Alexandre Pais

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The ‘Financial Times’ Has a Secret Weapon:

Lauren Indvik

For more
than a century, publishers knew very little about their audiences: who they
were, their interests and professions, or what other materials they were
reading. Since newspapers went online two decades ago — The New
York Times
The Wall
Street Journal
the Financial Times all launched websites between 1995 and 1996
— publishers have been amassing a great deal of data about them, data the
125-year-old FT is using to hit record subscription levels
and make its advertising products more competitive, its CEO

The FT enjoys a distinguished role in the sphere of
financial news publications, namely for its commentary on UK and European
markets and businesses, as well, of course, for the salmon pink tint of its
print newspaper. Headquartered in London and edited by Lionel Barber, it employs
more than 600 journalists worldwide and has an average daily readership of 2.1
million, a little less than the Wall
Street Journal
a subscription is about a quarter more expensive).

The paper
finished 2012 with a record paid circulation of 602,000, up 28% from five years
ago. For the first time, the number of digital subscriptions surpassed
 at 316,000
versus 286,000.

the increase in FT subscriptions — which start at $352 per year
for digital-only access — the FT Group is only thinly profitable: Last year, the
Group (a division that includes the FT as well as intelligence service Mergermarket
and a 50% stake in The Economist Group, among other holdings) reported 11%
operating profit on revenues of $568 million. In November,Bloomberg
 the division
was up sale, but parent company Pearson quickly andrepeatedly denied the

Using a Paywall to Gather Audience

other print publications, those that make up the FT Group have suffered from the
general decline in print advertising revenue for the past decade and a half.
Digital and mobile advertising have stemmed only some of the bleed, but in the
last few years growth has come to a near standstill: In 2012,
U.S. newspapers’ digital ad
revenue only grew by about 3%, according
to the Newspaper Association of

Chart used with
permission from The
. Data via Pew

advertisers can no longer support them, publishers have looked to readers for
revenue growth and profit, sparking the rapid adoption of online paywalls
beginning with the New York Times in 2011. The Alliance for Audited Media estimates that nearly
U.S. newspapers now have some sort of
paywall or metered access model.

The FT was well ahead of this trend, introducing a
metered access model in 2007. Today, subscriptions make up more than half of the
FT Group’s revenue, while advertising only accounts for 39%, down from 52% in
2008. At the FT specifically, advertising once made up as
much as 70% of yearly revenue. This year, the paper expects to generate more
money from subscriptions than from advertising.

“That’s a
big deal in the transformation of our business model,” John Ridding, CEO of
the FT, said in a sit-down interview at
Pearson’s U.S. headquarters last month. Ridding
(pictured top) joined the FT from the editorial side, reporting abroad
from Paris and Korea before
taking on a series of executive positions, including editor and publisher
of FT Asia. He was named chief executive of
the paper in 2006, assuming the CEO role of the entire FT Group for the first
time this month.

I asked
Ridding how the FT was able to increase its subscriber levels
by more than a quarter in the last five years. “It’s sort of a combination of
art and science,” he says. “Five or six years ago we started a new media model,
charging for access through a metered system. When we started doing that, it was
primarily to build a revenue stream online, but probably what was more important
over time was the data and customer insight that that gave us. That’s what
transformed the business,” he says.

through some of the reader data — the FT‘s data team now numbers more than 30
across three groups — the FT was able to recognize the kinds of patterns
readers display before purchasing subscriptions. “We would see the sort of
articles they were reading and the frequency they were reading those articles,
for instance, and we began to map those,” Ridding explains. “People do behave in
predictable ways.”

While online paywalls are often perceived as a way to keep non-paying
readers out, the FThas viewed them as a way to bring new
readers in.

While online paywalls are often perceived as
a way to keep non-paying readers out, the FT has viewed them as a way to bring new
readers in. The asks users to register to read up to eight
articles per month for free. It’s here that the FT collects much of its information.
Registrants — there are more than 5 million of them — are required to declare
their e-mail, zip code, industry, job responsibility and position level. Those
who register are, of course, more likely to become full subscribers in the

says the data-driven approach is transforming its marketing and advertising,
too. The data collected from registrants allows advertisers to target campaigns
to, say, executives in the U.S. aerospace industry, or HR department heads
in India. Added to this is a proprietary
reporting tool called Deep View, which offers “the most” insight into
advertising campaigns and how they perform compared to its competitors’,
theFT says. (One media buying manager we spoke to
confirmed this assessment, noting it is only available for direct, and not
programmatic, ad buys.) During and after campaigns, advertisers can see who has
seen or clicked on a campaign, and the optional placement and time of days to
run the ads, “giving them the option to reassess mid-campaign, switch creative
and retarget,” a spokesperson explains.

“We can
prove in real-time quite effectively what advertising is working and put that
data in front of advertisers,” says Ridding. “Marketers have to justify every
cent of what [they’re] spending. Our job is to provide the tools and information
to justify that decision for running a campaign with the FT rather than anyone else.” Technology
companies like Google and Twitter,
as well as publications like The New
York Times
, already offer live reporting capabilities, but the
demographic data (industry, job title, etc.) is particularly unique, the buyer

Data’s Role in Editorial

enforcing on-site registration, the FT has gathered not only a vast amount of data
about who its readers are and how to sell subscriptions and ads to them — the
paper also knows a good deal about what they read and when, as well as the kinds
of editorial products that appeal to them.

The FT‘s newsroom is still tethered to the
rhythms of the daily print cycle, working evening shifts and publishing the vast
majority of its stories early morning UK time. But traffic levels, which
are highest during the day, suggest readers are looking for fresh information
beyond the early morning hours.

“The FT has been around 125 years, and a lot of the
process and structure that has built up over that time no longer reflects the
needs of our readers,” Ridding observes. “The core of our ‘digital first’
initiative is really moving resources to front-end digital editing and
publishing. We’re moving more staff from nighttime to daytime, deploying our
energy and resources and at the times our readers want

As part
of a move away from this cycle, Lionel Barber, editor of the FT, announced in January that 25 staff positions would be eliminated, and
10 more people would be hired to fill digital roles. In a memo e-mailed to
staff, Barber said the FT needs to serve a digital platform first, and
a newspaper second.

That doesn’t mean the FT is moving towards becoming a 24/7 wire
service. “We’re never going to be a wire service, that’s not our job, not what
makes us different and special,” says Ridding. “Nevertheless, I think what
people want is to go to any of our channels at any time, and find what the
editorial brain thinks is the most significant story at that time.” He adds,
“Things evolve and change and happen during the business day. We have to be
reflecting those changes.”

To help deliver on that mission, the FT is planning to release a new online section
called “Fast FT,” which will provide real-time market commentary around the
clock. Ridding emphasizes (again) that it’s not a wire service, seeking instead
to deliver analysis and context to the news, not just the news

Ridding says the FT is also focused on connecting with readers,
building and deepening the communities that form around its content. “A lot of
our readers are serious experts in their fields. We want to create really
high-level, informed conversations with them and us.”

To do that, Ridding
and his team are developing a series of tools to share and discuss content. One,
called FT
, is a premium service that allows business school
professors and students to create and share annotations in the margins of
articles, bringing together insight from a single professor or class, or across
a range of experts from different schools, depending on users’ individual

One data area the FT is cautious in monitoring is pageviews.
Ridding says the organization is “aware” of traffic numbers, but believes their
importance is sometimes overweighted. “Our industry got itself into all sorts of
problems focusing on reach alone,”he says. “Broad measures of traffic don’t cut
it in our world. Depth of our relationship, frequency of visits, readership,
return on those readers… [That’s] what advertisers and more sophisticated
players are increasingly [focused on].”

“That being said, when we see a
particular resource getting a lot of attention, like commodities over the past
few years, it helps us make decisions about [coverage] in different sectors,” he
adds. “But we have to be very careful. People subscribe and read because they
want trusted judgment of experienced editors. For us that’s what the FT stands for, that will never

The data the FT has collected and analyzed through its
metered access paywall has affected its business in myriad ways, helping the
organization find sources of new revenue (subscriptions) in a weak and volatile
ad market, improved the targeting and reporting of its ad products, and informed
the development of new editorial offerings. But in some areas — like traffic —
data can only inform so far; for the rest, the FT must rely on the news judgment that made it
prominent in the first place.

Por Alexandre Pais
Alexandre Pais