“The Sell Sider” is a column written by the sell side of the digital media community.
The Financial Times has long avoided chasing open web programmatic ad revenue.
Instead, its focus has been on cultivating long-term direct deals with advertisers using first-party audience data and publishing editorial that is contextually relevant to in-demand audience segments, like business leaders and high-income earners.
Now, with signal loss prompting a renaissance for contextual targeting and direct deals – and with momentum behind attention metrics, of which the FT was an early proponent going back to 2015 – the publisher’s longtime strategy seems prescient.
“The market continues to move to us, instead of us innovating towards the market,” said Brendan Spain, the FT’s VP of advertising for the Americas.
Spain spoke with AdExchanger.
AdExchanger: What are the FT’s main ad revenue drivers and have they changed recently?
BRENDAN SPAIN: Print has seen an incredible rebound since the dark days of 2020. It’s up nearly 40%. Digital display is going strong, and it’s about two thirds of our US ad revenue. Our growth in 2022, which is in the mid-double-digits percentage-wise year on year, is being driven by the print rebound and consistent YoY growth over the past four years in digital display.
We haven’t seen as strong growth in digital sponsored content and co-created content. Content is probably 15% of our US ad business. On the content side, we focus on multiyear, cross-platform clients that are more likely to renew with us. We don’t go chasing $20,000, $30,000 deals where the juice isn’t worth the squeeze.
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 mostly programmatic direct or programmatic guaranteed, with the rest being PMPs.
Advertisers come to us for our context and our subscribers. We tend to sell out, or at least have an 80% to 85% success rate, for high-demand segments like financial advisors, high-net-worth audiences, institutional investors and luxury buyers. If you come through our programmatic pipes, the likelihood of you getting that inventory is not very high.
Is it a priority to do more private marketplace deals?
It’s a very small part of our business. It’s often client-by-client requests for testing efficacy, and then buyers usually go straight to direct deals, because they don’t see the scale they want through the programmatic waterfalls. We don’t even have header bidding enabled. We work exclusively with Google AdX.
We’re happy to set clients up with a PMP in the investigatory stages, but if you want to spend $100,000 in a PMP to target financial advisors, we’re going to tell you no, because it’s a waste of both of our time.
Any new initiatives or emerging channels of interest?
The way we think about advertising hasn’t drastically changed in the last 15 years. Over that time, the market has constantly tried to innovate on programmatic, to offer lower CPMs and more scale. And now it’s swung back to privacy, direct relationships, context, quality and making sure your ad dollars aren’t wasted.
We try to innovate on quality, engagement and providing data, context and benchmarks, as opposed to how many ads we can ram into a pre-roll. If you think on a KPI-by-KPI basis, you end up innovating yourself into becoming an ad tech company, which is not what the FT is.
How important are subscriptions to your bottom line and to your first-party data operations?
When people register or subscribe, we ask them what industry they work in, their job title and the role they perform. This is first-party declared user data that we use to target ads, but that also allows us to tailor content to the user. When you’re paying $600 a year for a subscription, we want to make sure we’re showing you what you’re interested in.
Subs are a huge part of our revenues, but we are seeing issues with churn and challenges on price, particularly in the US, where it’s very competitive. We don’t have the same household brand name there that we do in the UK or Europe, and it’s $20 a month for The New York Times and a dollar a week for The Wall Street Journal. But we see the US market as our biggest opportunity for growth.
How are you shoring up your ad business against a potential recession?
Of course I’m worried about a recession, but we operate leanly, we rely on so few outside resources and we invested well during this bull market. We also might be somewhat insulated from the worst effects because we’re not reliant on the DTC advertising dollars that mass-appeal publishers are chasing.
This small bump in the road isn’t something that would affect us long-term. When the coronavirus hit in 2020, we were having very frequent, very concerned conversations with marketers and agencies, and those conversations are not happening now with the same frequency. We’ve had a few requests for scenario planning through the end of the year, but we’re not having the “don’t complete that RFP”-type of conversation we were having in March 2020.
Are attention metrics finally going mainstream?
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 we were obviously way too early, although we ran some successful campaigns. We haven’t actively sold CPH for about three years.
But we’re at a tipping point, not just on the sell side and among ad tech vendors but on the buy side. One of the reasons is because agencies and clients aren’t going to have as much of a choice when they buy audiences anymore, so they’re looking at quality of attention. The other is that the gaming of viewability and CTR has worked its way through the system, and attention is a new metric that people are still trying to figure out how to game.
Do you think we’ll see attention adopted as an industry-wide currency?
I’d love for there to be an attention unit that’s agreed upon, but there are so many different stakeholders. How do you get everyone to agree on one definition of attention?
This interview has been edited and condensed.
For more articles featuring Brendan Spain, click here.
