A return to profit after four years in the red has sparked a review of FT’s brand and generated plans for a marketing push. By Mark Choueke
After four consecutive years of shedding profit and circulation, the Financial Times (FT) recently reported some heartening news. Last year, the specialist business title returned to the black with a profit of &£2m. With the decline in circulation slowing for the first time since 2001 and the arrival of new chief executive John Ridding two weeks ago, the newspaper’s management is optimistic.
Ridding has promised to examine every inch of the FT brand and product in search of improvement. An FT spokeswoman admits that the profit was achieved only by cutting &£100m-worth of costs, from staffing to technical costs such as paper and printing. “For four years we were in the red because of the worst advertising recession ever, but our ad revenue is now increasing again,” the spokeswoman says.
Perceived to be underperforming, the FT has been dogged by speculation in recent years. Some observers suggest a change of format would give it a fresh look and make it more relevant to consumers. Others suggest the FT will struggle to survive in the age of growing internet use, when chief executives and financial directors can wake up to Radio 4’s Today programme then access breaking news throughout the day on websites, as well as 24-hour television.
“Surviving will be a challenge,” says one press buyer. “Only about 138,000 of its 430,000 circulation is in the UK. [Free newspaper] City AM manages 80,000 in the City alone. The FT covers a highly specialist market, which is well-served elsewhere.”
Yet the FT is not subject to the peaks and troughs of a single-ad market. It claims that more people are buying its content than ever before. The spokeswoman adds: “In every market we compete with other business titles, for example in New York it’s the Wall Street Journal. We have a regional structure with specialist, localised marketing and editorial teams.”
Ridding, 40, has been at the FT for nearly 20 years, as a journalist, managing editor, Asia edition launch editor, and publisher and chairman of owner Pearson in Asia. His priority is to develop FT.com, where he has installed Ien Cheng, previously publisher at FTChinese.com, as publisher and managing editor.
The latest National Readership Survey figures show an estimated 28% drop in average issue readership for the FT newspaper between April 2005 and March 2006. But FT.com seems to have mastered ways of making money from internet content faster and more effectively than any other UK national newspaper website.
The ten-year-old website, which had 5.5 million unique users in March (audited by the online branch of the ABC), has three revenue streams: ad revenue, subscriptions and selling content. Paid-for sales of the newspaper are negligible, so a profitable online presence was crucial to the FT brand’s progress long before such a concept came to most media owners’ attention.
This income provides security for the FT brand’s future and indications that the company is about to focus more resources on marketing than at any time in the past 15 years suggest that the board is bullish.
Incumbent advertising agency Delaney Lund Knox Warren & Partners pulled out of an ongoing advertising review (MW June 22) in protest over the fact that the rethink is taking place after it spent years “babysitting” a low-spending brand.
While some in the agency world believe the newspaper has little money to spend, FT insiders scotch this rumour as “nonsense”, saying that while there is unlikely to be an above-the-line campaign including television, the review is significant.
One FT source says: “We’re looking for creative concepts for our global brand. We’re not a general interest title, like The Times, so we’re never going to have enormous TV campaigns. Just as we’re targeted in our readership, so we’re targeted in our advertising. Two-thirds of our circulation is outside the UK and most of that is in the subscriptions market, so most of what we do is driven by direct marketing.”
The source adds: “Our advertising is bought globally and if you want to reach the world’s decision makers you have to be with the FT, which is printed in 23 sites internationally and is on sale in over 140 countries.”
This point is echoed by several press buyers, one of whom says: “Luxury brand advertisers may go for the Sunday Times to be seen by sheer numbers, but they will always want to be seen in the FT, which carries prestige – even though it seems cost-inefficient because of the number of people who will actually see the ads.”
Most observers agree that Ridding would do well to further extend the FT brand worldwide and prioritise FT.com. Although circulation has been in decline for a while, the title is safeguarded by its position as a necessity to decision makers globally.