Engagement and loyalty increase revenue – on and offline | Sustainability | guardian.co.uk

Guardian News & Media has made a strategic decision to move beyond its traditional newspaper roots and focus on becoming a digital-first company.

This means putting more energy into developing guardian.co.uk and other digital platforms, and switching resources away from the Guardian and Observer newspapers.

The philosophy that will drive the digital expansion is based on the concept of editorial "openness", which the Guardian has championed under editor-in-chief Alan Rusbridger.

"Open" describes a form of journalism that is in tune with the spirit of the web: mutualised, collaborative and networked.

Rusbridger says this is part of a wider shift in business, government, education and society towards more open ways of doing things which link to, and harness the capabilities and potential of the web.

To achieve commercial success from the push to digital, GNM acknowledges it needs to grow a much larger, more engaged digital audience in order to attract greater digital advertising revenues.

Andrew Miller, chief executive of GMG, says: "We have to build an open and individual relationship with the Guardian reader, delivering quality journalism as well as branded products and services that meet their different needs and interests at different moments. And we have to give commercial partners unrivalled access to this relationship so that everyone benefits.

"Simply growing our audience won't be enough. In an online world of 'commoditised' news we have to make ourselves distinctive, and we will be investing in our brand and marketing to achieve that and, critically, we need to have more engaged users.

"Engagement and loyalty drive average revenue per user. Our strategy increases engagement in two ways: journalistically, through our open, mutualised approach; and commercially, by building individual reader relationships and optimising them – using new technologies to deliver customised content andf recommendations.

"Importantly we are moving from a world where we relied on a relatively small number of large revenue streams to one with multiple, smaller revenue streams. We are targeting above-market growth in competitive categories such as display and jobs, and more aggressive growth in emerging areas like America, mobile apps and the Teachers' Network."

When developing the digital-first strategy, GNM directors quickly ruled out an exit from print in the short-term as the newspapers remain "critically" important in terms of reach, the relationship with readers and as a source of revenues.

But a general rule of thumb has been introduced that GNM needs to consider what we would be like as an organisation if 80% of our effort was on digital offerings and the remaining 20% on the newspapers. 

Rusbridger says "80/20" should not be interpreted too literally or mapped directly on to areas such as revenue targets and costs but that it is a broad, all-encompassing way of explaining the shift the organisation needs to make.

Some aspects of the transformation will happen more quickly than others. GNM is, for example, already a 70/30 organisation in terms of digital/print-only audience, with guardian.co.uk now enjoying more than 50m unique browsers a month, while the mix of revenues and costs will change much more slowly.

In order to redirect resources, savings will be made in print through the development of a new Monday to Friday newspaper which will lead to reductions in pagination and reduced costs.

The international editions will stop in the autumn as a cost-saving effort that is now possible because the Guardian is avaiable on digital platforms such as the Kindle and the Ipad.

The aim of the new Guardian weekday editions is to find the right print expression for the times; one that is differentiated from the web and that fits in with the way people are using print.

Research by GNM shows that half the readership now reads the paper in the evening and just 4% say they read it for breaking news, yet the Guardian is still built around the idea that print is the primary vehicle for news.

Rusbridger says: "The newspaper will be tighter and more focused on a smaller number of stories which will be covered in depth. It will be more like Newsnight than News at Ten – more about making sense of the news than telling you what happened sometimes 36 hours after the event. It will be as readable at 9pm as it is at 9am. It will also be a high-quality, premium product – something for which a premium price can be charged.

"When people get to read the newspaper, the majority already feel familiar with the gist of the main news of the day. What they want from their printed newspaper is to help them understand it, or to delve in greater depth into the stories of real significance. They want longer reads, context, analysis and commentary."

GNM will in due course also be looking at reorganising both the Saturday Guardian as well as the Observer.

via guardian.co.uk