U.K. newspaper group Reach has set itself the goal of getting 7 million readers to register with an email address by 2022. The publisher aims to entice sign-ups across its over 25 daily and regional titles by rolling out newsletters, encouraging app use and digital services, like its local news aggregator platform In Your Area.
Reach had an audience of 40 million monthly unique users in December, according to Comscore. But just 98% of that audience is anonymous and hasn’t consented to share personal information with the publisher. That’s a problem for growing digital advertising revenue when the end of the third-party cookie is nigh and regulators are tightening the vice around privacy.
More registered users will let Reach tailor content, products and ads to people based on behavior and demographics like location to increase display advertising yields.
“The old trope that free content is not valuable or in demand, we just don’t believe in that,” said Reach CEO Jim Mullen. “We’re seeing huge demand, so much so that we’re asking people for one piece of information and we will send them what they are interested in.”
Reach publishes a lot of content — around 3,000 articles a day — registering an email address means it will send people tailored content in topics like football, parenting, travel, pets or the environment. Reach’s local news aggregator In Your Area has 2.5 million users sharing their address for local content, although it doesn’t share how many people have registered an email address for that service.
When a reader signs up to a newsletter, uses In Your Area and the app, Reach will gather data like reader interests, address, salary and house value estimates, commuting preference, device and details like intent or hobbies.
This additional information opens up a number of revenue avenues. Reach is banking on more relevant content increasing readers’ time on the page. More personal data will improve audience segmentation, particularly in a post-cookie world. Both of these will help grow display advertising yields. New content verticals will lead to more sponsored content opportunities. Outside of advertising, the publisher forecasts that registrations will grow revenue through premium app purchases, affiliate revenue and business-to-business ventures. Mullen was unable to detail exactly what the revenue diversification split will be by 2022.
“Their argument is that 2% of their audience is registered compared to 90% of tech companies, so their 7 million aim — roughly 15% of their total audience — is ambitious for a tight timescale,” said Alice Pickthall, senior media analyst at Enders Analysis.
Having a patchwork readership across over 25 brands is less valuable than on one title, writes media analyst Colin Morrison. Like all publishers, Reach would struggle to offer the same granular audience targeting as the platform walled gardens do.
“Yields are small,” said media analyst and senior adviser at Trillium Partners Alex DeGroote, “local display doesn’t bring with it the big budgets that nationwide funnels like Facebook will.”
Mullen is bullish on the prospect of local news, saying “another trope we want to bust is that regional news is dead. It’s not.”
Reach has been accused of previously “sleepy” digital strategies, leaving the company more reliant on increasing cover prices of its print product while the circulation has fallen, according to Morrison. Popular national title the Mirror has increased its price by 75% and lost 50% of sales over the last five years. And years of chasing digital advertising revenues has created a chasm between the publisher and its readers, the same ones it now needs to ask for registration details.
Mullen, appointed in August 2019 and former CEO of gambling firm Ladbrokes, brings digital marketing expertise. The early signs of success emerged in its earnings report last week. Revenue for 2019 was £702.5 million ($908.5 million), 5% down year-on-year. Although the £153.4 million ($198.4 million) operating profit was up, advertising was 19% down. And the majority of revenue still comes from print with only £107 million ($138.4 million) from digital, but the growth from last year is more encouraging.
“Fifteen percent digital revenue intuitively feels low,” said DeGroote. “But they are starting from an immense heritage in print products, 17% year-on-year digital growth rate is a healthy performance.”
More in Media
News publishers hesitate to commit to investing more into Threads next year despite growing engagement
News publishers are cautious to pour more resources into Threads, as limited available data makes it difficult to determine whether investing more into the platform is worth it.