City AM was never going to win over purists with its plan to put journalists and advertisers on an even keel but the fine line it now treads between insanity and genius is part of a wider plot to safeguard its future.
Outrage was how many readers reacted to the newspaper’s demolition of the wall separating editorial and advertising in favour a contentious alternative. Branded content appears alongside editorial under this revised doctrine that’s fuelling fears about readers’ ability to distinguish the former from the latter.
While extreme in theory, City AM’s skewed view of journalism spotlights the fading line between church and state. News - and to a greater degree journalism - is becoming so commoditised now that people are comfortable with that sacred wall crumbling as chief operating officer Charles Yardley puts it.
“As long as you clearly label who or what company [has written an article] and what vantage point they’re coming from then the audience is very comfortable with that,” he argues. “Where you see the anomalies is where [on other sites] it says [sponsored content is] ‘brought to you by’ or “in association with’. There’s a reason those articles are labelled that way and it’s because newsrooms at other publishers will not have marketers on an equal playing field as their journalists.”
It sounds like a commercial director’s nirvana but interestingly City AM’s editor, former PR Christian May, is just as enthused by the idea. There’s “no ambiguity” he explains before assuring that neither is there a danger his journalists could be steered by commercial interests. That certainty stems from his belief that articles, whether by a reporter or marketer, will be read on merit so there’s no incentive for the latter to go for the hard sell. What’s also steering May’s reasoning is that the branded content flows through City AM’s content management system (CMS) rather than a native ad unit, meaning those articles are essentially marketing through journalism.
Just don’t call them advertorials; the articles “aren’t an advertising proposition,” insists Yardley, who explains that advertisers pay a monthly fee for a minimum of six months in exchange for unlimited access to the site’s CMS. Despite this claim, Yardley is quick to point out these advertiser articles could close the gap between traffic and revenue on mobile. “The most important thing is that it will work on mobile,” he continues.
“Mobile is pretty dire; those little ads on mobile are fairly ineffectual. Mobile in the news business is all about headlines. If I like a story I click on it so image the advertiser’s headline is amongst those from our reporters and contributors….advertisers’ content is an integral part of the organic news flow of content.”
Cracking the ‘ad light’ model then is vital to City AM’s survival at a time when its peers are struggling to get more money for their online media. While brand journalism will play its part, the other way the publisher plans to fund its own editorial is by getting its 1.5m monthly online readers to read for longer. An infinite scrolling system is being developed to help swell dwell time alongside social media workshops for the newsroom to help reporters understand their audiences. Reporters are also being encouraged to nurture their own “brands” as contributors – or industry experts and analysts – are being recruited (and paid) in part based on the size of audience they can attract.
Some will see letting marketers and contributors publish directly to a CMS as proof it City AM is beset with financial problems. After being profitable until 2012, the business posted losses of £116,000 in 2013 and then £625,000 in 2014. The losses were down to hefty investments in digital according to the publisher’s founders and online revenues were up 300 per cent year-on-year in March to May.
Branded content. Neverending newsfeeds. Social media strategies. All techniques pioneered by the likes of Vice and Mashable, both of whom have an affinity with younger readers that City AM wants to replicate. And as those readers come to its site so will the bulk of its traffic flip from desktop to mobile, in turn accelerating a digital strategy that has been limited at best.
“There hasn’t been a lot of direct digital business sold,” reveals Yardley because most of the publisher’s digital revenues come from its relationship with programmatic business Pubmatic. Moving forward, there’s more focus on selling audience, not just ad impressions and clicks with City AM partnering with Ad Eye to bring to market better data. By overlaying that richer data on top of its display advertising the publisher can sell with fixed pricing reserved inventory that is processed automatically - a process known as programmatic guarantee. Only a small number of campaigns have been booked this way since it launched in April and yet its already generating uplifts as much as “seven times” during that time according to Yardley.
“By the end of this year our automated guarantee revenue could potentially be more than the display revenue,” he suggests. “The more data around your audience then the more refined your selling process to reach readers. For us at the moment it’s about trying to get the sales team to sell display, sell sponsorships, sell packages and sell programmatic. That’s going to be the first 18 months.”
If it gets those fundamentals right then audience extension is on the cards, whereby City AM could monetise its readers once they leave its site. Viewability is another a priority for the business, one it will be hoping is partly addressed through a quiet revamp of its site. There’s still some way to go before the overhaul is complete, though the publisher has recently struck a deal with Integral Ad Science to help measure the viewability of the inventory it sells.
For all the diatribe aimed at Yardley’s controversial view of journalism, he has at least proven it’s a commercially viable alternative during his time at Forbes. Five years after it launched, the publisher’s own brand journalism offer now makes up around 30 per cent of its total digital advertising revenue. Time will tell whether City AM is bonkers or brilliant to follow suit but its decision reflects how winning ad revenue is becoming a zero-sum game amid the voracious growth of mobile-first media businesses like Google and Facebook.
“In this day and age when anyone can publish anywhere in the world there is no longer the church and state [divide between journalism and advertising],” says Yardley. “It was important to get Christian’s [May] and the owners buy in as well as recognising the frailties of the economies of this century-old process – you see that in the media almost week in week out. Its recognising that we need a different content model; a different labour model and a different commercial model to build on the success that we’ve had in the first ten years.”