The New York Times released an 11-page document last week outlining how it plans to double its digital revenues to $US800 million by 2020.
The release came days after the Times revealed it had reached the huge milestone of signing up 1 million digital-only subscribers.
Clearly, growing digital subscription revenue will go part of the way to help The New York Times achieve its goal. But just less than 2% of its 60 million unique visitors in the US are generating up to half of its $US400 million in digital revenue. The other half is generated by advertising.
And The Times’ has some big, bold advertising plans to help achieve that lofty $US800 million goal. Bold because the company is placing an increasing focus on a nascent form of advertising — native advertising, also described as branded content (the definition changes depending on who you talk to) — in the hope of making its ads as compelling to readers as its articles. If it can do so, The Times can begin charging a lot more than for the types of banners and pop-ups ever-more-frequently blocked by users. Some 63% of marketers plan to increase their native advertising budgets this year, according to a survey from the Association of National Advertisers.
The Times launched its “T Brand Studio” — a team of journalists, video producers, technologists, and strategists that creates and distributes native advertising for brands — in 2014. Big campaigns have included its “Women Inmates” interactive article to promote the new series of “Orange is the New Black” for Netflix, and another multimedia piece titled “In A Flash” for Nest.
All in all, the team has created more than 100 campaigns for more than 50 brands, and now almost 20% of digital advertising revenue is attributed to the T Brand Studio.
Sebastian Tomich, vice president of advertising for the New York Times, caught up with Business Insider in London to discuss some of his big plans for the unit for the years ahead.
The NYT wants to expand in Europe and Asia
This summer, T Brand Studio opened a division in London. It currently has four members of staff and is headed up by video producer Kaylee King-Balentine.
Tomich says T Brand Studio is targeted to double its revenue year over year. He won’t reveal the actual revenue figure, but adds that there are ambitions to build out T Brand Studio to a “nine-figure business” at some point. And he thinks London will play an important role.
That’s because London will act as The Times’ launchpad not just for UK and European branded content campaigns, but the rest of the world too. King-Balentine, who also met with Business Insider in London, told us that Asia will be a focus.
She couldn’t reveal names of advertisers, but said London already has campaigns booked, with the first work due to be released before the year is out.
Ambitions to bring on board more luxury advertisers
Another area of focus is the luxury category, which Tomich describes as “huge” in terms of the media and marketing landscape in Europe.
T Brand Studio’s pitch to all advertisers is “storymining” — helping brands tell the stories they may never have otherwise have told before. Tomich said that differs from what an advertising agency or even other publications’ content studios might offer because “The New York Times [staff] are the best storytellers on earth.”
“When we launched in the US, we knew it wouldn’t take long for others to introduce their own. But they can’t match our tech, our newsroom, and our talent,” Tomich.
King-Balentine admits there will be challenges in working with luxury brands, but that they can offer some of the best stories: “The biggest challenge, especially with luxury, is that [some advertisers] build that house, and they’re very protective of that house. But the best way is to start with the idea — find something fascinating that not only a brand’s audience finds interesting, but the general public finds interesting too. It could be the brand’s history, or it could be the way it builds its watch.”
The T Brand Studio wants to create “experiences” for mobile, not just articles
Much of the work the T Brand Studio has created to date has been interactive articles, created with a “mobile-first” mindset, due to the fact that some 58% of The Times’ readers are mobile-only. King-Balentine says the studio’s creatives have even already switched its normal notepads for mobile-shaped sketchpads, and the plan is to create more mobile “experiences.”
That could include creating apps or other mobile content that uses the camera, or the microphone, or a smartphone’s gyroscope to detect movement.
In August The Times also launched a new mobile advertising solution called “Mobile Moments” — a new format that references how a reader picking up their phone to read the news at 7am has a totally different mindset (and therefore requires more relevant, timely ads) than a reader that is checking out Times content at 9pm.
Tomich says The Times receives 28% of its traffic in the morning, hence why its Morning Briefing daily tip sheet on its mobile app has become a popular feature with advertisers. Similarly, T Brand Studio is utilising the “Mobile Moments” approach to tailor native advertising content to the time of day — “wake up” with Apple Watch in the morning, and “sit back” with the iPad Pro in the evening, for example.
“Mobile advertising is going to bring back great creative,” Tomich said, adding that the Times’ editorial ambition to become a “destination” for mobile users who actively choose to visit its apps and sites (rather than simply just being referred via social or search) will play to its strengths in advertising too.
The idea is to turn the studio into an agency in its own right
The Times memo released last week stated: “We are expanding T Brand Studio into an agency in its own right, providing a broader array of marketer products and services around content ideation, creation, and distribution.”
It mirrors the approach taken by publishers like Vice with its creative shop Virtue, or HuffPost Partner Studio. It implies that not all content created by T Brand Studio need end up on The Times’ properties.
We asked how that might sit with the creative agencies that work with its advertisers, who may be perturbed that The Times is siphoning off some of their clients’ creative budgets.
Tomich says T Brand Studio isn’t trying to steal their business: “We are not trying to become WPP. We will never be the AOR [agency of record] for Coke. We can work at any part of the relationship. Sometimes we joke that there are 12 people on the conference call.”
But ultimately T Brand Studio does move The Times further up the table when it comes to having big strategic conversations with marketers. And that should afford the Times more of marketers’ spend.
Tomich said: “Campaign prices range from $US50,000 to the multi-millions. There’s no minimum spend. You can buy creative, distribution, awareness — like homepage advertising — spec-based projects. This business is not easily replicable. And it’s something the New York Times can be the best at.”
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