The owners of feisty business paper City AM have insisted that their bold experiment to shake up the business model for the news industry has not failed.
Lawson Muncaster and Jens Torpe made a daring move in shifting journalism’s historic “church and state” boundaries between the newsroom and the advertising department when they launched their radical City Talk initiative almost a year ago. City Talk allows commercial clients direct access to the paper’s online content management system (CMS), allowing them to publish branded content directly to the website.
City AM’s rivals could be forgiven for thinking that the strategy has floundered, given that Charles Yardley, the guru brought in to oversee the plan, has just left the London-based title to return to Forbes, his previous employer.
But Muncaster and Torpe are adamant that City Talk is working. There is a cluster of prestigious new clients waiting to join up, says Torpe, as he reels off the names of some of those already on board. “I think Schroders asset management have been very happy; we have got Estee Lauder in on cosmetics; we have Invest in Edinburgh, and we have got the CFA Institute (another investment organisation) using it, just to name a few.”
Steve Vance, senior economic development officer at Invest Edinburgh, has been City Talk’s best contributor thus far, achieving 8,615 page views for his piece on a pioneering local firm’s success with Li-Fi technology – using light from LED light bulbs to transfer data. The traffic put the piece atop the “Most Popular” chart on City AM’s website, ahead of articles produced by the newsroom.
The sure sign of City Talk’s success, Muncaster claims, is that none of the brands who have so far signed up have quit the experiment. “Of the 10 clients we have had take it up over the last 10-12 months, not one has stopped the process so they are obviously enjoying it, getting things out of it and I think they are becoming quite proud of it,” he says. “As a salesman to have 10 clients coming back and repeating month-by-month, demonstrates the success of the product.”
City Talk clients pay £10,000 a month for deals of three, six or 12 months.
The future of this project might be critical for City AM, which has defied expectations of a brief existence. Founded in 2005, it has become a familiar brand in UK business media and its annual City AM Awards are, as Torpe says, “a staple in the City of London social calendar”.
Publishing's problems persist
City AM’s history has coincided with an upheaval in news publishing and a collapse in advertising. It was conceived as a game-changer, a free-sheet in a market for an audience that was accustomed to paying for information. But it is trying to be a disruptor in an industry that’s already seriously disrupted.
The latest decision by the Wall Street Journal to stop producing a print edition for Europe should be an opportunity for City AM but, actually, it is a sign of its problems. The London paper distributes 91,000 copies daily according to latest ABC figures and Torpe says the demand from readers could sustain far more – but there isn’t the advertising money to pay for an extended print run. “The big problem is that we have seen an unprecedented plummeting of print advertising,” he says. “We know from our analysis of the [train] stations we go to that we could easily do 160,000 [but] there is not the money in the market to support it. That’s why we turned to digital.”
Prestigious titles such as the Financial Times and the Economist have built good subscription businesses from high-end business content shielded by a lightly-perforated paywall. City AM would like to dominate the free digital space but it now faces competition from American digital native publishers that ply their trade in the Square Mile, such as Business Insider and International Business Times.
It’s tough out there. That’s why the success of City Talk is so important.
Muncaster is anxious to “get out of the way” the idea that Yardley departed because he was unhappy with the project. Yardley did a “fantastic job”, says the affable Scotsman. “Put it this way, I will still give him a cuddle down the street.”
In his departure statement, Yardley spoke only of the “new and exciting opportunities” in his newly-created role as general manager for strategic partnerships Europe at Forbes, which is an international industry leader in persuading business leaders and brands to pay for the opportunity to contribute branded material to its site. Torpe says: “What happened was that Forbes came back with a very good offer to Charles and he still longed to get back on the international scene and he had delivered all the products to us.”
Brands behaving like newsrooms
City Talk is another disruption play: although the content is clearly marked as being produced by the client (eg with a tag saying “Schroders Talk”), handing over the keys to the CMS is an industry first and potentially gives a brand the opportunity to operate more like a newsroom, reacting to breaking stories and becoming part of the conversation.
Increasingly, this is how big corporate communications teams are set up, to be fast and reactive. In another favourite analogy, Muncaster compares the City Talk arrangement to a brand such as Hugo Boss taking a concession space in Selfridges. But getting brands – and media agencies – to commit a large chunk of their budget remains a challenge.
Torpe, a Dane and a former executive at the Metro International global free newspaper group, says he has always realised City Talk would require patience. “If you come into the market with a totally new product, it takes time to get clients in but we have passed that hurdle. We have so many potential clients lined up to start in September or October. The first half year is very hard to sell it in and get the first two or three advertisers. Then, when you can refer to their experiences, it starts to pick up. It’s a bit like a snowball and now we are ready to really grow the thing.”
The rest of the industry will be watching. Huge investments are being made in native advertising – where teams such as Guardian Labs or the Telegraph’s Spark team create branded content designed to sit easily alongside editorial material.
City Talk is a different approach and City AM’s founders dispute the idea that clients are less capable than publishers of producing compelling content. Torpe says that brands can often draw on better specialist writers than a media outlet. “Schroders, for instance, have some of the best experts in investment and finance you can find. I don’t know how we would make it better. What we are looking for is to have experts providing our readers with really valuable content and our feeling is that the clients we have worked with are absolutely capable of doing that themselves.”
Muncaster says City Talk material is given preferential treatment compared to branded content on other news sites, which can have a shelf life. “The native products for other publishers is put in with the commercial side of the business, whereas in City Talk it is a genuine editorial article that will sit there for infinity.” Chief executives, he claims, take more interest in a branded platform with articles written by colleagues, than they would in a native content deal. “When you sign up for City Talk, the approval process goes all the way up to the board,” he says.
Schroder’s best performing piece has been “A short history of investing in gold and what to expect in 2017”, penned by the company’s investment writer David Brett, a former journalist. In total, 50 City Talk articles have achieved 1,200 views or more. It’s not exactly Mail Online but City AM likes to say it has a highly-targeted business audience. According to Muncaster, City Talk articles perform best when they bring an expert viewpoint to the wider news agenda. “Topical content incorporating what they do or what they are saying to do – that is the perfect storm for them.”
For City AM, the past year has been a bit of a storm. The upheaval to the website of introducing City Talk has caused overall web traffic to stall at 1.5 million monthly uniques. But Muncaster, ever optimistic, predicts a spike in traffic and says the disruption was necessary for the publisher’s long term strategic future. “We are probably back to the same numbers we were at before we did this but we have now got foundations in place so that we will have continual growth in the right way.”
Ian Burrell's column, The News Business, is published on The Drum each Thursday. Follow Ian on Twitter @iburrell