Flogging more than just news
From holidays to insurance, newsbrands have always sold readers more than just news – but are The Times and The Sunday Times right to offer wealth management – and can they make it work? By Raymond Snoddy.
The moment when the old Saatchi & Saatchi advertising agency started to look doomed was when it decided it might be a good idea to buy Midland Bank.
The move was seen as an example of over-weaning ambition in the days when banks were banks and ad agencies were expected to stick to what they knew best – in Saatchi’s case getting Conservative governments re-elected.
Now, partly thanks to the internet, boundaries between sectors have all but broken down and an advertising agency could probably pick up a bank at a very reasonable price – if it were sufficiently daft to want to do so.
As far as it is publicly known The Times and Sunday Times are not planning either to buy or set up a bank, but this week the newspapers still took a bold step into financial services. The creation of Times Wealth Management “offers a clear, trustworthy and personalised service” for readers covering everything from ISAs, SIPPS, funds, investment trusts, retirement and nest-egg planning and portfolio management. It will offer readers help with their financial affairs and investments in an era when many of the High Street banks have “withdrawn from the advice market.”
Mercifully for the sake of all involved these new financial service are not being operated by journalists but will be in partnership with “leading private client investment firm Bestinvest,” a company with more than 50,000 customers and almost £5 billion in invested assets.
The news of the launch happened to coincide with forecasts on important trends from the advertising market.
The headline prediction from eMarketer was that spending on UK mobile advertising was due to rise to £2.3 billion this year and top newspaper advertising for the first time.
Overall, advertising in newspapers, both national and regional, would fall from £2.2 billion in 2013 – a 15.3 per cent market share – to £2.1 billion this year, involving a serious drop in market share to 13.8 per cent. Television, radio and outdoor advertising would all rise but would still lose market share to digital.
Naturally being eMarketer forecasts they are unlikely to underestimate the share of digital, which is seen as rising from a 44.3 per cent market share this year to 47.5 per cent, or £7.1 billion, this year. How long before eMarketer is able to trumpet that digital has topped 50 per cent of the advertising market for the first time?
At the very least the orders of magnitude will probably turn out to be correct and there is little doubt that the internet has hit newspaper advertising harder than television, for example.
So it must seem like a good idea to let the creative juices flow and try to find new sources of revenue for newspapers beyond advertising, and cover price or digital subscriptions.
‘Extending the brand’ marketeers would undoubtedly call it.
The Times and Sunday Times have an above average collection of wealthy readers so why not sell them more things. Exploit the sense of being a member of a club – one of the identifiable advantages of placing a greater emphasis on subscription, which comes complete with names and addresses.
There is hardly anything new about newspapers trying to sell their readers products and services and promoting special offers.
In the 1920s British national newspapers were falling over themselves to boost circulation by offering readers free insurance, accompanied by reminders that in 1920 there had been 1085 fatal accidents involving horse-drawn carriages.
“If you’re ill we pay the bill” was the slogan of the Daily Chronicle, although it’s maybe no coincidence that the paper no longer exists.
Meanwhile the contemporary Daily Mail has perfected the art of selling plants to its army of garden-obsessed readers through the Mail Garden Shop. This week’s eight-page supplement marking the arrival of Spring offered 50 free dwarf butterfly gladioli “worth £8.99 with any order” and you could get a pack of five exotic agapanthus for a mere £2.99.
The Guardian is less into agapanthus than the Daily Mail but does a nice line in archaeological holidays. If Albanian archaeology is your thing then Guardian holidays offers has seven nights half board from £1,195.
Yet holidays and plants are one thing, wealth management may be quite another.
It is easy to carry out basic quality control on plants and holidays or even free insurance in the unlikely event that such a readers offer were ever to make a comeback.
But wealth management looks like a much more problematical area to get involved in.
As they say in the trade, shares – and assets in general – can go down as well as up and Bestinvest had better turn out to be good to avoid the danger of creating disgruntled readers. In fact Times Wealth Management is not the only new service introduced recently by the newspaper group.
In September they launched Times Tutorials to help parents assist their children with their studies “at a fraction of the private tutoring costs” and a month later there was the birth of Times Currency Services offering “highly competitive currency transactions.”
Apart from issues of competence there is one obvious flaw with such get rich quick schemes for newspapers. You are in danger of competing with your own advertisers offering similar services.
And what would happen if, for the sake of argument, the performance of Bestinvest were to take an unexpected dip? Would such information be prominently reported in the editorial columns of The Times or the Money section of the Sunday Times? Given the continuing pressure on newspaper advertising revenue you can be sure that newspapers will continue to expand into adjacent areas using the increasing amount of information they have on their readers. After all the Daily Mail and General Trust has the stated objective of reducing its dependence on advertising to below 50 per cent.
Can it be long before newspapers, which know a thing or two about distribution, get into pizza delivery?
And if former Times journalist Michael Gove fails to become Prime Minister he could always run a chain of Times Academies with or without free lunches