While the majority of the world is panicking about the destabilising effects of Brexit, a Trump presidency and other potentially catastrophic developments, some publications are rejoicing. That panic has seen increasing amounts of consumers flock to editorial products with a reputation for authoritative coverage, and for publications that rely on circulation and subscription revenue, it’s boom time.
One such beneficiary is The Economist, for whom the past year has seen an acceleration of its ongoing efforts to minimise the impact of universal advertising spend decline. Its deputy editor Tom Standage, discussing the title’s nomination for Media Company of the Year at this year’s British Media Awards, explained:
“We have quite a big push starting now on circulation marketing, so it’s been extremely successful as a strategy over the last couple of years. Now that we’re sure that that sort of model works, we think now is the right time to invest more in it.
“We will benefit disproportionately if we invest in that now.”
Notably, not only has The Economist managed to increase its revenue from circulation over the past year, it has also managed to increase the profit on those circulation sales as well, due to behind-the-scenes redesigns of subscriber management and circulation systems and a change in philosophy with regards to things like group discounts on subscriptions through GroupOn. Standage notes that while in the old days those sorts of deals made sense, where you’d sign people up at a discount because it increases your advertising base, “we’d much rather they decided to pay the full rate or decided not to continue to subscribe any more”.
Those changes might not have the same immediate visual impact of the redesigns of its site and apps, but for a company adapting to a change in how it monetises its audience it’s vital. Standage says:
“All of the pieces that run our subscriber management systems and circulation management systems are being replaced as well. There are many benefits that come from that, but one of them is that it allows us to essentially deliver our journalism more reliably to our readers.
“They’re all being monetised. It’s not just about signing up new subscribers; it’s about serving the subscribers we have as well as we can.”
That’s especially important as the publication continues to see the proportion of revenue it receives from traditional display advertising fall. Standage estimates that, while around 50 percent of the Economist’s revenue came from advertising at the turn of the dotcom boom, that figure will be closer to 14 percent next year.
He notes that while of course he is sorry to see that revenue go, primarily moving across to the Google/Facebook duopoly, he still believes there are areas which in which The Economist can benefit from the halo effect that used to entice advertisers to display advertising opposite the brand’s editorial content:
“Our response to that is to manage the decline; the reality is that advertisers increasingly want to buy different sorts of advertising, they want to buy the type of advertising that Google and Facebook are selling in particular and you can see that they’re hoovering up most of the growth in that area.
“There are some other areas we think where we can make a distinctive offer. We have thought leadership, we have content marketing, we have sponsorship of things like the Economist Films series, of events, and that part of the business we think is more sustainable in the long-run.”
But those efforts would be wasted if it weren’t for a consistently growing demand for The Economist’s analysis. The flight back to quality analysis spurred by the tumultuous and largely terrible events of the past year have benefited a number of legacy publications in the US, but The Economist saw 13.9 growth in digital subscriptions in the year to December 2016, demonstrating that there’s an appetite for its global approach to explaining the issues.
That’s why the team at The Economist is experimenting with new forms of storytelling and repacking of its analysis on platforms that seem counter-intuitive. Standage explains why its award-winning Snapchat experiment was launched in the first place, and why it is worth continuing:
“You might have thought we wouldn’t be interested in those third party platforms because if we have a circulation model how can we use them? The answer is that actually it is a very useful way for us to expand our reach and put our journalism in front of a wider audience, and Snapchat fits into that as well.
“We are proud to be this antidote to the Kardashian coverage. Clearly there is an audience for that.”
He notes that while the perception is that users of Snapchat Discover are solely interested in celebrity coverage, the numbers they’ve seen for their own coverage belie that idea. Instead, they’ve proven to be receptive to the vaguely Monty Python-ish approach to coverage that The Economist has always taken in print. The same is true for the audience for The Economist Films series, which Standage notes can be repackaged in a virtuous circle of reinforcement:
“We make these mini-doc series that are editorially independent but are sponsored, but then we do short extracts of those and short films derived from those which we put on social. We do other short films to keep the audience warm on social, and those two parts of the model reinforce each other.”
There are any number of ways that the current period of global destablisation could end. Some of those ways don’t even include nuclear weapons! But while there is this need for calm, objective global analysis, The Economist is in a great position to continue growing its subscriber base.
It’s continued success might even provide a counterpoint to H.L. Mencken’s old adage that noone ever went broke underestimating the intelligence of the great masses of plain people – that it’s possible to become a success by providing analysis that stokes the intelligence of people who desire to be informed.
The British Media Awards – for which The Economist is nominated in a number of categories – take place on May 3rd in London. For more information or to book your table for the night, click here.