The growth opportunity for paid subscriptions has become a beacon of hope for many battle-weary publishers. But for the advertising departments within publishers that have a joint subscriptions and advertising business model, the pressure is intensifying.
For the latest installment of our Confessions series, in which we offer anonymity in exchange for candor, we spoke to an advertising and product development executive at a traditional news publisher, about the internal tug of war.
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Answers lightly edited for clarity and flow.
What’s the biggest frustration trying to grow ad revenue for a publisher that’s focused on driving subscriptions?
Frustration sits at the top level with the CFO, CEO and shareholders. They all want to make money, but there is a line there that you can’t really grow both sides and retain editorial independence without somehow diminishing the user experience.
The subscriptions department are only interested in growing subscriptions, but they think the main way to do that is to keep redeveloping the website. So they pour millions of pounds into doing that every few years, and each time they do, it changes the advertising business. The last time we redeveloped the site we lost 30 percent of our ad space, but there was no adjustment to the advertising revenue targets; in fact, they increased. But when we want to add certain units, audio or video content to a page, which we believe will encourage people to stay on the site and click on other articles, therefore increase inventory, editorial says no.
Has that strategy improved subscriptions revenue?
No, it’s down 30 percent [year on year]. In 2016, we killed it [on subscriptions]. But we didn’t take into account that Brexit [coverage] boosted our readership by 600 percent, and Donald Trump coverage by a further 800 percent month.
So the advertising business feels neglected.
The ads business is at the back of the queue, stuck behind what subscriptions and editorial want to do. But in an age where so much content is available for free, you have to have a middle ground, and there doesn’t seem to be any. The mentality is: ‘It’s us [editorial and subscriptions] and them, those guys in advertising.’ But everyone has to hit their targets. There is no conversation at the top level between the people who manage those businesses.
Would it be better if one person was accountable for subscriptions and advertising?
Yes, but it’s also the fact that the editorial team has no interaction with the commercial team. There is no dialogue to discuss new things to try and how each side feels about it.
What’s an example of a typical communications blockage?
There are things we could do to improve the number of articles people click on. If every reader clicks on two stories, we can double our inventory. But when we make suggestions for ways that can happen — like recommendation [widgets] for other articles to read at the bottom of the page, it’s not pushed through properly. So you end up with the first article recommendation being the same story the user is already reading. They’re not thinking of the user journey. You can’t keep spending loads trying to make the website sexier to make people stay longer. They don’t come to the website as a shop window. There are lots of websites that are basic, but have high engagement rates because the content is good and they have great recommendations so people follow other articles.
How has the General Data Protection Regulation complicated the ads business?
It took six months to deal with GDPR. We had external advisers to help us. But it was led by subscriptions; we in advertising found out by accident.
Found out what?
That nothing was being done to prepare for GDPR on the ads business. I tried to flag that it was going to be a big problem. I was told not to worry — that someone had been put in charge of it. But that someone was viewing the entire GDPR process through a subscriptions lens, focusing on how we retain subscribers. Nothing had been done to address the effect on advertising.
We spoke to Google, back when they were still answering the telephone. After that, they realized we were in trouble and so a businesswide decision was made that no audience targeting would be run in Europe at all, for the foreseeable future. We made some of it back with contextual targeting, but we still lost clients.
What can be done to fix the conflict between subscriptions and advertising?
Both sides need to talk more together. But also CFOs, CEOs and shareholders need to look at revenue not as two separate lines but as a single line. Let’s not say subscriptions need to achieve this, and advertising this, but set a joint target. So long as they both hit it, then it’s fine.
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