“Selleris a column written by the sell side of the digital media community.
The Financial Times has long avoided chasing after programmatic ad revenue on the open web.
Instead, its focus has been on cultivating long-term, direct deals with advertisers by using first-party audience data and publishing contextually relevant editorials for in-demand audience segments, such as CEOs. business and high-income people.
Now, with the loss of signal sparking a revival of contextual targeting and direct deals – and with the momentum behind attention metrics, of which the FT was an early proponent since 2015 – the company’s longstanding strategy editor seems premonitory.
“The market continues to move towards us, instead of us innovating towards the market,” said Brendan Spain, FT’s vice president of advertising for the Americas.
Spain spoke with AdExchanger.
AdExchanger: What are FT’s main ad revenue drivers and have they changed recently?
BRENDAN SPAIN: Printing has had an incredible rebound since the dark days of 2020. It’s up almost 40%. Digital signage is booming and represents approximately two-thirds of our advertising revenue in the United States. Our growth in 2022, which is in the mid-double digits year-over-year, is driven by the rebound in print and consistent annual growth over the past four years in display digital.
We haven’t seen strong growth in sponsored digital content and co-created content. Content is probably 15% of our advertising business in the United States. On the content side, we focus on multi-year, cross-platform customers who are more likely to renew with us. We’re not going to chase after $20,000, $30,000 deals where the juice isn’t worth it.
How much of your digital revenue comes from programmatic on the open web?
Zero. Ninety-six percent of our digital revenue is direct, and the remaining 4% is primarily programmatic direct or programmatic guaranteed, with the remainder being PMPs.
Advertisers come to us for our context and our followers. We tend to sell, or at least have an 80%-85% success rate, to high-demand segments such as financial advisors, affluent audiences, institutional investors and luxury buyers. If you go through our programmatic channels, the likelihood of you getting this inventory is not very high.
Is it a priority to do more transactions on private markets?
It is a very small part of our activity. It’s often client-by-client requests to test effectiveness, and then buyers typically jump straight to direct deals because they don’t see the scale they want through programmatic waterfalls. We haven’t even enabled header bidding. We work exclusively with Google AdX.
We’re happy to set up clients with a PMP in the investigation phases, but if you want to spend $100,000 on a PMP to target financial advisors, we’ll say no, because it’s a waste of time. for both of us.
Do you have any new initiatives or emerging channels of interest?
The way we think about advertising hasn’t changed dramatically in the past 15 years. During this period, the market has constantly tried to innovate on programmatic, to offer lower CPMs and more scale. And now it comes down to privacy, direct relationships, context, quality, and ensuring that your advertising dollars aren’t wasted.
We try to innovate in terms of quality, engagement and provision of data, context and referrals, as opposed to the number of ads we can fit into a pre-roll. If you think KPI by KPI, you end up innovating to become an ad tech company, which is not what FT is.
How important are subscriptions to your bottom line and to your first party data operations?
When people sign up or subscribe, we ask them what industry they work in, their job title, and what role they hold. This is first-party reported user data that we use to target ads, but also allows us to tailor content to the user. When you pay $600 a year for a subscription, we want to make sure we show you what matters to you.
Subs are a big part of our revenue, but we’re having issues with churn and pricing issues, especially in the US where they’re very competitive. We don’t have the same well-known brand there as we do in the UK or Europe, and it’s $20 a month for The New York Times and $1 a week for The Wall Street Journal. But we see the US market as our biggest growth opportunity.
How do you protect your advertising business against a possible recession?
Of course, I fear a recession, but we operate modestly, we rely on so few outside resources and we have invested well during this bull market. We might also be somewhat insulated from the worst effects, because we’re not dependent on the DTC ad dollars sought by mass-appeal publishers.
This little bump in the road is not something that would affect us long term. When the coronavirus hit in 2020, we had very frequent and very concerned conversations with marketers and agencies, and those conversations are now not happening with the same frequency. We’ve had a few scenario planning requests through the end of the year, but we’re not having the kind of “don’t fill out this RFP” conversation we had in March 2020.
Will attention indicators finally become widespread?
I’ve been involved in attention since 2015. We led the charge on attention with cost per hour (CPH) years before anyone was talking about attention, and obviously we were way too early, even though we have ran successful campaigns. We haven’t actively sold CPH for about three years.
But we are at a tipping point, not just on the sell side and among ad tech vendors, but on the buy side. One reason is that agencies and clients won’t have as many choices when buying audiences, so they’re looking for quality attention. The other is that the viewability and CTR game has made its way into the system, and attention is a new metric that people are still trying to figure out how to play.
Do you think we’ll see attention adopted as an industry-wide currency?
I wish there was an agreed unity of attention, but there are so many different stakeholders. How to get everyone to agree on a definition of attention?
This interview has been edited and condensed.