Matthew Miller
May 11, 2012

VIDEO: Financial Times CEO John Ridding on data-fueled growth

Ridding cites the ability to examine the reading patterns of people just before they take the plunge and pay for a subscription

wide player in 16:9 format. Used on article page for Campaign.

When John Ridding started out as a reporter with the Financial Times more than 20 years ago, he couldn't imagine getting excited about data. Today, the topic we now call "analytics" puts a glint into the eye of FT's chief executive officer, causing him to wax eloquent about the "age of enlightenment" transforming his business.

You can understand Ridding's enthusiasm. In an era when even prestigious newspapers have fallen by the wayside, the Financial Times boasts many healthy vital signs:

  • More than 600,000 paid subscribers, of which more than 285,000 are digital subscribers.
  • More than 900,000 daily website visitors, a 36 per cent increase year-on-year.
  • The FT's web app, famously built outside of the Apple ecosystem in order to give FT full control of user data (not to mention avoiding a 30 per cent revenue cut for Apple), recently surpassed 2 million users less than a year after launch. It drives 12 per cent of subscriptions and 19 per cent of website traffic.
  • Most importantly, content revenue is destined to overtake advertising revenue, perhaps as early as this year.

The publication moved to a paid content model to get the revenue it believed its content deserved and to limit exposure to volatile advertising budgets. However, the move came with unexpected benefits. "We quickly came to realise that actually, the real power of the subscription relationship, the real value, comes from the data," Ridding told Campaign Asia-Pacific in an interview at FT's Hong Kong offices.

Information on readers and their actual habits is transformative. "You get much better and smarter about marketing, acquisition and retention," he said. "You can target advertising much more effectively. You can develop services and publications in a way that's much more relevant to readers' interests."

For example, he cites the ability to examine the reading patterns of people just before they take the plunge and pay for a subscription. By targeting people who later exhibit similar patterns, the FT can increase conversions "100 fold," Ridding said.

Similar techniques drive premium advertising rates, he said, citing a case study where Netjets, which sells fractional aircarft ownership, wanted to reach Europeans who spend more than €400,000 a year on private jet travel. Using behavioural targeting technology and a special content environment, the campaign achieved an astronomical clickthrough rate of 6.2 per cent.

Best of all, Ridding said, the revolution is just getting started. "One of the reasons I'm very excited about the machine and the model we're building is that in some respects we're only scratching the surface of what can be done, and we've got a lot to learn from other kinds of businesses."

The Oxford-educated Ridding (first class honours degree in philosophy, politics and economics) begins to sound something like a Silicon Valley entrepreneur, tossing in terms like "A/B testing" while describing the way digital pure plays, and how major retailers use systematic analysis of data to plan and execute in a virtuous cycle of consumer-focused iteration.  

Ridding calls mobile access in particular a "game changer" for the FT. Global growth for a publishing empire tied to the economic realities of paper, printing, and physical distribution is all but impossible, he indicated. "Now that we have mobile, smartphones and tablets, those constraints disappear, and we have profitable customers from day one. That also enables us to reach new reader groups."

Though he deftly avoids applying any adjectives to an audience that some might describe as stodgy or "of a certain age", Ridding acknowledges that mobile devices help the FT build affinity among strategically important groups of readers, including students.

"Major news brands are an emotional habit, a connection," he said. "And the earlier you get people familiar with your brand and your writing and your style, the more likely they are going to be with you a long time." Ridding cites a tool that allows students and professors to annotate and discuss online articles as one successful way the company is nurturing such relationships.

Along similar lines, FT in March launched an iPad app called the MBA Gym. The Chinese-language app, initially priced at RMB12 (RMB72 now), delivers training courses and special articles from the FT on topics such as the Euro crisis, the bond markets and the China property market. 

Success in China remains critical to FT's success. Ridding launched FTChinese.com in 2005 when he was editor and publisher for Asia. Although the learning curve was steep, today he is proud of the site's 1.76 million registered users and their engagement with the content. 

"The comments and the digital mailbag you get from our readership in China is inspirational," he said. The organisation produces local content in China, and Ridding fully expects to build on the profitable foundation FTChinese.com has established.

Ridding sees quality content as the common thread tying together all of FT's efforts, from the core business coverage to the How to Spend It app, which recently surpassed 100,000 downloads. 

"There is always going to be a magic and an art to great journalism," he concludes, melding the old-school reporter with the data-driven strategist. "But the machine behind it can and will be a lot more informed and scientific."

The article first appeared on Campaign Aisa

Source:
Campaign India

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