For a company with some money, there’s no better opportunity for exposure than the Super Bowl. Just ask U.S. Bank, whose hometown of Minneapolis will host 125,000 visitors coming for the big game next week.
During the week of the event, it’s going to place ads that will “take over” a light rail station near the stadium, and Super Bowl-branded ATMs will let customers donate to the American Red Cross. It isn’t an official NFL sponsor, but it will be placing TV ads that will run locally during the Super Bowl pregame show, along with sponsored videos on Facebook, Instagram, Twitter and a Snapchat filter. It won’t be running national ads during the game. The bank is in its third year of a 20-year deal that gives it naming rights to the stadium hosting Super Bowl events. It was also a bank lender that helped finance the stadium.
“It’s an opportunity for us to expose existing and future consumers to the brand and tell the story of who we are as a company,” said Chris Lee, head of sponsorships for the Minneapolis-based bank. “This is our crown jewel, having our bank step onto a national platform — it’s an awareness play.”
By all accounts, it’s been a turbulent year for media. The alarming spread of fake news — whether for financial gain, pushing partisan agendas or sharing inaccurate information — has shaken audience trust in media both on and off social platforms.
Mounting pressure on Google and Facebook for their part in spreading fake news has taken its toll, with German, French and U.K. governments looking for ways to regulate tech companies. The platforms have launched fact-checking initiatives and invested in flagging extremist content. Most recently, Facebook has responded by distancing itself from seeming like a media company, demoting publisher posts in its news feed and asking its users to qualify which publishers are trustworthy in surveys.
Here are five charts on the state of trust in the media.
Trust in platforms reaches five-year low
According to Edelman’s “Trust Barometer 2018,” global trust in social platforms has fallen by two points since last year, while trust in journalism has risen by five points. (Respondents were asked to rank their trust in platforms on a nine-point scale.) This is a far cry from 2015, when trust in platforms was higher than trust in journalism.
Source: Edelman Trust Barometer
The report found that trust in platforms decreased in 21 out of 28 countries surveyed. In the U.K., trust in traditional media has increased from 48 percent last year to 61 percent in 2018, according to Edelman.
People disagree about whether social media is good for society
The same Edelman report found that in the U.K., distrust in social media platforms has been fueled by inaction on their part to stop unethical or illegal behavior on the platforms (70 percent) and the spread of extremist material (70 percent).
When asked if social media is useful for staying in touch with loved ones, nearly 70 percent of respondents said they agree with or are neutral on the statement, while 34 percent disagree that social media is a force for good in society.
Source: Edelman Trust Barometer
As a result, Britons want more regulation of social media platforms: 64 percent believe platforms aren’t regulated enough, while 62 percent fear platforms will sell their data to advertisers.
Audiences question traditional media’s agenda
There’s a healthy skepticism of media organizations, according to Edelman’s report. Globally, 66 percent believe media organizations are overly concerned with attracting big audiences rather than reporting, while 65 percent believe organizations would sacrifice accuracy in order to be the first to break a story. Just under 60 percent believe organizations would rather support an ideology than accurately inform the public.
In the U.K., 33 percent are reading the news less, mostly because they believe news sources are biased.
Source: Edelman Trust Barometer
Traditional media can improve at separating fact from opinion
Forty percent of people believe traditional media does a good job of separating fact from opinion, compared to 24 percent who believe the same for social media, according to a global report for Reuters Institute for the Study of Journalism.
Source: Reuters Institute for the Study of Journalism
There’s opportunity for the media to do a better job, with the report noting that partisanship isn’t a problem in itself but is disliked when it is dressed up in a news article to distort the truth. A more diverse media in terms of age, demographics and political and economic outlook would help, as well as highlighting the journalists’ fact-checking processes.
Trust in government correlates with media satisfaction
Global research from the Pew Research Center finds a strong correlation between satisfaction with the media and trust that the government will do what is right for its country. The gap is largest in Vietnam, Sweden and the U.K. In the U.S., there is no difference in media satisfaction between those who trust the government and those who do not.
The resurgence of the “Angry Birds” brand several years after the best-selling mobile game’s debut has prompted a change in how its parent company Rovio monetizes the latest iterations in the series.
Rather than continue to prioritize producing one-off, custom versions of the “Angry Birds” games for brands, the developer is turning brand partnerships into something more long term. Rovio wants more brands to spend on “live integrations,” the developer’s term for putting brands into its existing “Angry Birds 2” and “Angry Birds Evolution” titles.
“We used to have the premium activations like the ‘Angry Birds Star Wars’ game, whereas what we’re doing now are these timed events in the existing games that incorporate the brands,” said Miika Tams, vp of games at Rovio Entertainment.
The NFL, for example, launched a partnership for both “Angry Birds 2” and “Angry Birds Evolution” earlier this week to promote the Super Bowl. In “Angry Birds 2,” players can dress their flocks of birds in any of the 32 NFL jerseys and helmets to compete in Super Bowl-themed levels. In “Angry Birds Evolution,” meanwhile, gamers can win a new character called the Quarterback, created exclusively for the NFL. The Super Bowl-themed levels will run until Feb. 5 across both “Angry Birds” games, while additional NFL-themed levels will run in “Angry Birds Evolution” following the Super Bowl.
It’s difficult to sustain awareness for games, and it’s hard to make money from the free-to-play model, said Tams, unless developers can populate their titles with “new stories and constant updates” that keep people coming back.
By incorporating brands into its existing titles, Rovio can potentially strike more partnerships and consequently make more advertising revenue without the burden of having to produce full games for clients as it has done in the past. In the three months leading up to September, Rovio generated €64.3 million ($79.8 million) from advertising sales and in-app purchases, compared to the €40.1 million ($49.7 million) it made over the same period in 2016.
While Tams would not reveal what other brands Rovio is working with, he said the company would look to use future partnerships to piggyback on the hype for big events in 2018 such as the World Cup and summer blockbusters.
Rovio tried to tackle the freemium space in 2013 when “Angry Birds” was the hot property in the gaming space and the company’s valuations were at their peak. But newer brands “Candy Crush” and “Clash of Clans” exceeded the popularity of “Angry Birds,” pushing Rovio to adopt the microtransaction business model and regular updates those rival titles pioneered.
The switch had an immediate impact on Rovio’s fortunes last year, increasing sales at a rate of around 90 percent in the first and second quarters. In the third quarter, revenue from its games jumped 40 percent year over year, buoyed by better monetization of its top games, the company said at the time. Despite the growth, financial analysts have questioned whether Rovio can keep making money from the “Angry Birds” game as well as find alternative sources amid ongoing speculation of the company’s rumored initial public offering.
For now, the business is focused on the “Angry Birds” brand and getting in front of brands, Tams said, adding, “There’s a risk involved in the strategy — as there is with anything you do in such a competitive space — but Rovio believes we’re doing the right thing when focusing on the live integrations with the brands.”
Everyone talks about, and agonizes over, Amazon’s effect on the retail industry. And for good reason. But there’s a smaller, yet still mighty, transformation rippling through the industry that brands are bending to accommodate, and that’s the Stitch Fix effect.
CEO Katrina Lake is spearheading the future of personalization in fashion, a point of obsession for brands and retailers that know they can no longer offer up a generic user experience and still win. And while every apparel brand desperately wants to get to know the person buying and wearing its clothes on a more intimate level, Stitch Fix was modeled on the premise. It established a new type of retailer that asked customers for insights and feedback alongside their size and color preference for items, even the ones customers didn’t like or buy, in exchange for a clear value proposition. Stitch Fix, for its members, would eliminate the need to go out and shop for clothes.
The machinations of the Stitch Fix model rely on a combination of data science — machine learning, AI and natural language processing — and human stylists; on top of complex customer profiles built by data, stylists can layer the nuances of buying and wearing clothes. Striking that balance has led the company to its IPO. and to nearly $1 billion in revenue in 2017.
In response, other brands are scrambling to figure out how they can create a similar customer feedback loop using data science and promote a more personalized experience. We asked Lake to think about what it takes to be a data-powered retailer, what’s holding the industry back and where priorities should land.
Prediction: Human roles won’t vanish, even as AI dominates.
Stitch Fix’s Hybrid Design line of in-house apparel is created using a series of algorithms that identify white spaces in Stitch Fix’s inventory, then take successful trends, colors and patterns across clothing pieces and combine them into a series of new styles. For any designer working in retail, this could sound like a death knell.
But Lake said Stitch Fix’s ability to use people’s strengths alongside data science is the company’s secret sauce.
“The relationship we have with data science is not so much about client data as it is about the clients themselves,” said Lake. “So to be able to get to know people one-to-one and personalize Fixes to their needs, it requires that we really understand clients well and that we have a lot of information on them, which informs the inherent relationship around how Stitch Fix works. Because we have stylists and not just an algorithm, we get much higher quality data, and more involved and authentic data points.”
For instance, someone might buy a pair of jeans from their Stitch Fix delivery, and then tell their stylist that they only bought the jeans because they’re in the process of losing baby weight and want the jeans to fit. Right now, though, they don’t actually fit — so the stylist can then inform the algorithm not to take those jeans’ data and apply it to the customer’s profile.
“Our data is real, and effective. And people share this information because they know we’ll actually use it to deliver a good experience,” said Lake.
Prediction: Customer expectations are going to skyrocket.
Right now, we’re all used to seeing generic, “If you liked this, you might like this” photo dumps at the bottom of an e-commerce page, or getting an email in which a retailer boldly claims, “You’re going to love our new arrivals!” Arrivals that, of course, you very much do not love.
According to Lake, patience for such superficial excuses for personalization is wearing thin.
“Today, you laugh off a bad recommendation, but the bar is going to get much higher when it comes to what is expected from companies that are serving you recommendations based on your data, and what they actually understand about you,” said Lake. “Companies get away with inauthentic personalization and data that doesn’t make a lot of sense. In the future, all retailers should be able to anticipate better than they can today, whether that’s based on what you’ve liked on Instagram or your past purchases.”
Prediction: Experiences will actually evolve based on customer data.
As customer expectations increase, experience will actually catch up. There’s so much customer information that can be culled online that people willingly give up (whether it’s knowingly or not), that current retargeting efforts and recommendation bots are just the tip of what’s possible.
Eventually, that gap between customer information and experience will start to close.
“Historically, there’s been a gap between what you give to companies and how much the experience is improved. Big data is tracking you all over the web, and the most benefit you get from that right now is: If you clicked on a pair of shoes, you’ll see that pair of shoes again a week from now,” said Lake. “We’ll see that gap begin to close. Expectations are very different around personalization, but importantly, an authentic version of it. Not, ‘You abandoned your cart and we’re recognizing that.’ It will be genuinely recognizing who you are as a unique human. The only way to do this scalably is through embracing data science and what you can do through innovation.”
Prediction: ‘Client-centricity’ will become a pressing priority.
There are a lot of reasons why retail at large hasn’t caught up to the developments around what data science can do to serve a customer. Stores are closing, foot traffic is falling and when times aren’t good, experimenting with new technology takes a backseat.
It doesn’t help that these companies have legacy systems in place that would require a massive overhaul to change. But, according to Lake, time is running out for retailers to invest time and energy elsewhere.
“It’s a real challenge to invest in something new when you’re facing other challenges. People also don’t see how it will add value to their businesses. They can learn from what we’re seeing value in to improve the ecosystem overall, but it’s not super easy or straightforward,” said Lake. “But think about this ‘client-centricity’ of the industry. There are so many places where people can buy things today, that you have to think about everything from the lens of: ‘How is my customer at the center of everything?’ To be able to know, ‘This is the value we’re delivering to the client, and introducing this feature will be better for him or her,’ and to live and breathe that, is incredibly important.
Vox Media is investigating how a new weapon might eliminate malicious ads from its sites by 2019. Earlier this month, the publisher of sites including SB Nation, Vox and The Verge began testing sandboxing, a technique that loads its sites’ advertisements in separate windows, called iframes, to ensure the ads can’t do things like redirect people’s browsers to different websites.
The test was a response to a deluge of malicious advertisements that hit Vox Media’s sites, which automatically redirected visitors to a page that asked them to hand over personal information.
Publishers have been playing a game of whack-a-mole with fraudulent, malicious and scam advertisements for years.
“We’d had enough of it,” said Dave Pond, Vox Media’s gm of display and programmatic. “In the past, publishers have relied on their tech partners, who have helped them monetize and understand that part of their business. We’ve reached a stage where they’re not necessarily doing enough.”
By and large, sandboxing is an effective method of damage control, according to ad fraud researcher Dr. Augustine Fou. But it comes with opportunity costs. For example, advertisers dislike the technique because it limits the ability to verify that their ads run where they were supposed to. Sandboxing can also prevent users from clicking through on ads, rendering a huge swath of display inventory useless.
An IAB-sanctioned version of sandboxing called SafeFrame, which Vox Media is also testing, solves some of those problems. It is also discussing alternatives to sandboxing with some of its biggest advertisers. If an advertiser were to agree to buy Vox Media inventory using a private marketplace, for example, it may remove the sandboxing, thereby giving advertisers more flexibility.
In testing this technique, Vox is effectively taking money out of its own pocket, a short-term cost it says it’s willing to endure for the time being.
“It’s a better long-term play,” Pond said. “We’re a premium site, and our users are the most important part of that business.”
Sandboxing doesn’t guarantee protection. The worst actors in the ad tech ecosystem will sometimes change how offending advertisements look and behave during periods of the day when publisher ad ops teams are likely to be away from their desks. An ad that looks and functions safely from 9 a.m. to 5 p.m. may behave very differently outside of normal business hours; mobile redirect ads are served often on evenings and weekends.
The sandboxing test supplements other efforts by Vox Media to combat this problem. It has a dedicated Slack channel, Twitter account and email address where site visitors can send examples of scammy or malicious advertising; a team of ad operations specialists spends chunks of its day hunting for these ads and addressing them.
Vox is taking this fight to the programmatic ecosystem’s other players. Last year, it made scorecards for each of the advertising exchanges it participates in, giving each of them a benchmark volume of scammy ads that it finds unacceptable. Those that can’t limit the volume of bad ads they distribute may find themselves losing Vox as a partner.
“We believe in the pipes,” Pond said. “But we sat on the sidelines a little too long.”
This week, Wieden + Kennedy London fired chief strategy officer Paul Colman, a global partner who spent more than 10 years with the agency. “I can confirm that Paul Colman will no longer be working at W+K London,” said an agency spokesperson. Paul Colman The representative declined to elaborate on the reasons for Colman’s abrupt…
With its leap into the electronic health-records field, Apple Inc. is trying to solve a problem that has vexed tech companies for years: simplifying disparate networks of medical information and putting more data into the hands of consumers.
The Guardian won Publisher of the Year at the Digiday Awards Europe last night, one of seven organizations honored in the Grand Prix category.
Decided by public vote, Publisher of the Year honors the publisher that best displays original thinking, creativity and overall excellence in its approach to publishing and media across all editorial efforts. In the last 12 months, the Guardian has pivoted away from advertising-focused revenue to a reader-focused revenue model. This has paid off, as Jess Davies writes in a new Digiday feature.
“We’re making great progress with our three-year strategy and on track to break even by 2019,” said Guardian Media Group CEO David Pemsel. “The media sector remains challenging. However, our reader revenues are growing well, our advertising proposition remains strong, and more people are reading us than ever before — we now reach over 150 million unique browsers each month, and we have over 800,000 supporters.”
The Digiday Awards Europe recognize the publishers, advertisers and technology platforms bringing about change and innovation in the European market. View the full list of winners and check out their work below. You can also see the winners of the Digiday Content Marketing Awards Europe, which were announced at the evening’s gala as well.
PUBLISHING
Best Use of Multimedia Vice Media and Chanel – “The Fifth Sense”
In this video series, which ran on Vice Media’s youth-oriented vertical i-D, women creatives from a variety of disciplines shared their work, processes and perspectives. Then, they created a project for “The Fifth Sense,” inspired by Chanel’s Chanel No. 5 L’Eau fragrance. See the full series here.
Best Use of Video Content
Maximum Media – “The Joe Show”/”SportsJoe Live”
Maximum Media created Ireland’s first live chat shows on major platforms, including Facebook, Twitter, Instagram, Snapchat and YouTube. “The Joe Show” is a chat show for the digital era: It features viral news, celebrity interviews, live music and viewer interaction through giveaways. “SportsJoe Live” focuses on sports, featuring interviews with athletes and highlights (and lowlights) from the week.
ADVERTISING
Best Brand Partnership Vice Media and Chanel – “The Fifth Sense”
Best Native Advertising Campaign
Venatus Media, Mindshare, Rovio and Radox – “Venatus Angry Birds”
Based on the enduring success of the mobile game “Angry Birds,” personal hygiene brand Radox created its own game to promote its newest line of shower gels, Scent Touch. In the game, players use the familiar “Angry Birds” slingshots to release shower gels, a play on the campaign’s tagline: “Released by touch.” Play the desktop game here.
Best Use of Social Media
AnalogFolk, Giphy and PG Tips – “Morning Moods”
To connect PG Tips’ black tea portfolio to how tea drinkers feel when they wake up in the morning, digital creative agency AnalogFolk created a series of GIFs, in partnership with Giphy, featuring the brand’s iconic Monkey in a variety of moods, ranging from ecstatic to grumpy. View all of Monkey’s morning moods here.
Best Brand Video
Expedia Media Solutions and Visit Britain – #OMGB Tourism company VisitBritain wanted to draw attention to more than just London with its #OMGB campaign. In partnership with travel booking website Expedia’s advertising arm Expedia Media Solutions, VisitBritain created travel guides highlighting the cultural experiences, landmarks and events in different regions in the U.K.
Best Programmatic Advertising Platform
Quantcast – Quantcast for Brands and Agencies In an often confusing and cluttered media landscape, technology company Quantcast positions itself as a partner to brands and agencies eager for brand-safe environments.
Best Branded Content Series
Channel Mum and Iceland – “Power of Frozen”
Frozen food brand Iceland had a brand-imagery issue: It was perceived as low-quality food with little nutritional value. With the help of parenting platform Channel Mum, Iceland worked with a variety of family influencers to show that Iceland products are both healthy and cost-effective. It has produced over 100 pieces of branded content with Channel Mum, with more to come.
TECHNOLOGY
Best Publishing Platform
Ve Global and Athletics Ireland – The Dublin Virgin Media Midnight Run After a successful Great Dublin Bike Ride, Athletics Ireland turned once again to Ve Global to increase sign-ups for the Virgin Media Night Run, which is a course run through Dublin’s city center. Ve Global used its suite of capabilities in on-site engagement, programmatic display and email remarketing to increase sign-ups. See how the night turned out below.
Best Video Advertising Platform Twitch & Kellogg’s Crave Kellogg’s wanted to make its chocolate cereal Krave the go-to snack of gamers. To break through to this difficult-to-reach, often cynical audience, it worked with livestreaming website Twitch’s custom solutions team to create a series of ads showing the cereal mascot Chocovore invading the gaming streams of popular Twitch gamers. Watch Chocovore in action below.
Best Mobile Advertising Platform Taptica Taptica’s mobile advertising ecosystem has become the tech of choice for clients who rely heavily on reaching people on the go, including Starbucks, HBO Go, Orbitz, Lyft and OpenTable.
Breakthrough Creative
Weber Shandwick and ActionAid UK – #BrutalCut
Three million Kenyan girls are at risk of female genital mutilation. U.K. charity ActionAid enlisted the help of agency Weber Shandwick to draw attention to the effects FGM has on girls’ lives. Popular vloggers and publishers “cut” their video content with a short message from a Kenyan girl at risk of FGM. The effort helped ActionAid secure millions of pounds in funding to create safe havens for girls at risk of FGM.
GRAND PRIX AWARDS
Agency of the Year – iProspect iProspect has brought digital chops to a variety of leading European and international brands, including Eurostar, John Lewis, Diageo, Santander and Specsavers. See how the agency delivered for Eurostar below.
Publisher of the Year – The Guardian The Guardian’s move to a reader-focused revenue model after years of struggling to break even seems to be paying off. According to a report by The Economist, the newspaper will hopefully be back in the black by next year.
Consumer Campaign of the Year – PMG and Beats by Dre: “Be Heard”
Beats by Dre is well-known in the U.S., but its agency PMG wanted to extend brand recognition into Europe, too, specifically in the U.K. PMG tapped into British sporting culture by collaborating with Sky Sports, the broadcaster of the Anthony Joshua-Wladimir Klitschko boxing match. With access to Sky Sports’ production process, PMG was able to deliver a brand experience that closely linked Beats by Dre to Joshua’s victory.
B2B Campaign of the Year – Viacom International Media Networks: Viacom Velocity Showcase Viacom Velocity is Viacom’s in-house brand agency, designed to serve clients with the full suite of Viacom capabilities, including insight, entertainment and multiplatform distribution assets. For Viacom’s annual showcase, Velocity created a multimedia art gallery featuring characters from popular Viacom shows. See the gallery in action below.
Video Team of the Year – Unilad What started in a Manchester, England, bedroom in 2015 as a content curation vertical on Facebook has turned into nine channels, including tech, food, sports and lifestyle, of original content production. Unilad is Facebook’s most engaged page globally, according to Forbes. (Soccer player Cristiano Ronaldo’s page comes in second.)
Content Studio of the Year – Twitch Custom Solutions Team
Live video is a prospect that would scare even the hardiest of brands, but Twitch has worked hard to educate potential clients about its comment moderating system and ensured that gaming influencers resonate with the brand’s target audience. The approach has helped Twitch expand its client portfolio, which includes both gaming- and nongaming-adjacent brands.
Brand of the Year – Benefit Cosmetics In 2017, Benefit Cosmetics distinguished itself from other beauty brands by reaching out to an underrecognized segment: mothers. Collaborating with influencers on the Channel Mum platform, it created the series “Wake Up to Makeup,” which included makeup tips specifically for busy mothers. See the case study video for the partnership below.
If you use an iPhone, you’ve probably gotten Apple Inc.’s out-of-iCloud-storage alerts, and you might even pay for more iCloud storage—but do you understand how iCloud works?
After two battle-weary years in which The Guardian cut costs and halved losses, the publisher is starting to turn a corner. Today, it has a new reader-revenue driven business model and is on the brink of breaking even.
Getting to this point hasn’t been easy. The Guardian has been forced to downsize and rein in its global ambitions. But a shift to a unique reader revenue model that relies on voluntary contributions as opposed to restricting access has, in many ways, proved naysayers wrong.
Today, The Guardian, coming off a redesign, can confidently say it is on firmer footing than it has been in years. The Guardian has halved its operating losses compared to two years ago, now looking at breaking even by 2019. Perhaps most critically, it no longer relies on advertising for the majority of its revenue. In recognition of its comeback, The Guardian was named publisher of the year at the Digiday Awards Europe on Jan. 24.
“We’re making great progress with our three-year strategy and on track to break even by 2019,” said Guardian Media Group CEO David Pemsel. “The media sector remains challenging. However, our reader revenues are growing well, our advertising proposition remains strong, and more people are reading us than ever before. We now reach over 150 million unique browsers each month and we have over 800,000 supporters.”
No longer chasing reach
When Pemsel and editor-in-chief Katharine Viner laid out their three-year cost-cutting plan in 2016, weaning itself off chasing reach was the top priority. The Guardian’s mantra of open journalism naturally lends itself to big audience numbers, with the publisher attracting 23 million monthly unique users in the U.K. and 31 million in the U.S., according to comScore. But as many publishers have found, big audience numbers don’t necessarily equate to revenue — a fact the Guardian has been candid about from the start.
“One of the core parts of this three-year plan was to build deeper relationships with our readers and not be so obsessed about reach,” Pemsel said in an interview with Digiday.
A total of 800,000 people now pay money to the Guardian, 300,000 of which are regular paying members, up from 50,000 two years ago, when it started offering paid memberships. An additional 200,000 subscribe to the digital and print editions and readers have made 300,000 one-off contributions, according to the publisher.
“The Guardian has undoubtedly exceeded everyone’s expectations,” said Alice Pickthall, media analyst at Enders Analysis. “In the long term, they need to find more ways to monetize their audience than just charity, but committed digital subscribers, not just supporters.”
The publisher has experimented with using data to see what topics people are most interested in, then solicited donations around related events and coverage. That approach has worked particularly well in the U.S.
“The U.S. market is very different in terms of people’s propensity to contribute, so we’re no longer just beholden on advertising there,” Pemsel said. “We’re at the foothills of what we can do [with donations and paying members], and we’ll keep testing and learning our way through generic and topic-specific contributions.”
Reining in costs
Journalism faces a cost problem. The revenue-per-reader in advertising is a fraction of what it is in print. That’s led to a reckoning that news publishers can no longer try to do it all.
Naturally, cost-cutting across the board has been front and center of the Guardian’s pivot to building a sustainable business model. The publisher’s pledge to cut 20 percent of its costs within three years, began with scrapping plans to transform the 30,000 square foot Midlands Goods Shed (a former train depot) at King’s Cross into a dedicated events space. Guardian Media Group also sold its 22.4 percent stake in Cannes Lions owner Ascential for a total of £239 million ($339 million.) Another wave of cost savings were made from job cuts, 400 in total, leaving the current staff count at 1,500 people.
The publisher then started looking at where it could cut back overseas, specifically in the U.S. Last year the Guardian’s U.S. offshoot underwent a severe course correction. After a buoyant U.S. launch in 2014, the publisher was forced to cut 60 staffers; the head count now stands at 80. The publisher reduced office space costs as well, relocating employees to a WeWork office in New York City. A core reason for the heavy trimming: The U.S. edition was set up to be mainly ad-driven. The U.S. operation brought in $15.5 million in revenue in the year ending April 2016, only to lose $16 million. This year, the U.S. office will make “a positive contribution” to the Guardian’s profits, according to Pemsel.
“However difficult it was [making cuts], the U.S. remains an incredibly important part of The Guardian, both editorially and commercially,” said Pemsel. “It’s just that it was being built primarily at the time for an advertising-only outcome, and the dramatic changes happening in the U.S. market around digital advertising meant it was just not sustainable within the financial framework we had set.”
Last January, Evelyn Webster was appointed interim CEO of Guardian U.S. She oversaw big internal changes and the diversification of revenue streams with reader revenue. Of the 300,000 one-off contributions made to The Guardian, half of them came from the U.S. Its biggest day for U.S. contributions was Donald Trump’s inauguration, according to the publisher.
As many publishers have found, the days of spending millions to expand into a new market and hoping they deliver a return through advertising alone are probably over. They certainly are for the Guardian, which instead is more interested in putting relatively small, agile teams into new markets and seeing if readers can fund them, according to Pemsel.
This has come with other cuts, of course. Last week, the Guardian shrunk its print edition from the Berliner format to a slimline tabloid and outsourced the printing and distribution of the paper to Trinity Mirror Group. That will shave “several million” off its cost base, according to the publisher.
Taking a stand
Despite its focus on reader revenue, advertising remains core to the business, and the Guardian has cracked down on bad practices, particularly in programmatic advertising. It remains the only publisher to take a serious stand against an ad tech vendor over hidden tech fees, and its lawsuit against Rubicon Project is ongoing. But it has also called for more industrywide action to tackle fraud in digital advertising. Now, it is using data to identify high-value buyers in the open market and switch them to premium programmatic. The publisher claims this tactic has grown yields while ensuring more of advertisers’ dollars go to working media.
Agencies are bullish on the Guardian’s ability to retain high-quality services to them, despite the job cuts. “When a company that large is going through such massive change, you will inevitably see a drop-off in servicing,” said Craig Smith, trading director at media agency Mindshare. “But to their credit, we never saw anything like that, despite the fact it was probably a tumultuous time as a business in terms of how they dealt with us.”
The Guardian has also overhauled its commercial structure and external messaging in the last two years, positioning itself as a “platform for change” that will deliver meaningful business results for advertisers, not vanity metrics like click-through rates. That clarity of message, along with its success with reader revenue, puts it at the top of the list for agencies, Smith said.
The publisher has also revamped its branded content operation, Guardian Labs, in the past year. The former in-house agency model has been dropped in favor of a commercial features desk led by new executive editor Imogen Fox. As a result, its win rates on briefs have doubled, according to the publisher.
Keeping up culturally The Guardian operates differently today than two years ago. Of course, it’s smaller, having reduced its head count by 400 people to around 1,500 during that time. But beyond that, the Guardian has implemented in the last few years a process to get departments to collaborate with each other and ensure its products evolve faster — a departure from its formerly siloed structure, similar to many legacy businesses.
Dozens of cross-department huddles occur each month, with people from commercial, editorial, product, marketing, engineering and user experience meeting with a set problem to solve. Every three months, they give progress updates. The process, borrowed from Google, has been instrumental in shaping the Guardian’s current model. The idea of asking for donations as an alternative to a paywall came from one of these huddles, for example.
In addition to those moves, the Guardian has also invested £42 million ($59 million) in venture capital fund GMG Ventures to stay abreast of technologies like artificial intelligence that are set to change news distribution.
