Why the Guardian is now turning its readers into customers

If the Guardian is to survive, it has got to stop being complacent about having a large number of readers and start to figure out how to turn them into customers, David Pemsel, chief executive of Guardian Media Group said while speaking at Media360.

Claire Beale (left): with the Guardian's David Pemsel on stage at Media360
Claire Beale (left): with the Guardian's David Pemsel on stage at Media360

In an on-stage interview this morning with Campaign’s global editor in chief, Claire Beale, Pemsel shared the Guardian’s new view of its readers.

"Too often, publications have a big number of readers on digital, but they don’t scrutinise the data," Pemsel said. "Data and knowing your audience is everything. Big readership numbers can make one complacent."

Publishers are lagging behind the idea of turning readers into customers, he continued. "These audiences need to be managed as customers, not just readers."

It was this insight that led to the Guardian moving away from Facebook’s Instant Articles and Apple News.

"We’ve got reach, but we need data and advertising revenue which we were not getting back," Pemsel explained.

The Guardian is now obsessed with analysing the reader funnel, of quantifying its legion of anonymous readers and converting them into known and paying customers.

"We have a phenomenal opportunity to take that vast audience and assess what loyalty and regularity means in terms of revenue," said Pemsel.

This focus on translating its reader numbers into revenue for the struggling title was behind its decision to reduce its presence in the US. Even as Donald Trump's rise to presidency placed the media front and centre of the debate. 

"The reciprocal return from global audience reach in terms of advertising is over," said Pemsel, adding that it used to work but now advertisers are more focused on local audiences. 

The Guardian’s path to sustainable profitability hasn’t been easy, he shared. "I feel like we’re almost replanning our business every quarter – if you like it, it’s great, but if not, it’s bloody exhausting but it’s the world we live in now. We have to judge ourselves every quarter to make sure we’re staying on track."

Part of the publisher’s pursuit of data has been to determine where the "advertising tax" is going, Pemsel explained when asked about the Guardian’s lawsuit against Rubicon Project.

While Pemsel could not comment on the Rubicon case specifically, he did say that given the millions going through the media buying system, it’s not good enough that no one’s quite sure how much media a marketer gets for every pound spent.

"It’s beholden on everyone to scrutinise and understand," Pemsel said. "There is an advertising tax between the spending of the money and the arrival at the end with the creator.

"There are several prominent marketing figures saying, ‘We’re not sure how this all works’, well put your procurement teams on it. If they’re not looking into this, I don’t know what they’re doing."

There is no denying the media environment has changed into one that’s drastically tougher for publishers like the Guardian and favouring the like of Google and Facebook, Pemsel said. "But to use that great quote from Robert Thomson of News Corp, ‘whiners are not winners’. Publishers can’t just sit around complaining it’s not fair."

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