Guardian digital editor: Online display ads have 'cratered', paid membership is the answer - but it's not a paywall

The panel at Tomorrow's News, hosted by Reuters

The Guardian views print as “the bridge to our future” as it reveals it is managing the traditional news medium for decline while looking to drive growth from digital and membership.

Speaking at the Tomorrow’s News panel following a survey by Reuters.com into the news reading habits of 1,200 of the site’s users, released yesterday, the publication’s digital executive editor Aron Pilhofer said it was “doubling down” on paid-for membership after signs of decline in digital display advertising within the industry.

Pilhofer was joined by fellow panellists Mark Challinor, head of the INMA, Google’s Eero Korhonnen, Nathalie Malinarch, editor for mobile and new formats at BBC News Online and NowThis president Athan Stephanopoulos for the discussion at Thomson Reuters, in Canary Wharf, last night.

He said: “We all know what’s happening with print, that hasn’t really changed. It’s a constant decline and I don’t think I’m going to be breaking any news here by saying that isn’t going to change. We know where that story ends.

“The thing that has happened recently is that digital display [advertising] has absolutely cratered. The New York Times, for example are down one per cent year on year on digital display after years of growth – sometimes high double digit growth –  and so where does that revenue now come from?

“Revenue has to come from readers and so we are doubling down on membership which we launched about a year and a half ago. So that’s where we see the opportunity and the one place where we really can start to drive some revenue.”

He also said The Guardian was not considering a paywall, despite previous statements from the company that members are likely to gain access to more content in future as part of their subscription.

“I think the danger with a paywall is you put up a paywall and then do nothing else,” he said. “Suddenly the money starts coming in – and that’s exactly what we saw with the New York Times – it explodes then it plateaus and everybody goes ‘oh good, the internet’s solved’.

“The danger there is it lulls you into a sense of complacency in a way and you don’t look at the harder questions as a result, which are the fundamentals of business. For example a business that has been for almost 200 years, in our case, oriented around a single product that is a printed newspaper.

“Now we’re getting into a world in which you have to think about suites of products and new products and new revenue streams and how do you realign a company that has been fundamentally organised around one thing to be reorganised around many things and what is the role in particular, in our case because we are an editorial-led organisation, what is the role of editorial in that?

“That’s why membership, which fundamentally has to be driven by editorial, is transformative and is the thing for us that will push us in the direction we need to go.”

He added: “The strategy is not anti-print. Print is a big piece of what we’re doing but we are managing it for decline because that’s responsible and that’s just frankly the way things have been heading for the past 15 years.

“We talk about print as being the bridge to our future and that’s actually the right way to think about it and that’s the way the New York Times is thinking about it.

“You’re ring-fencing costs and you’re thinking about how can we manage to create the best possible print product every day, which we do, and still drive growth where growth is – and that’s going to be on the digital side. It just is. It’s not going to come from the print side.”

Comments

2 thoughts on “Guardian digital editor: Online display ads have 'cratered', paid membership is the answer - but it's not a paywall”

  1. ‘An editorial-led organisation?’ The Guardian is a newspaper. It does not maunfacture cars, planes, chocolate or soap powder. It is not a farmer. It is not a charity, school or a supermarket.

    Guardian staff should be worried that their future depends on people like Aron Pilhofer, whose name suggests that it was invented by a panel of marketing experts and then ‘trialled’ with focus groups.

    He sounds like he has jotted down meaningless buzz phrases from self published books about the digital age. ( ‘Suites of products.’ ‘Double down.’ ‘Membership is transformative.’)

    Like many people in senior positions at newspapers and their advisers in PR agencies and media ‘consultancies,’ he thinks that ‘news’ (shorthand for everything that appears in a newspaper) exists, like coal or oil, and just needs to be mined. He believes that journalists are only a part of the mining process, but they are not the most important part; only people like him understand how to market this ‘content’ Or something.

  2. So if it’s not a paywall, what is it? Is he suggesting the “suite of products” is the extra that members get for their money?

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