Opinion

The lowdown on The Economist’s APAC plans

Asia's next revolution economist coverThe Economist’s chief marketing officer Michael Brunt talks about how the brand is perceived in Asia, how digital is sold differently to print, why it will never budge on ratecard and why Australia is one of its best markets, in an interview with Mumbrella Asia editor Robin Hicks.

 

So what’s the plan to grow in Asia this year?

Asia is incredibly important for us because of the way we classify our audience.

We use a combination of psychographic and demographic data to evaluate our readers. People who read The Economist have more in common with people in their own psychographic group globally than they do with most of their fellow country folk. The most overriding consistent psychographic characteristic is that they’re interested in the world beyond their own borders. They’re also keen on their own careers, they’re quite techie, and they’re more likely than most to be a volunteer.

michael brunt

Brunt

Demographically, they’re in the upper quartiles for education and are earning good money – or will end up doing so. There are around 130 million people we think ought to be reading The Economist globally. But – and this is a big but – not all of these people would have the command of English that would make the experience of reading The Economist enjoyable. Strip them out, and we’d have about 70 million potential readers.

Asia is a huge area of potential. But it is not our largest region for penetration. Australia, Hong Kong and Singapore index more highly, but generally penetration is relatively low in Asia.

We have put a lot of marketing investment into Asia over the last year, and we’re increasing it this year too.

A key factor in our growth comes from our pricing strategy. You can make a saving by buying a subscription of the magazine from our website, but we charge less for the digital versions. If you want both, you pay a 20 per cent premium.

We might charge a bit less for digital, but most of our new subscribers choose both. We have more than doubled our digital audience in a year, and fewer and fewer people are choosing only the print edition; two thirds of our new subscribers choose something digital.

For me, that’s great news, because while we’re holding our circulation globally [overall, The Economist’s worldwide print and digital circulation increased by one per cent year on year], we’re increasingly our profitability.

We are confident in our strategy. We don’t see a diminishing demand for what we sell, and we continue to see a very good response from our marketing.

Tell us a bit about your marketing strategy for Asia.

We spend a lot of money on digital, and different marketing teams take responsibility for a section of the customer journey. Right at the top of the funnel it’s about prospecting and growing awareness through social and PR, owned and earned media. As a publisher, we have a lot of content, and we use a lot of it in our marketing. We look at what people are reading, and place contextual ads to reach them – and we get good click-through rates. People say you’re more likely to be struck by lightening than click on a banner ad, but we don’t see that.

We move people from a low level of awareness through to a point where they are considering buying a subscription. And it’s all database driven. We’re not an easy read, and the best way to sell The Economist is through sampling.

What do you expect most from your agencies?

We select those that give us the expertise we don’t have internally, and with a know-how across a range of clients. We have brought in a retail marketing specialist, as we take the view that our marketing should never go dark. Our marketing approach is either global or local. We’re more likely to have a strategy for, say, Hong Kong or Melbourne than for Asia.

So the days of the big white-on-red billboards are over?

The Economist advertising on the side of a Hong Kong taxi

The Economist advertising on the side of a Hong Kong taxi

The days where the majority of our brand marketing budget is spent on high-impact outdoor are gone. We do some – in Sydney, Melbourne and Hong Kong – and we’re prevalent on the sides of taxi sides. Previously, we did a lot of our prospecting on outdoor, and it’s still really important to gain reach, but now it’s more of a mixture.

So this year, what’s the focus of your marketing efforts?

Every year we update a five-year plan. This year is about growing the profitability of our circulation. Before we sell an ad, we need to make a profit from our circulation. It’s important for editorial to know that we are covering our costs.

When launched the app in 2010, we thought migration to digital would be swift and irreversible. Which is only partly true. It’s been far slower than we thought it would be. We didn’t think print would go away. But we were genuinely surprised that over half of new subscribers now choose the print and digital bundle.

Which is more profitable for The Economist, print or online?

I look at profitability independently of ad revenue. The way we price our products means that we can be agnostic about format. With advertising, we still don’t budge much on rate card, but we’ve seen a structural decline in print advertising revenue.

If you buy a print ad, it won’t run automatically online as a PDF. That might be seen as a risky strategy. But now it is benefiting us as we’ve built a digital-only revenue stream. This is growing quickly, and demand is high for our native advertising offering.

But as a whole business, it’s not growing fast enough to mitigate the decline in print ad revenues. Meanwhile circulation is growing in profitability but not in total volume.

the Economist Espresso

the Economist Espresso

In the UK, The Economist is a media institution. How do you feel it is perceived in Asia as a brand?

We’re definitely not an institution in Asia. In international finance hubs, yes – we’re very well established. But beyond the financial centres, we have to fight to introduce people to The Economist. We want to keep The Economist front of mind with outdoor, experiential marketing and followed up with a lot of digital.

Have you considered dropping the cover price to make The Economist more appealing in Asia’s more price sensitive markets?

This is not the solution we’re running with. But we’re aware that The Economist is very expensive. Which is why we introduced The Economist Espresso [a curated digital wrap of key events], which is a lower price point and has been doing very well in markets such as India, Nigeria and Kenya. So our solution is not to discount – to borrow from a very British expression, we don’t want to discount the crown jewels. Our solution is to introduce new products that are slightly cheaper.

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