The Guardian reviews digital and direct advertising services

theguardian_officeSteve’s breakdown: We believe this review should be Global to reach the goals they have set. Give them a ring and see if that’s their thinking.

LONDON, UK & NEW YORK, NY: The Guardian is reviewing its digital and direct business and is said to be speaking to a number of agencies in order to build its own channels direct with consumers.

The Guardian declined to comment on the matter but it is understood the talks will explore an array of opportunities as they look to find a sustainable way of making money from online media.

The review, which is being run directly by the Guardian, will not affect its above-the-line agency, Bartle Bogle Hegarty, or media agency, PHD. MRM Meteorite currently handles the Guardian’s digital and CRM, and it is not known yet known if this agency will be replaced.

Like other publishers, money made from the Guardian’s digital inventory is cratering as print circulation declines show no sign of slowing, heaping pressure on the business to look beyond advertising to make money.

“They are facing some pretty big challenges from Facebook and Google around access to news content, so if they are looking to build their own channels direct with consumers it makes sense to review their digital and direct business” said Sarah Treliving, head of digital at MediaCom.

“There are so many different models that they could employ, there is an increasing need for a direct channel to a consumer outside of social, and there is huge opportunity in social as well – the Guardian just need to find the right opportunity for them.”

It comes amid the Guardian’s three-year plan the company to break even at an operating level by focusing on new revenue streams and a new membership proposal as well as a 20 per cent overall reduction in the cost base.

Despite the pressure, the Guardian has refused to erect a paywall, believing that the key to growth is understanding its most loyal readers rather than chasing casual readers. While it hasn’t come up with a definitive way to do this, it is exploring a number of different routes, starting with the creation of a membership scheme.

“They might be looking to build something similar to what the Washington Post have done which is a freewall concept, where they are not asking people to pay for content but are asking for an email address and registration in return for free content,” explained Treliving.

She also suggested that while the publisher is likely to understand what its readers and what they want, it might be reviewing its digital and direct business to be better at finding those audiences in external places and the creating a value exchange.

“Publishers and FMCGs are looking at ways of expanding their capabilities and content creation and there are businesses and agencies that have synergies with those needs,” she added.

“Newsbrands have got amazing content creators that know how to write for their audience but that are focused on a couple of platforms, but there are new platforms in mobile, social, native and companies that specialise in that, or big agencies that have all of the skills under one roof.

“Without any disrespect to the current agency roster, the Guardian are smart and they will want to take advice from a really broad spectrum of agencies.”

The Guardian’s reappraisal of its business strategy follows similar efforts from many of its rivals including News UK and the Telegraph Media Group. These legacy newsbrands are feeling the heat with the rise of challengers like Buzzfeed and Vice, as well as advertising revenues increasingly succumbing to media’s new powerbrokers Google and Facebook.

It’s why News UK chief executive Rebekah Brooks is leading a contingent of the publisher’s top executives to sell its new commercial proposition to agency bosses, and why Trinity Mirror’s chief revenue officer James Wildman has held meetings with a similar crowd to discuss a joint ad sales venture for newspapers. There’s more impetus now from these publishers to scrap traditional strategies and craft a story of why advertising in newspapers is still a good thing to do.

News UK also recently formed an in-house agency Pulse Creative which has assumed control of all creative communications for the Times, the Sunday Times, the Sun as well as the tabloid’s newly-formed betting business. The strategy was heralded by media executives as the future of the publisher-agency relationship with the two more willing to collaborate in order to maintain secure sustainable revenues.

“Because of the disruption of the industry there has never been a more appropriate time for clients and agencies to collaborate together, so the closer the working relationship the better” Treliving said.

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