It was a WPP agency that devised The Financial Times’ once-famous marketing slogan, “No FT, no comment.” So, what does WPP CEO Sir Martin Sorrell think of Pearson’s sale of its newspaper to Japan’s Nikkei for £844m ($1.3bn) this week?
Speaking with Beet.TV in this video interview, Sorrell urges Nikkei to thaw an approach to advertisers he suggests had become rigid under Pearson.
“I’ve always looked at the FT and thought, in somebody else’s hands, it could be much more powerful,” he says.
“From an advertising point of view, we invest about $65m a year in the FT (for our clients). I guess we are a very significant proportion of their total advertising revenues. But, if you asked me intuitively, I would think it would be far more than $65m – I would think it would be at least double that.
“My people say the reason why it hasn’t been greater at the FT is the FT is not as flexible, they treat the brand as a premium brand. They haven’t been flexible enough in terms of advertising and sponsorship opportunities.
“The opportunity for Nikkei could well be to take a more flexible approach in terms of engaging with our clients, not treating it as a niche, premium brand or quite such an elevated brand.”
The FT had come to see the advertising revenue line as vulnerable during the throes of the 2009 economic collapse, preferring to reach paying business subscribers. Subscription income at the paper overtook advertising income back in 2012.
There were already signs of change within the FT before this week’s takeover. The success of its digital payments model came after the paper in 2007 turned its hard paywall in to a meter. Whilst that has been the catalyst for digital success, the publisher has since successively reduced the number of freely available articles, to as few as three.
This February, the FT switched the model to paid trials instead, an approach it said increases subscription rates from between 11% and 29%.
Alongside the sale announcement on Thursday, Pearson reported that the FT, in the first half of this year, grew paid circulation by 9% year-on-year, with digital users up 14% to nearly 520,000 as a result of the new model.
In contrast to Sorrell’s comments, Pearson’s earnings stated: “The FT continues to take advertising market share globally.”