The Annual 2006: Medium of the Year - The Economist
campaignlive.co.uk, Friday, 15 December 2006 12:00AM
In a year when digital was dominant, The Economist proved that strong editorial and shrewd targeting could still deliver great results for old media.
2006 was without doubt the year of digital. So, the achievements of a 163-year-old magazine are all the more remarkable. The Economist continues to be a remarkable success story, both in the UK and overseas. In 2006, the publication consolidated its position as the pre-eminent magazine for leaders of the world economy, as well as those with just a passing interest in political and economic affairs across the globe.
At the heart of The Economist's coverage, it says, is the notion of "success" and, on every measure, The Economist itself has had a hugely successful 2006. Its circulation has never been higher - in the UK, its sales grew by 4.7 per cent to 162,112. Worldwide sales (excluding North America) were up 4.2 per cent to 524,233 and, impressively, sales in North America rose by 15 per cent. And all of this in a year when both Forbes and BusinessWeek have shut down their international editions.
In less than 15 years, The Economist has doubled its circulation, from just over 500,000 to 1,096,154. This reflects a shrewd strategy to target foreign markets at the right time - especially the US, which now accounts for 52 per cent of The Economist's total sales.
Circulation success has not damaged the quality of The Economist audience. According to the respected European Business Readership Survey, the title has increased its coverage of senior European business figures by 40 per cent over the past two years.
The Economist's financial performance has improved on the back of this - increased sales and ad revenues contributed to a turnover of £218 million for 2006, up from £197 million the year before. Pre-tax profits increased by £4 million to £31 million. Ad revenue grew by 14 per cent, and the group chairman, Sir Robert Wilson, said that a rise in online advertising at theeconomist.com had not dented revenues at the print version.
During 2006, The Economist delivered on every measure for advertisers, and its success demonstrates that strong editorial content remains incredibly valuable to advertisers. In addition to the swathes of corporate advertising across the title, it is also attracting heavy amounts of broader, consumer advertising. Brands in recent issues include Rolex, Samsung, Bulgari and LG. And media agencies don't mind paying ratecard price (up to £82,500 for a page) to reach The Economist audience. As one media agency director told Campaign earlier this year: "It's always in the schedule when you're targeting chief executives. Circulation is still going up, so it's got to be the easiest brand in media to sell."
This doesn't mean that The Economist is casual or complacent about its position in the market. It remains committed to promoting its brand and capturing increased awareness in both consumer and business markets. Its iconic "white out of red" activity, through Abbott Mead Vickers BBDO, continued to win plaudits and, for the first time, was used to raise awareness in the US.
In terms of innovation, The Economist is often said to be evolutionary rather than revolutionary, yet this approach is clearly paying dividends. That said, its online service has long been one of the best in publishing, and has contributed to the statistic that 19 per cent of Economist Group revenues are now derived from online products.
This year, The Economist was hit by a rare event, the resignation of an editor. Bill Emmott, who had been in the seat for 13 years, announced his decision to step down to focus on writing books. Emmott was only the 15th editor in The Economist's history, which stretches back to 1843, indicating a stability that is the envy of many other titles.
The Economist deserves praise for its handling of the transition to a new editor. Huge speculation followed Emmott's departure, but within a few weeks, after an orderly interview process, its US editor, John Micklethwait (bottom right), took the job. There weren't any immediate radical changes, but a couple of the early covers under Micklethwait did attract some comment. And, in a way, the change of editor has helped The Economist move on from its pro-Iraq war stance under Emmott.
Since his appointment, Micklethwait has introduced two significant editorial innovations: the creation of an international section designed to cover global trends and issues and the introduction of "The Buttonwood column", previously an online-only column about financial markets.
On the commercial side, the title continues to be a smoothly oiled outfit, despite the retirement of the publisher, David Hangar, last year. Andrew Rashbass (bottom middle) took over and, while there is an element of continuity with this appointment, Rashbass has already tried to place a greater emphasis on selling across The Economist portfolio.
Ultimately, though, The Economist's story in 2006 makes for a hugely impressive tale. While executives at The Economist acknowledge the part that global conflict has played in its circulation success, they deserve praise for the shrewdness of its business plans and continued excellence of the product. Here's to another 160 years or so of rude health.
Google If the award in this category was made on the basis of the most talked-about brand in media, then it would undoubtedly have gone to Google. The online company made even more of a splash in 2006 than it did in 2005, catapulted as it was on to the front pages of newspapers and into TV news bulletins after its acquisition of YouTube for $1.65 billion.
That Google is a phenomenal success is now beyond question. Its third-quarter revenues alone, up 70 per cent to $2.69 billion, would dwarf those of many traditional media companies. But the main questions are if Google is really set up as a media owner and if it positions itself as one. Certainly, in the UK, Google has experienced some difficult relationships with media agencies, although there are signs that it is putting big efforts into building closer ties with and understanding the issues faced by advertisers.
The YouTube acquisition, which will boost its own Google Video service, will offer advertisers more options, and its AdWords and AdSense products are welcome additions to its search service - AdSense (which tailors and matches ads to website content) especially. The vast majority of Google's revenue is derived from paid-for search, but there are signs this is changing. Next year could see Google emerge as a more fully rounded media company, with a variety of ways of bringing in advertising revenue.
Grazia Emap's Grazia magazine was on the shortlist because it offered something completely new to advertisers and delivered on its promise. Essentially, the title has created a new market in the UK - the upmarket weekly women's glossy. Launched under license from the Italian publisher Mondadori in early 2005, many questioned if the UK market could support such a launch, but Emap's instincts that British women were ready for a weekly fashion title have proved to be spot-on. Following a slow start with advertisers, Grazia has begun to pull in the major fashion and luxury advertisers on the back of strong circulation performance. Its average weekly sale rose by 12.9 per cent to 175,218.
Grazia has undoubtedly benefited from a continued interest from women in fashion, health and beauty and luxury, but Emap does deserve credit for launching at the right time and delivering a high-quality product.
Recent winners: Channel 4 (2005); The Independent (2004); Sky (2003); five (2002); Glamour (2001)
HIGHLIGHTS OF 2006
- March: The Economist editor, Bill Emmott, announces he is to step down after 13 years.
- April: Emmott is replaced with John Micklethwait, the title's US editor.
- August: The ABC circulation figures show a record performance by The Economist. Sales in the UK rose by 4.7 per cent and worldwide sales increased by 4.2 per cent.
- September: The European Business Readership Survey reveals a 40 per cent increase in The Economist's coverage of senior business people in the past two years.
- October: The Economist introduces a new international section.
This article was first published on campaignlive.co.uk
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