The Financial Times, faced with the economic slump, jobs being scythed among its readership heartland in the City, and a drop in advertising revenue, overhauled its UK edition almost three months ago. Now the newspaper has shaken up its advertising and marketing divisions, cutting headcount and refining a new structure in preparation for a fresh global offensive (MW last week).
Although the FT faces the same challenges as its fellow broadsheets – declining readership and plunging ad revenues – these have been exacerbated by the newspaper’s strong ties to the fortunes of the stock market. The areas that provide the bulk of its ad revenue – financial services, recruitment and mergers and acquisitions activity – have been the hardest hit and the newspaper reported ad revenue down 18 per cent for April year on year.
The FT’s recent revamp, which included the introduction of a sports page, a glossy Saturday style supplement called Financial Times magazine and deliver more UK business stories and profiles, was supported by a &£2m advertising campaign with the strapline “New FT, New Comment”.
At the time Marjorie Scardino, chief executive of Pearson, owner of the FT Group, said: “The idea is to make it less London-centric and to appeal to business people from small and medium-sized businesses in places like Liverpool and Birmingham.”
Zachary Leonard, who has just been appointed to the newly created post of managing director of Europe, the Middle East and Africa (EMEA), says the aim of the revamp was to increase the number of times its core readership bought the newspaper each week as well as to add new readers. The new high-quality magazine also enables the FT to tap into the luxury goods market for advertising revenue: a recent issue features ads from Bang & Olufsen and Toyota’s Avensis. Tim Kirkman, soon to leave his position as press director at Carat, also points to the “How to spend it” supplement, of which there are 18 a year, as a product that is good at attracting diverse revenues.
Industry experts have been sceptical about the addition of a sports page, with one senior executive saying it is “the biggest waste of money ever put into a newspaper”. But Leonard counters this by saying the FT “does not pretend to be the core read for everybody,” adding that the sports page might offer one extra reason for readers to increase their frequency of purchase.
Leonard also intends to drag in readers on particular days through various weekly supplements: Monday has FT FM (fund management), Tuesday has Creative Business, Wednesday has a special report and Thursday has Appointments. Some of these are set for a facelift.
The FT’s circulation figures for the UK appear to have risen on the back of the initiatives. Average net circulation in June for England, Wales and Northern Ireland stood at 142,992, up from April’s figure of 135,491 (the new-look FT debuted on April 26). However, full rate circulation is down, with June standing at 94,112 compared with 106,497 in April (Audit Bureau of Circulations), though the FT says this is due to a significant direct mail voucher promotion that coincided with the revamp.
There are also the FT’s online services under the banner FT.com. The operation was fully integrated into the FT last year and subscriptions were launched in May 2002. It now has 56,000 subscribers, each paying from &£70 a year.
Now the newspaper is again turning its attention overseas, first to Asia where it admits sales have been slipping and where it will launch a dedicated Asian edition in September to add to the London and New York editions. Together, the editions are designed to position the FT at the heart of the world’s key financial centres.
The new advertising and marketing structure reflects the newspaper’s efforts to boost its position as a global brand. Regional director Ben Hughes steps up to the new role of worldwide advertising director. With regional heads reporting to him, Hughes will be seeking to build client relationships and create global deals.
But the FT faces some serious competition in its plans for global domination, not least from the Wall Street Journal, which has also been badly affected by the ad slump and will be preparing to take advantage of any upswing in the economy. Even weekly UK newspaper The Business, which has an average net circulation of 102,632 for June, classes itself as a global business newspaper.
Many expected that marketing would have a significant role to play in building a global positioning, but the recent reshuffle has seen Gordon Willoughby’s board position of global marketing director axed. Instead the FT is to have regional marketing directors, with the UK coming under the jurisdiction of marketing director for EMEA Gill Hart, who was appointed this week.
Leonard denies this is a downgrading of marketing’s role and points out that every board member, including himself, Hughes and FT Group chief executive Olivier Fleurot, has marketing experience. A spokeswoman adds that the consistent global brand communications package developed under Willoughby is to be implemented through more targeted local activity.
SG Securities media analyst Anthony de Larrinaga says: “The FT does have the potential to establish itself as a global brand. I think it can cross borders – and into other media as well online.” But he questions whether there is much scope to develop Pearson’s French and Spanish newspaper interests. Last week Pearson was forced to dismiss reports that it is evaluating its stake in the joint venture German-language product FT Deutschland as “speculation”.
When Pearson delivers its interim results on July 28 there should be some indication of future plans for its foreign investments and whether the FT has managed to arrest the decline in its ad revenue.