Rupert and Lachlan Murdoch were both at the News UK headquarters in London’s “Baby Shard” at the same time this week. “You can just tell” when the moguls are there, one member of staff told us when we visited. People are scurrying around. The meeting rooms are all booked out.
On the commercial team, the executives don’t have to pretend to look busy. They genuinely are. News UK Commercial’s managing director Dominic Carter sat down with Business Insider to talk about his plans and ambitions for the coming year — and there’s a lot in the works.
The department, which sits under its ultimate parent, News Corp, has gone through an upheaval over the past few months. News UK Commercial managing director Paul Hayes left the company in 15 years in July, replaced by the department’s commercial director, Carter.
He quickly set about reorganising his divisions. It has been split into a sales division under sales director Karin Seymour, responsible for speaking to agency planners and clients, and a campaign management, solutions, and branded content team under Tiffanie Darke, who led the launch of the company’s in-house branded content studio Method last year. The re-org has also seen some key departures, including chief creative officer Nick Stringer, and director of strategy Abba Newbery.
And then there’s the none-too-small matter of Rebekah Brooks — the company’s former chief executive back when it was called News International. She left in 2011 at the height of the News of the World phone-hacking scandal and has returned to lead the business once again. In fact, Carter gets called out halfway through our interview for an urgent chat with Brooks. Despite his packed schedule, he graciously adds 15 minutes to the end of our allotted time — making him late for a 10 a.m. meeting — to make up for it.
In the few months he’s been in the role Carter has already been involved in a number of game-changing projects. The company — famed for being one of the first to trial a paywall, with The Times — began exploring new distribution methods and making more of its content free. News UK acquired Unruly Media. And he hints that there are more announcements coming in around a month’s time.
Advertisers may have ‘re-weighted’ their media too far towards Facebook
Carter also has a bolder ambition. He wants News UK and the wider newspaper industry to get better at proving its value to advertisers — marketers who are often tempted by the shiny new platforms, all competing for both eyeballs and revenue: Facebook, Google, Snapchat, Apple. Those are the kinds of companies the newspaper industry has learnt it has to work with (for distribution) and against (for ad revenue) in equal measure.
Spend on desktop internet ads eclipses that of newspapers.
Some of that spend is with newspaper brands, of course, but internet giants dominate in terms of market share of digital ad revenues. News Corp UK and Ireland’s annual accounts filed with Companies House don’t split out digital revenues. The company reported turnover of £1.2 billion ($US1.8 billion) for the year ended June 2014, down 3% on the prior year, and an operating loss of £3.5 million ($US5.4 million) as the company spent more than £100 million on legal costs related to the phone hacking scandal and financing its new Management and Standard Committee.
Carter says he’s “not about to destabilize Facebook” but that News UK and the rest of the newspaper industry needs to “be clear where we add value and tell that story better.”
That might include providing dashboards (as the internet giants have done) so marketers can better attribute their advertising success, or producing more econometric research showing that newspaper advertising delivers a return on investment for advertisers.
“I think there’s probably been a bigger shift of money to some of those [online] platforms than there needed to have been. But there will be a correction at some point. I’m not saying it will all tip back to newspapers, but it will definitely change,” Carter said.
Part of telling newspapers’ story better will include shouting louder about the level of engagement consumers with its brands and content compared to those internet platforms. The company has attempted it before with its Project Footprint research that highlighted the correlation between what people read on The Times online and their consequent online behaviour, but Carter said the industry needs to work together. It’s hard for one newspaper to make a currency accepted by the entire market.
Carter said: “I talked to Facebook in the US and we asked the question about how long people spend on it every day. In North America it’s about 45 minutes a day. And on how many occasions do they come to the site? It’s about 40. You start to put that in context: If someone is reading The Sun for 30 minutes, The Times for 45 minutes, or on tablet for 40 minutes in one session. That’s a large amount of time doing a singular thing and there has to be a value to that, rather than someone that’s dipping in for two minutes at a time, and each time they come in they could be confronted with hundreds of new messages.”
He continued: “Facebook works for advertisers for the most part, it’s got cut-through, it’s a fantastic, interesting business. Everyone talks about Facebook and it has a role to play just as every business has a role to play. But what [marketers have] probably done is re-weighted [their] media probably too far [Facebook’s] way than I think they should have. If you’re not trying new stuff, you’re not moving forward. But then you find a way to rebalance. I think that’s important with the complexity of media, and the choice of media, and with econometric modelling perhaps not as sophisticated as it needed to be. And there’s a role newspapers can play in that attribution, more directly, and that’s something we need to do as an industry.”
Breaking down the paywall
News UK has also been “trying new stuff” of late. The company became one of the first to erect a digital paywall in 2010, for The Times and The Sunday Times, and in 2013 The Sun’s digital content went behind a paywall too.
The Times has 152,000 digital subscribers, The Sunday Times has 154,000 digital subscribers, and The Sun has 225,000 digital subscribers, according to the most recent figures released by the company.
But since July, The Sun has experimented with lowering its paywall, allowing free access to some stories. Carter says the paper has also been experimenting with producing content especially for social networks like Facebook, Twitter, and Instagram to test the audience appetite.
That appetite has been “good,” according to Carter. And it’s allowed News UK, like BuzzFeed has done, to talk to advertisers about its “total audience number” as opposed to just the people who are visiting its websites and buying its newspaper.
News UK is a partner of Facebook’s recently announced Instant Articles and it is looking at Apple News. It wasn’t always that way. A year ago, the company’s chief marketing officer Chris Duncan told Business Insider that publishers posting their articles direct to Facebook would be a “tax on navigation” and a “tax on audience.”
Carter says News UK was a “different business then.”
“The culture of the business, and my department, has to be a lot more one of experimentation … so therefore we need to look at all the opportunities to get our content out there to as many people as possible and to remain profitable. We need to be consumed by more people and to continue to grow in an experimental way,” he added.
Carter said after its experimentation, News UK is still deciding what form The Sun’s paywall will take in the future. Discussions are taking place right now as to whether to go free, or continue with the blended model.
Partnership announcements to come?
One of the ways The Sun attempted to encourage readers to pay for subscriptions was by obtaining exclusive rights to broadcast Premier League soccer highlights via its Sun Goals app. This has since extended to showing FA Cup and Champions League highlights too.
But that “exclusivity” has hit a snag with the rise of apps like Vine, where football fans post clips of goals sometimes moments after they are scored. Sometimes The Sun Goals app can take up to eight minutes before it broadcasts the same goal.
It has been reported that The Sun paid £30 million ($US46 million) for Premier League rights, with analysts estimating The Sun’s digital offering would need to attract around 300,000 digital subscribers to cover the costs and the reduction of display advertising in order to break even. The Sun’s former editor David Dinsmore told Business Insider back in November that goals posted to Vine was an “issue” and that Twitter, which owns the app,” would “need to step up” in the area of rights protection.
That doesn’t seem to have happened. We asked Carter what happens next.
He said: “We have the rights until the end of this season. Next season, we might have something different. But you have to remember, The Sun bundle wasn’t just clip rights and the cost of content in isolation … its Sun Perks benefits for families and individuals, it’s clip rights, you look at it as a bundle, a combination of things. I think on one level it has worked. Has it done everything if you looked at it in isolation? You’d probably say it’s done enough as part of a bundle. It’s up to us to work out how we continue to make it work for us.”
Could that include a different sort of exclusive broadcast partnership, like entertainment perhaps?
Carter smiles: “There’s more to discuss.”
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