News brands have been attracting record audiences during the pandemic as more and more people find themselves with a new daily news consumption habit. But while demand for subscriptions at quality titles is through the roof, ad-supported businesses haven’t been having such a fun a ride. Execs from the Wall Street Journal, Financial Times and Reach talk to The Drum about the ups and downs of lockdown, and about the products they’re designing for the future.
The Wall Street Journal
Having breached the 3 million subscribers mark, more than 2 million of whom are on a digital plan, WSJ has been showing just how to build a product that’s less reliant on newsprint.
Suzi Watford, its chief marketing officer, believes the pandemic has sped up a so-called “flight to quality” news sources.
Watford has been monitoring the accelerated growth to WSJ’s subscriptions business and is aware that there must be a ceiling to demand. And with the wider Dow Jones Group now boasting 5 million subscribers, it is clearly winning the battle for consumers’ wallets – but, this may be at the expense of local and mid-range titles.
These issues aside, Watford seeks more growth and for that, she needs to create a more dynamic, personalised membership, with a higher ceiling and lower barrier to entry.
“We have this unique role to play, not just with our core business audience who we were already seeing come to us, but also with younger readers who have perhaps been coming to the Journal for the first time.”
She says we should expect to see some deviations from the “one-size-fits-all” subscription model. “There is an opportunity to understand more about our customers and how we can create different products and services.”
From its dynamic paywall, the Journal can gather data on user activity, from the content that inspires a subscription to the content that keeps readers in the system.
A huge team of data scientists are tasked with ensuring the wheels don’t fall off this machine. Theoretically, the longer it gathers user data, the more it’ll be able to tailor its subscriptions.
Reflecting on the pandemic, Watford says: “There’s nothing quite like a crisis for a news brand to show how we are really good at working quickly.”
David Buttle, the global commercial marketing director at the FT, says the title has also “seen an acceleration of subscribers”. It breached 1 million subscribers before entering 2020. It is now fast approaching 2 million, with close to half of those being digital-only.
Consumers, says Buttle, are becoming increasingly aware that ”quality news isn’t free, it has a cost”. He says that, as this realisation spreads, “more publishers are pivoting towards this model”.
Of course, the FT could see these new entrants as competition, but it actually has a consultancy to help news orgs retain their subscribers.
Over the last decade, consumers have shown a real reluctance to pay for digital news. But during the recent pandemic and what seems like a growing need to combat online misinformation, consumers are coming around to the value of digital news and gradually shifting the scales.
Buttle offers a warning, however: “There is a limit to the number of titles any one individual is likely to pay for. And that’s purely on the basis of how much value you are able to get and how much time in a week you’re going to spend reading.”
He anticipates a “levelling off” of this growth soon enough, but offers a few strategies to renew and grow interested. Firstly, the FT is among the many publishers forced to move events online (check out the ups and downs of those efforts here). And many will stay online, so the move is paying off.
He sees an opportunity to build out “mini-brands” around select content verticals. Could it offer a reduced entry price to consumers keen to pick and choose select coverage – such as an insight-filled newsletter around a certain sector?
“Moral Money” is one such brand. 100,000 people have reportedly signed up to this twice-weekly newsletter. Its Covid-19 newsletters have seen similar demand.
A final shoot of positivity for Buttle is that when the firm was “stripped” of its physical assets in lockdown, the machine kept on turning. “We’re very lucky to have amazing people,“ he concludes.
As an ad-supported business, Reach (parent company of news brands including the Express, Mirror and Daily Star) isn’t able to rely on user-generated revenue. And it has been far from business-as-usual for the publisher as many marketers block Covid-19 news from their media buys.
A World Federation of Advertisers (WFA) study said 89% of large multinational companies would defer marketing campaigns in May. Half said they would freeze spend for six months. It was this trend that led the Washington Post’s chief revenue officer, Joy Robins, to pivot its commercial team away from advertising for the time being to instead help businesses on a local and national level show their utility in the wider world during the pandemic. Even the New York Times announced a 55% ad revenue shortfall in May.
Terry Hornsby, digital solutions director at Reach, says of its stable of national and local titles: “With our scale and the volume we have, we are the fifth biggest platform in the UK.” Its income, he says, is largely reliant on programmatic advertising, direct advertising and sponsorships.
Audiences have seen “huge” growth, while consumption habits have shifted towards mobile. And as more people return to its sites, many of the pages have been redesgined and optimised for this higher demand.
It is also rushing new products to market, including newsletters, just like the FT. One, called Lemonade, is tailored to help parents in lockdown and is seeded across the Reach group. The publisher had saw a need and moved to fulfil it and now has a database of parents that can be advertised to directly. It has many other examples of these verticals building up engaged audiences.
“We are learning more about people’s habits by engagement and the way they’re accessing us,“ says Hornsby. “There’s no better time to really be in a news publishing business, but also be at the forefront of being able to build products on that.”
Not all the action is online. But, in many respects, he believes Reach has refocused on local audiences too. “We’ve been delivering papers to the doors of people who couldn’t get out. We’re a trusted brand and have a care in the community vibe.”
Revenue difficulties and staff furloughs aside, at the other side of the lockdown will be a company with a greater understanding of its audiences and what they are willing to pay for.
News brands aren’t alone in welcoming floods of new subscribers. Earlier this week, a dozen execs from the UK magazine publisher sector explained how their print titles are performing, while sharing the feasibility of their business models after the lockdown.
WSJ, FT and Reach spoke with Stephen Lepitak as part of The Drum’s Can-Do Festival, an online event celebrating the positive energy, innovation and creative thinking that can make the marketing community such a powerful force for good. You can watch the interview in full here.
Sign up to watch forthcoming sessions and see the full Can-Do schedule here.