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Guardian CEO Andrew Miller on paywalls, mobile, and going global

With the growth in tablets and smartphones, Miller says responsive-designed sites are now table stakes for publishers.

The story of the news industry at the moment is the interplay between contraction and expansion. As publishers reduce the size of their operations, they’re also looking outward to new products, new coverage areas — or new geographies. The media map is increasingly global.

Last year, The Guardian immigrated across the Atlantic, setting up shop in New York for its latest attempt to conquer the United States. Now, almost a year later, they’re headed to a different set of ex-colonies with plans to start an Australia-based news site. The Guardian’s global ambitions are happening as the company, like others in the news industry, is facing serious financial pressures. Australian media is retrenchment of its most important newspaper company.

Recently, I had a chance to speak with Guardian CEO Andrew Miller about his company’s international ambitions, from interactive news in the U.S. to advertising opportunities in Australia. Here’s a lightly edited transcript of our conversation.

Justin Ellis: The big announcement is you guys are expanding into Australia. Tell me about the strategy behind that.
Andrew Miller: I took on the role two years ago here, and one of the first things I wanted to do was really understand where our readership is to try and see increasing ways of monetizing the digital business. It took two seconds to realize that two-thirds of our readers are outside of the U.K. And therefore I wanted to try a strategy of modest investment to make sure we increase the commercial opportunity of our readership.

So that took us to the States first, following the strategy of putting some dedicated editorial resources to the States, serving a bit more content to the readership, and then starting to build a commercial proposition for advertisers here in the States. That’s worked really well. We’ve increased our audience from 8 million a year ago to about 12 million uniques. And we have tripled our revenue in the timeframe. So it’s going well.

The next stage is: Where do we go next? Our next largest audiences are in Australia and Canada. Geographically, Australia looked really interesting, so we started looking at how we do Australia. We were approached by Graeme [Wood], who’s very interested in investing behind it. So we talked to him for a while and found a way to do it.

So we’re following the same formula again: We’re putting some editorial people on the ground, overseen by Kat Viner, one of our best editors, and putting some commercial investment behind it that’s relevant for that size marketplace. It’s just following the model incrementally, building out The Guardian and trying to increase and monetize the audience we already have.

Ellis: What kind of advertising opportunities does it present to expand into new markets like the U.S. and Australia? How does this help you with digital revenues?
Miller: By having people on the ground in that marketplace, you move the digital display discussion from being a run-of-inventory discussion to being a proper discussion about the right CPM rates. So that’s number one. Number two, it then allows you to supplement that a bit further by actually having properly proactive engagement with agencies around the kind of things that matter to their key clients and the kind of advertising they do for those clients. And that’s the kind of stage we’re getting to in the States. And that’s allowed us to harden the CPM rates further, and actually give more bespoke solutions for clients in the states.

The next stage is trying to bring across, which we’re going to be doing in the coming months, some of the stuff we’re doing in the U.K., which is working directly with agencies and clients, using our knowledge of different areas of media — social media as well as our own browser, as well as mobile — to get the kind of format advertising that works for them in a more tailored and bespoke way, but without compromising out unique voice.

Ultimately, it’s that unique voice that drives traffic to us. By following a very gradual approach, just by being in the marketplace properly, we have a credibility that allows us to firm up rates, do more bespoke deals, and come up with more interesting stuff for clients.

Ellis: You’re free on the web, but you also have paid offerings, like your iPad app. What have the results been from that?

For someone like us in the U.S., with a brand name that’s not hugely well known, to have a paywall and close off consumption of The Guardian at this stage would seem crazy to me.

Miller: It depends which lens you look at it, is the way I’d interpret it. The iPad’s a great example. It’s obviously free at the beginning, and the free trial shows very strongly there’s a huge demand for iPad interaction and the enhancement that gives. As soon as you put a paywall above it, not surprisingly, the number of people who really subscribe to it really falls off quite dramatically. The conversion rate we’ve seen is about 15 to 20 percent of the free trial. Which I think is pretty good, actually, by iPad type metrics.

So you could answer that in two ways. You could say that just shows you that value-added products and a paywall doesn’t work, because it closes your audience off very quickly. Or you can say that you have to have a free offering to sustain the level of advertising that an advertiser would find interesting…you have a large audience to make it attractive to advertisers. It’s this kind of dilemma all the time — so it depends what you want, is how I’d answer it.

You might have a unique proposition that is very meaningful in an iPad format for a very closed and small audience — maybe a unique audience, like financial news. And in that case, I think a hard paywall on that does make sense. But if you want to own the discussion with advertisers as meaningful, you’ve got to have a large audience that you understand, who understand your products.

What I’m trying to say is horses for courses in my view. And that will firm up over time, I think, as the kind of expansion we’ve seen in digital consumption doesn’t slow down, but people begin to settle in the different places they go to for digital news.

Ellis: You and Alan have said time and time again you don’t imagine you’d use a paywall for The Guardian. Is that something you still think?
Miller: I don’t think our thinking was ever any different. The short-handed way of characterizing it is The Guardian is anti-paywall. That just looks at the news sector, in my view, in a far too simplistic way. It’s finding the consumption of the news product in the right way in the right format.

So on Facebook and Twitter, you’ll never have a paywall, because it doesn’t make sense. You want your news to be consumed in a social way. Never say never, but a paywall wouldn’t seem to make sense there. Whereas enhanced product formats, where you’re getting real extra value in the way you’re doing it, it probably does make sense to have a paywall. But it only makes sense to have a paywall on the secondary level when you’ve got the right size of audience who’ll convert to it.

So, again, that’s why for some news organizations, when you’re got a large local audience who will convert willingly for significant revenues to paywall, it does make sense. For someone like us in the U.S., with a brand name that’s not hugely well known, to have a paywall and close off consumption of The Guardian at this stage would seem crazy to me. I’m afraid it is a nuanced answer — I keep saying horses for courses. It’s trying to design the product in the right way for the way that the user wants to consume the news.

Ellis: What have you guys learned from the Guardian US? It’s been about a year since it launched.

To me, HTML5 or responsive-based is just actually being in the game now.

Miller: It’s just over a year. We’ve seen in that year our traffic go from 8 million to 11.8 million on a comScore basis, which is good. We’ve seen, critically for me, our revenue triple in the last year. We’ve got actual bespoke clients now, which is good.

The thing that is really interesting for me is that it’s clear our distinctive voice works. There’s a distinctive voice we have in the marketplace that resonates with people. And that allows us to recruit good American journalists to help us — people like Heidi Moore, who’s fantastic. And Ana Marie Cox as well. So it’s taking out that distinctive voice we know very well in the U.K. and bringing it to the U.S.

The other thing we’ve seen working very well is doing a slightly different type of journalism. So the interactive stuff we’ve done has been phenomenally successful. Don’t know if you saw America: Elect! — we did a graphic novel for the American elections.

Ellis: It seemed like that was a real big hit.
Miller: That was great. And we’ve done another interactive on gun rights, following the gay-rights one we did, which won quite a few awards about six months ago.

The key thing around that is that it shows interactive does work. It’s about engaging with your audience and not broadcasting, but actually involving them in it. So it allows you as a reader of that content to look at it on Facebook and see how your friends on Facebook see gun laws in the states. Interactivity sits well with our open journalism, and I think that’s a really interesting area — for the States, in particular — we can build on. I guess what we learned is there is a real demand for our distinct voice. A real demand for a place we can bring writers who have that voice in a U.S. way. And it’s an interesting way for us to try different journalism.

Because this is a digital-only news organization in the States, it doesn’t have the heritage of the U.K. newsroom. So we have the good bits of the U.K. newsroom — we have the interesting voice, the editorial standards, and the journalistic standards. But if you came into the offices [in New York], it’s completely open. Which I really enjoy. It doesn’t have 190 years of history of how to run a news organization. It’s a brand new startup.

Ellis: The Guardian launched a new responsive mobile site late last year. You’ve mentioned traffic growth — is there anything specific you’re seeing about people’s use of The Guardian through mobile?
Miller: It’s a very realistic position with the proliferation of tablet devices in all different formats. If you’re not in a responsive-based site, your content won’t be served in the right way for the site. That’s just about being in the game. It’s not about an agenda of advancing our own products coming behind it; it’s about actually being in line with the pace of the change going on. The mobile growth we’re seeing at the moment, across all the geographies, is phenomenal. In the U.S., the growth has been predicated a lot on very strong mobile take-up. To me, HTML5 or responsive-based is just actually being in the game now. If you’re not, you’ll have real issues serving content across all the tablet formats that are coming through so quickly.
                                   
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  • http://twitter.com/joewozny Joe Wozny

    Good interview and insights.  How do you think iGoogle closing in 2013 Fall is going to impact PayWalls?  Joe Wozny, Author, The Digital Dollar; Sustainable Strategies for Online Success    www.thedigitaldollar.com