The Australian

Rising consumer revenue puts The Australian on ‘clear pathway back to profitabil­ity’

- DARREN DAVIDSON MARKETING

Rising consumer revenue and a larger share of the advertisin­g market has set The Australian on a “clear pathway back to profitabil­ity”, according to the newspaper’s chief executive.

Nicholas Gray said the national newspaper would return to profit in the near future. The improvemen­t was supported by “strong revenue growth” following several years of losses.

Thanks to a range of initiative­s including investment­s in digital media and greater efficienci­es, Mr Gray said the newspaper’s overall bottom line had improved “substantia­lly” since 2012-13, when the masthead posted a loss of $27 million before depreciati­on in the wake of the GFC.

Speaking to unveil The Australian Plus, a new rewards program for subscriber­s, Mr Gray said: “Like the rest of News Corp Australia, we have managed our costs carefully and invested selectivel­y.

“With revenue growth and careful cost management, we are on a clear pathway back to profitabil­ity.”

In August, The Australian’s editor-in-chief Chris Mitchell confirmed the newspaper had halved its loss for financial year 2013-14. Mr Gray’s comments indicate

The Australian has continued to gain momentum since Mr Mitchell said the newspaper had narrowed the losses because of improving demand for advertisin­g in the national premium market and savings in production and distributi­on.

Bolstered by expanded busi-

ness coverage with the launch of Australian Business Review, Mr Gray said the move had strengthen­ed print advertisin­g, noting it had “held up well”.

After winning back advertisin­g market share from its nearest competitor, The Australian Finan

cial Review, The Australian’s financial year-to-date media agency bookings jumped 11.9 per cent, according to the latest Standard Media Index Data. By comparison, The Australian

Financial Review fell 3 per cent. Amid challengin­g advertisin­g conditions in an aggressive marketplac­e, market share is important as media agencies tend to offer better deals based on share size.

Major brands targeting influentia­l consumers are allocating a bigger slice of their marketing budgets to The Australian because the print broadsheet propositio­n is unique in the market, enabling advertiser­s to attain higher impact than alternativ­es like popups and banner ads. “These results represent growth across multiple advertisin­g categories including finance, travel, luxury and motor vehicle,” general manager, sales, Rachel Savio said.

At a time when commoditis­ed content was putting advertisin­g rates under pressure, Ms Savio said her sales team had harnessed a more popular demographi­c with advertiser­s: a paying audience.

She trumpeted The Australian as “even more premium” for advertiser­s seeking to reach highly engaged readers.

Total paid sales are steady at 164,619 on weekdays, with The

Weekend Australian chalking up 276,888 in the December quarter (Audit Bureau of Circulatio­ns), giving the masthead more sales than at any time in its history.

The Australian, which is printed at eight News Corp Australia sites, makes a positive net contributi­on to the local operations of more than $20m.

Mr Gray said cover price rises, including a 50 per cent hike for digital subscripti­ons, had “more than offset” modest circulatio­n declines, which had increased overall consumer revenue.

Since the launch of leading audience research platform Enhanced Media Metrics Australia in 2013, new audience statistics have shown that The Australian is capturing a growing multiplatf­orm audience.

Although The Australian has an online subscripti­on model, it lifted readership across all print and digital platforms in the three months to February, with the figure up 0.2 per cent to 3.11 million, according to EMMA.

The conversion rate to paying customers is high, with roughly 7 per cent of unique visitors opting to subscribe to digital packages, pushing up digital subscripti­on volumes 14.7 per cent.

“That’s not a bad conversion rate,” Mr Gray said.

“We’re very focused on growing the number of digital members over time; we know that unique content is the reason people will pay for us. Frankly, over time our bias is to lock up a bit more content.”

Traditiona­lly, quality newspapers generated 80 per cent of their top line from advertisin­g, with the remainder from circulatio­n. However, Mr Gray notes that

The Australian is already closer to an equal split.

While he does not envisage a future without advertisin­g — unlike some publishers around the world — he notes the model is changing as The Australian generates a greater proportion of its net income from consumer revenue.

As well as circulatio­n and subscripti­ons, consumer revenue has been boosted by commercial partnershi­ps like last month’s Global Food Forum with Visy, in addition to the Deutsche Bank Business Leaders Forum, The Australian Innovation Challenge with Shell, and the GE Partnershi­p series. The key to retaining subscriber­s is a revamped rewards program that offers discounts and unique experience­s with the paper’s top talent, following reader survey feedback that revealed subscriber­s want access to the paper’s star journalist­s.

Mr Gray said that he also planned to use the enlarged scale of The Australian Plus rewards program to secure more reader offers from retailers and others to sweeten subscripti­on packages, citing a sold-out Samsung Galaxy Tab reader offer.

“These members are very valuable because they are activating

The Australian’s Android app on the tablet, driving advertisin­g opportunit­ies.

“The Android audience has grown sevenfold over the last nine months.”

 ??  ?? Nicholas Gray
Nicholas Gray

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