Free press empire goes on offensive

Metro International, the free newspaper group, controls an empire of Alexandrian proportions, with 29 editions in 16 countries stretching from Spain to Hong Kong. However, the publisher feels it has reached a critical point in its development and needs to start leveraging the brand in the consumer and business markets.

The decision prompted last week’s appointment of former News International marketer Toby Constantine to the newly created post of vice-president of global marketing and research, and the launch of Metro International’s first pan-European television advertising campaign on CNN International (MW last week).

Metro International, owned by Swedish company MTG, pioneered the idea of the free newspaper aimed at commuters with a Stockholm launch in 1995. Other publishers quickly realised the potential in free newspapers, including Schibsted, a Norwegian company that produces the newspaper 20 Minutes in Switzerland, France and Spain.

In the UK, Associated Newspapers, spurred on by MTG’s success on the continent, launched its own Metro newspaper in London in 1999. The move was also a defensive measure against a rumoured News International launch. At the same time MTG tried to crack the UK market by launching a title in Newcastle, but Associated had secured rights to the Metro name and licensed the name to the local newspaper group for a rival launch. Hence MTG named its paper the Morning News, but it never really took off and the company retreated. Metro International will not be drawn on whether a further attempt will be made to crack the UK market. However, it is keen to make much of the fact that it is a growing global force.

Constantine says: “I think Metro International’s business has grown to its current size in stealth mode. The business was keen not to get too much attention from other media owners, but is now at a point where it can begin to tell the story. We need to position the brand as a global media player.”

He adds that he will “probably” look to appoint a branding development agency and an advertising and media network for Metro International. Each territory also has its own agency relationships.

Most advertisers use Metro International as a local medium, but the company has had some success in attracting pan-European clients. It cannot provide coverage in Germany or the UK – although the company does have an informal relationship with Associated to help clients looking for UK reach.

Metro International delivers a young, urban readership aged between 15 and 44 years old, which is equally split between male and female readership. In April, the company opened Metro Solutions, an advertising division in London with a brief to offer integrated campaign ideas to potential clients.

Lawson Muncaster, vice-president of global ad sales, points to the &£500,000 September deal with British Airways as a good example of the division’s work. The airline put five Metro International editions at the centre of its “London is closer than you think” European campaign. Each edition ran a four-page London-themed flip cover section.

Muncaster points out that lining up central deals with “big brand advertisers” can also “alert local advertisers to the value of the newspaper”, creating a beneficial circle for all parties. The biggest client sectors are IT and telecoms, which usually run direct response ads and are able to quickly ascertain a newspaper’s effectiveness at securing business.

But free newspapers are not a licence to print money. Metro International’s model dictates that a publication has three years to break even or it will be closed – as happened in Switzerland and Buenos Aires. Metro International took until the second quarter of this year to report its first combined quarterly operating profit of $1.2m (&£700,000).

Metro International competes with free rivals in 21 cities and also faces competition from other news delivery services. As one insider points out, the wireless mobile phone is increasingly offering services such as internet browsing and news bulletins. If commuters could receive a signal underground they might start to read their e-mail via mobile phones or personal digital assistants. However, Constantine, who has also worked in online media, argues that tabloid newspapers offer an “easier reading format” and advertisers believe it is a more suitable vehicle for campaigns.

Distribution issues can always provide a headache. For instance, in Paris the civic authority was opposed to handing out free newspapers in certain public spaces, so Metro International resorted to distribution through cafés and bakeries.

Observers also feel that Metro International often falls down on its content. The formula is to offer bite-sized chunks of information derived from press wires, brightly colour pictures and a larger feature piece.

Compared with Associated’s Metro, which had a 64-page edition last week, some Metro International publications drop to 24 or 16 pages and appear “scrawny and uninteresting”, according to one observer. He adds that the company should be wary of any “weighty competitor that is not afraid of throwing a few million pounds at their editorial budget”.

Experts believe the market for free newspapers is still huge. Christian Toksvig, a former Metro International manager who is now working on Express Newspapers’ free publication project as business development manager, regards the paid-for press as conservative when it comes to launching products. He says: “There is plenty of room for innovation, in regard to size, pricing and distribution of newspapers. There are no sacred cows and Metro International and the other players have demonstrated that.”