In November, Guardian announced a partnership with Operative where Guardian's "print and digital media businesses, including guardian.co.uk, as well as The Guardian and The Observer newspapers, will all be running from the same platform – Operative.One – in the first half of 2012." Read the release.
Andy Beale, Technology Director at Guardian News and Media, discussed the deal and its implications.
AdExchanger.com: What was the turning point for bringing the print and digital operations together into one ad platform?
AB: If you go back to the start, it was driven initially by efficiency. What can we give the sales teams to make their lives easier and make them more efficient in a sales process? That was the initial driver. We had practical issues around the age of the system too. With nothing else going on, we needed to look to modernize. But the philosophy for the project changed about three years ago as it became more about supporting the growing digital revenue than it was about simply integrating systems, and then making those systems efficient. It became a revenue-driving project.
How does the revenue breaks down for you all in terms of digital versus print - especially over time?
The real story there is the direction the arrows are going. We still make a significant proportion of our revenue from the combined sale, but a lot is still from our print products. But digital is a growing area. And that is a structural position that is not going to change. Regardless of the detail, it's about supporting our growing revenues. The actual product that we are providing our clients, in terms of that monetized audience, is a combined cross‑platform package almost always now. It's not quite from a revenue perspective. Print versus digital - they have symbiotic relationship.
What we are trying to do is always take advantage of the experience that we have already. A lot of the skills and capabilities are the same, print to digital. Clearly, there are some specific things we need to bring in. It's really about up‑skilling and cross‑skilling them to the new technology. What we are finding, particularly, is those skills around things like Salesforce are incredibly sought after, and it's certainly going to be a constant challenge hanging onto those skills from a retention perspective.
Do you view your deal with Operative more about servicing the operational aspect of your business or the sales aspect of your business?
It's fundamentally a sales deal. The phrase "partnership" gets used and abused a lot in IT. But I think for Operative, we have found like‑minded media people and see this as a media partnership with a company that is fundamentally a media company that makes good software. If you look at our open content strategies and how we are opening out to the Internet and not closing off, the same is true of our sales processes. We see a lot more of our business being done on other properties as well as our own. Some of Operative's thinking around the networks is supporting that. It's a revenue and sales generating program.
Can you talk about your print business a little bit and how important it is to you?
The print business is vital to us. It's true for most publishers that have been around for any length of time. The bulk of revenue is still coming from print sales. It remains vital.
In terms of digitizing print, tablets are making real that old idea that people would interact with advertising on the Internet in a much greater way than, perhaps, ever. You are seeing something there with which people can interact. Certainly, with our iPad apps, we have done limited advertising integration - and being able to sell those kinds of products and features are important. That comes down to flexibility. Normally, we would know exactly what it's going to look like and what ad sales are going to look like, but in a couple of years, it could look very different. It's about flexibility and about bringing to bear some of that maturity around print and running a good print operation, and bringing that into the digital space.
In digital with overall data‑driven media, how are you approaching that strategically?
This part of the project, the Operative.One piece is at the heart of all of our ad systems so that we take information back through our analytics engines about what people are actually doing – and that supports your audiences' interests in with data‑driven ad sales.
What can you say about digital and trends you're seeing today?
I For us, we have just launched an iPad product, which has had phenomenal download numbers in the first month. That's a hugely important platform for us because it can deliver the kind of quality user experience that the newspapers have always known. It is a direct subscription revenue as well, so it's very important. The thinking around advertising on tablets is that it is still just starting. That's a key area for us. We see a future of lots of micro‑streams and smaller streams of revenue.
So is yield the overall metric you’re looking at?
Yield is absolutely a key metric. If you have got all those disparate pieces, you've got to be careful that they are not losing money. Average revenue per user is a key metric across all parts of our business, including the events business.
What sort of challenges, if any, do the different geographies of the Guardian properties present to you?
Today, our biggest problem has been monetizing the significant U.S. audience we have. We have a great audience in the U.S. but we have never made the kind of money that you would expect from a sizable and engaged audience. One of the main things we have done is launch Guardiannews.com in the U.S. this year. That is a key part of the strategy - to push into the U.S. market for advertising. Again, Operative's being in the cloud is particularly useful in terms of deployment so we are expanding our offices in New York because being able to provide the tools out there is useful. Certainly, multi-currency transactions and being able to push those through Operative, and then back through to our back‑end systems, is going to make things less complicated than they would have been on the old system.
By John Ebbert