The Financial Times is doing something most publishers aren’t: making money online. It might be a coincidence that it’s doing that without relying on the fickle online ad business.
The company got 30 percent of its revenue in digital last year, and, according to Rob Grimshaw, managing director at FT.com, the publication expects to increase that this year. Grimshaw says the company is looking to push that portion up to 50 percent. Much of that money comes from subscriptions — content revenues are up 11 percent year over year — even though advertising revenue has grown every year since it introduced a subscription-based model in 2001. According to Grimshaw, of that 50 percent, it’s likely the business will be 75 percent based on subscriptions and 25 percent from advertising.
Currently, the site has 285,000 digital subscribers and a print circulation of 310,000. U.S. digital subscriptions have already surpassed U.S. print circulation and the company expects that trend to extend globally by early next year, possibly even sooner.
“The pace at which revenue is scaling is incredible,” Grimshaw said. “We’ve been able to expand rapidly. We find there’s no barrier there; people are happy to pay for our content. We’ve been contrarian in this area but always felt confident we had great quality content and people value it.”
ComScore puts the London-based outlet at around 5.7 million uniques worldwide for April 2012 (1.2 million in the U.S.), up from 3.6 million in April 2011. FT has seen its registered users increase 33 percent to more than 4.5 million. While still far behind the Wall Street Journal, which ComScore has at 12 million uniques, the FT boasts of a highly targeted audience: influential global business leaders. But as Grimshaw noted, the focus for the publication is not on traffic numbers but on the subscribers and registered users.
“Because we have a direct relationship with registered users and subscribers, we can tell advertisers more about our audience and target specific segments of the audience,” Grimshaw said.
FT.com advertising grew by double digits in 2011 as a result of broadening its base of major clients — Barclays, BlackRock, FedEx and Emirates — and the launch of new mobile platforms, the company said. It left the iTunes store last summer because what publisher wants to pay Apple a 30 percent vig? So it created its own HTML 5 mobile Web app. It also claims its luxury category, online, was up 75 percent in 2011.
“I’d say it’s a premium site,” said Dave Marsey, group director of media at Digitas. “It’s a must-buy depending on marketing objectives. If you’re looking to launch a brand or service in the U.S., Europe and Asia, looking for key financial markets across the world, FT is a must-buy in my mind.”
Universal McCann’s svp of client business partners, Justin Wroe, agrees to a point. He explained that when looking to reach the high-net-worth individual, the FT is part of the consideration set as it passes the test on right audience, right value for the consumer.
“However when we drive further through the process and look at what customization and experience we can build together (critical for our luxury consumer) the FT has historically not been the partner that we align with most frequently,” Wroe said.
Wroe points to some of UM’s luxury clients as an example of the FT looking at advertising-focused solutions rather than content-creation solutions.
“When we RFP for more of our luxury clients, we are looking for experiences and solutions that will add value to the end-user interaction — i.e., we don’t want to just run print ads and banner ads; we want to create a new content experience that will drive deeper engagement,” Wroe said. “This, admittedly, is a big ask as it requires a closer association of ad/edit, but at the end of the day, we have found some partners that are willing to create these partnerships with our clients. In the past, a big portion of what we have seen from the FT is a more “advertising” focused solution rather than content-creation solutions.”
Grimshaw said that the publication has had a philosophy of trying to get close to the client and the agencies and understand the marketing problems they’re trying to solve.
“This is not a straightforward sales process where we quote a price,” Grimshaw said. “We want to find what clients are trying to achieve and deliver solutions.”
For example, “Behind the Dial” is an interactive advertising solution for Jaeger LeCoultre, where the FT flew a photographic and video team to its factory in Switzerland and created a feature on FT.com that allowed users to manipulate 40 different watches (allowing them to engage with the brand without feeling like they left FT.com).
The FT is making moves in the U.S., as it has been the biggest market for digital subscribers over the last couple of years. The company is still global-focused, but the thought process is: if it geta it right in the U.S., it’ll get it right throughout the world. Not a bad place to be in for a publisher these days.
“Over the next two years in New York, we will build up digital resources in the New York office and make sure we have all the same skills and experience in New York that we have in London,” Grimshaw said. “We’re investing in data expertise, marketing, and turning it into a digital operation in New York.”
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