s the only way we’ll be able to catch advertisers’ money.”

Trinity Mirror recently piloted a seven-day Sunday People website on a business model by which it would be funded entirely by native advertising. The site failed to hit traffic targets within a three month period and Trinity Mirror axed it.

However, Fox said the use of native advertising would continue throughout the rest of its brands, and dismissed industry claims that pulling editorial and commercial content more closely together was unethical or could confuse readers.

He used the Guardian as an example of native advertising working alongside “the absolute leader" in ethical journalism. “If you take the Guardian’s recent significant deal with Unilever to produce content – I consider the Guardian to be the absolute leader in ethical journalism, and I’m convinced they will not confuse their readers.

“I’m convinced they’ll apply their journalistic skills to working with Unilever, but equally I don’t think their integrity will be compromised, and that’s what we need to do.

"The evidence would suggest that if contextual advertising is done well it delivers a better response for advertising. But contextual advertising can be as simple as advertising in the motoring section of a newspaper for a car, that is contextual, and doing that online is going to deliver a better response."

He continued: "We have to ensure advertising works for our readers, but we also have to ensure that readers are not confused. If we can find a balance where it is always clear what is editorial and what is native, but that the advertising itself is more in the flow of the content and delivers a better response for the advertiser then it's something we have to look at seriously."

On paywalls, Fox said “you should never rule anything out”, but added it was not currently a route Trinity Mirror was looking at.

“You have to think about the reader first, and in a world where generally the stream of content, the flow of day-to-day news content is freely available from many other sources such as the BBC, Twitter, the Guardian, Mail Online, I don’t think it’s realistic to assume you can charge for something that is readily available,” he said.

According to Fox, the success of the Sun’s paywall was due to its offer of a bundle of services which “happen to include journalism” rather than straight news content, adding that the Mirror had benefited in terms of traffic since the Sun joined other News UK brands and moved behind a hard paywall in August last year.

“I think the number of visitors going behind the Sun paywall is relatively modest by internet standards,” he said. “It may be acceptable for News UK to have that number of subscribers, but the Mirror is approaching 50 million monthly uniques compared to a couple of hundred thousand subscriptions.

“One is a scale game and one is frankly a bundle game, it’s not simply about producing news. When the Sun went behind a paywall it put bundles into that offer: free goal clips, cheap Spotify subscriptions, and other things. I think we have to distinguish a pure paywall from a bundle of services that happens to include journalism, for which a price is charged.”

Trinity Mirror’s latest figures showed improvement following heavy investment into transforming the brand into an established digital news offering. Adjusted pre-tax profit grew by 2.6 per cent to £101.3m. Revenues continued to fall, down six per cent year-on-year to £663.8m in 2013, although revenue decline slowed to three per cent in January and February of this year. For Trinity Mirror, the figures are encouraging following a turbulent period for the company’s finances.

Digital display advertising for the publisher grew by more than 30 per cent, and average monthly unique users grew by 58.9 per cent. Fox said the company was not yet where he wanted it to be, but overall the figures were positive.

“I think the figures were a good set of results,” he said. “There weren’t many bads – profit moved forward, cash generation is really strong and digital revenue is now starting to accelerate. It’s not where we want it to be, but we’re where we thought we would be, so it’s a pretty decent set of results.”

He added that the company would continue to focus on two points: developing its digital platforms and growing “huge audiences”, and investing in digital innovation, such as its data-driven Ampp3d service, its youth offering Us v Th3m and the recently launched Scotland Now.

“Our websites are free so we need to build huge audiences, and if you look at what happened last year our audiences accelerated throughout the year. We were growing by about 20 per cent at the beginning of the year, and by December unique users were up by 100 per cent and page views were up by 136 per cent, so the rate of acceleration in audiences is extremely encouraging.”

With the surge in page views comes a huge increase in advertising inventory on offer, Fox added, and the company has also been investing in its programmatic trading capabilities.

“Programmatic trading is vital. The rapid growth of our page views is thankfully producing huge, quality inventory. We need to sell that both as a hand sell through agency sell, but we also need to sell it programmatically.”

Meanwhile the Guardian’s deputy chief executive, David Pemsel, said in his opening keynote at the Guardian Media Summit earlier this week, that a paywall on the Guardian would have made whistleblower's like Edward Snowden less likely to approach the title because it would have hampered the global reach and influence of its journalism.