Audience Development Deep Dive Episode Vol. 7
Christian Kallenberg, owner of We Like Mags, and Benjamin Kolb, managing director of SPRYLAB, in conversation with Aled John, deputy managing director of FT Strategies.
We Like Mags and SPRYLAB in conversation with Aled John, Deputy Managing Director of FT Strategies.
Starting as a journalist first in broadcasting, later in digital, Aled John now advises companies with FT Strategies on how to set up sustainable business models and generate sustainable revenue.
FT Strategies not only works with publishers, but also advises streaming providers, arts organizations, financial service providers and many others. Because all companies have one thing in common: they are all driven by the question of how to drive engagement, loyalty and retention.
In collaboration with the Google News Initiative (GNI), among others, the Subs academy has been created. The goal of the program is to develop a sustainable and thriving digital subscription business for participating news organizations.The North Star strategy is used, which focuses on a long-term goal, defines key outcomes, and measures all hypotheses and tests against the big, overarching goal.
What you can expect in this episode
00:27 What does FT Strategies do?
04:30 How did Aled John join FT Strategies?
07:53 FT Strategies collaboration with Google News Initiative
11:08 Using the North Star strategy and what the specific collaboration with FT Strategies looks like
14:34 Why customer acquisition alone is not enough
20:16 How personalization can help drive engagement
23:51 What's the difference in consulting for news and magazine publishers?
Christian Kallenberg: Welcome to the Audience Development deep dive, this time in English. My name is Christian Kallenberg, and today here with me is my co host Benjamin Kolb, CTO and founder of SPRYLAB technologies. Hi, Ben.
Benjamin Kolb: Hi Chris.
And our guest today is Aled John, Deputy Managing Director of FT Strategies. Hi Aled.
Aled John: Hi, Christian. Hi, Benny, great to be here.
Benjamin Kolb: Hi Aled.
Christian Kallenberg: We will talk about FT Strategies today and the businesses that you operate in. First of all, tell us what does FT Strategies do, and what is FT Strategies at all?
Aled John: It's a great question, I ask myself that question all the time. No, we... FT Strategies is the consulting arm of The Financial Times. We were born around 3.5 years ago or so. And really it was born out of I guess, the very real experience of organizations coming to the Financial Times for advice on how they could transform their own operations in the face of existential threat, I guess. And that's something the FT and many publishers around the world were facing through a long period, when the whole business model was being upended by a shift in the advertising market. And then sort of renewed focus longer term in how organizations could create more sustainable revenue and more sustainable business from their readers, and I guess more diverse revenue models, and not be so exposed to advertising.
So that was the transformation the Financial Times went through over 15, 20 year period, in reality. It's one of the oldest "payables", if you like, or paid-for content models in the news publishing market in the UK. That's online, obviously. People have been paying for print newspapers for hundreds of years. But many organizations obviously never took that confidence in being able to charge for content online into the digital space.
FT was being asked by its peers, both in the media and outside of the media, as to the key learnings and best practice from its own transformation. And so what FT Strategy does is it distills that best practice and the expertise around strategy, around operations and execution, in terms of transforming an organization or your organization to becoming much more digital first, much more resilient to existential shocks. Partly that's focusing on reader revenue or customer revenue and really understanding what needs your customers have, and tailoring your product and you're offering to those needs.
Christian Kallenberg: And you already mentioned reader or customer revenue. So I understand that you do not only operate in the publishing industry, do you?
Aled John: Sorry, guys, just letting my dog out.
Christian Kallenberg: Oh, that was the sound.
Aled John: He wanted to keep me company. It's her first podcast experience, but she's now left the room. You can keep that in if you want. I don't mind.
Christian Kallenberg: We have to explain the sound.
Aled John: Good. Okay. Well, my dog has made a cameo.
So your question was - is it just news publishing or do we work with other organizations? We work with many different types of organizations. Our origins are in publishing, be they news publishing or wider specialist or professionally focused or B2B focused publishing. That's definitely where the FR brings its original expertise from.
But over the last 3 to 4 years we proved that we can work and adjust those solutions and support organizations who have very similar challenges in reality, be they digitally driven businesses or organizations that, whether they have a recurring revenue model or not, need to think about how to become more - and apologies for the jargon - but more customer centric, more digital first, what that means strategically as an organization, how you need to align around a specific measurable and ambitious goal in order to get your organization there, and then all the capabilities that underpin that.
So we don't just work with news publishers. We've also worked with streamers, arts organizations, players in financial services space, and more besides. Because fundamentally they're organizations that need to focus in on what drives engagement, loyalty, lifetime value, and ultimate sustainability of their businesses by being closer to the customer needs with their propositions.
So, yeah, we help organizations of many different stripes. But it's fair to say a lot of the work we do, given our origins, does definitely sit within publishing in the wider media.
Christian Kallenberg: Who owns FT Strategies? Is it still 100% owned by the FT? Or are there any other shareholders?
Aled John: We are very much part of the FT group. We are a division of the Financial Times and very happy to be.
Christian Kallenberg: We learned a little bit about FT Strategies. Why are you there?
Aled John: Why am I there?
Christan Kallenberg: Yes. So what brought you there?
Aled John: Good question. I've had a fairly, I guess quite a simple career in many ways. I started as a journalist in the media, broadcast media originally, then digital. And then after about 6 or 7 years, I guess I took a slightly sideways step via post grad in business - I guess quite cliche. But then that allowed me to work more on the strategic side in management roles.
And that took me through time at The Guardian newspaper in the UK, then on to Conde Nast Media Group, which is obviously a global multinational media organization. I worked at Conde Nast International, which was at the time the global HQ outside of America. And we developed a core team around innovation, which again - very cheesy term now, and overused - but we were focusing on incubating new businesses to diversify Conde Nast's revenue outside of the very tried and tested routes of glossy magazines.
So we developed a B2B or B-to-professional-focused, their core to Vogue business.
I was around three years of doing that and overseeing the launch of its membership and subscriptions offering. I was then actually put in touch I think originally with FT Strategies, which was a very small and quite new outfit, obviously kind of originated from the Financial Times and appeared to be very interesting.
So I originally got in touch with them with our wonderful managing director Tara, who I, and we all work very closely with, to see if they'd be interested in supporting Conde Nast on some of the work that we were doing.
And what can I say, one thing led to another. I realised it was a very appealing and interesting proposition and doing something fairly unique in the market. There weren't many organizations, and I don't think there are still many organizations, that combine as we do, strategic rigor, if you like, from a kind of typical strategy consulting world - so, the McKinsey's or Baines in this world. Combining that with real practical and operational excellence, if you like, from - and this is the most important and most valuable part I think - the lived experience of the Financial Times.
And that, for our clients whether they be in news, wider publishing, wider media or other sectors, the fact that we have people in our project teams and the best practice that we espouse, comes from a position of knowledge and lived experience. And that's quite rare in the advisory or consulting world. We can show and prove that the techniques and tactics that we've developed over time -
Christian Kallenberg: Actually work.
Aled John: Actually work, which is good to know, and makes our job slightly less risky.
But that being said, and all joking aside, the work we do is adjusted for whoever we meet. And every client's or partner's needs are different.
But there are prevailing themes, and there's definitely approaches that we know work across many, many different organizations. And we have now worked with over 400 organizations in the media and wider sectors over the last three years. So that's kind of 20 or so years in a normal consultancy of our size.
And we do that through a mixture of program-like work where cohorts of publishers or other organizations come through the program at once, and our teams will work with those organizations to go through the program, which could be a week long, it could be nine months long. We've got a vast array of the different programs. And we do them -
Christian Kallenberg: We'll talk about them in a minute. Sorry, yes.
Aled John: Yes, of course. And we do them all over the world.
We also do direct work with organizations one to one. And again, similarly have done that in now, most major regions of the world.
Benjamin Kolb: And there are a lot of interesting case studies as well that we looked through, and we saw that there, many of them in collaboration with the Google News Initiative.
Could you talk us through your ways of collaboration with them?
Aled John: The Google News Initiative, or GNI, as I, or we call them - and we suffer a lot from acronyms in our business - GNI is an amazing and very well established partner to FT Strategies now.
So if you Google Google News Initiative and FT Strategies, you'll see very public commitments to the work that we do, and a commitment to work with over 500 publishers over the next few years.
So we work and collaborate in Europe, Middle East and Africa, and now in APAC as well. And we're doing a little bit of work with them in America, all in the grand endeavor to support the growth and resilience of the news publishing ecosystem, be they very small organizations, less digitally mature perhaps, or less well funded, or have particular challenges, all the way through to very mature organizations who might have, for example, a very mature reader revenue model.
So we design and have delivered programs now to, as I said, hundreds of organizations. Partly that's with GNI, partly that's directly. They take many different shapes and forms, so we've worked focusing on data foundations, and building data literacy or data strategy foundations. We do them on strategic alignment, one called the North Star Foundation. We have really inspirational sessions.
And one thing to flag - any of the work that we do, we'll bring in experts or leaders from the wider Financial Times, or wider FT, because they are the people who often come with that lived experience that is really, really truly valuable for our partner or client organizations that we work with.
So those are the kind of programs that, I guess at the smaller scale which, we call them the weeklies because they tend to be quite thick and fast intensive, week-long sessions, very collaborative with the cohorts of publishers that do them.
Then we do the more involved ones. We have on called Digital Revenue Launchpad that's 3 to 5 months. That's very much focused on building the case for testing. And then testing based on customer research, appetite for a particular monetised or revenue model. That could be a reader revenue model. It could be a membership model which is slightly different. It could in fact be looking more at the diverse revenue streams that your organization needs to evolve.
Aled John: And then we have our landmark one, or tent pole program which we've been doing the longest, which is called Subs Academy, or originally, Sub Slab. That's for mature or fairly digitally mature, or if not digitally, digital leaders that definitely have mature reader revenue models. So we go through the entire customer life cycle with them, doing deep diagnostic on their performance. So looking at how they're doing in terms of requiring the right kind of audience to their digital properties, their sites, their apps, how they're doing that in terms of engaging or getting commitment from those readers, whether it be through registration or otherwise, or email sign up for newsletters, how they're doing in terms of monetising, how they're doing in terms of retaining, and what they're doing at the point of cancellation as well.
Then we go through a super proactive and very pragmatic, practical phase of designing a North Star strategy together, which is effectively - what's the big hairy ambitious goal that you as an organization can hang your hat on which will see you for the next three years? Just for context.
And I know this is a long answer.
Christian Kallenberg: Yep. [laughs] Don't worry.
Aled John: The FT has built its own recent successes around a concerted North Star strategy. So we had a target to hit, one million subscribers by 2019 or 2020, and we hit it a year ahead of schedule, because we set the strategy and lined every single work stream, if you like, up to very measurable outcomes, which are the FT's way, and now many of our client's way, of measuring their success at hitting the overarching goal.
So if you have a big goal of hitting a million subs, your key outcomes that you need to define and aim for, and then every piece of work, every experiment, every hypothesis that you want to prove or disprove, lines up to these key outcomes. They might be around acquisition rate, might be around retention rate, specific capabilities you want to build, or whatever. And then we'll help them test experiments.
Sorry. That's a long answer, apologies for that.
Christian Kallenberg: No, but it's a really interesting one.
Benjamin Kolb: It's very interesting. And maybe you could talk us through a bit more, about how your services actually work? What is your team like? What is your practical work actually like?
Aled John: There are I guess a few questions there, Ben. How we start any project, even if it's only a week or a nine month thing - and often when we work directly with businesses we have ongoing work - we will do a deep diagnostic, depending on whatever the focus might be.
It could be quite tactical - we have a retention issue, and we want to know how it can design an engagement program that helps us mitigate the challenges we have around retention, or are there other areas or other hypotheses we need to prove or disprove in order to improve your attention. And what are the capabilities you need in your team in order to do that?
So we'll start often with a deep diagnostic, which looks at data, any kind of patterns of consumption, or anything we can read in the performance data if we're looking at web analytics or commercials.
It's not just the data though. We're looking at the approach that's taken by the organization. So that's obviously a lot of qualitative work as well, working with teams to get to the bottom of what they do - how they do it, any external pressures that might be impacting a typical kind of consultancy deep diagnostic - and then we tailor and co-create the strategy.
Depending on whatever the challenge is that we're aiming to solve for, we will tailor that strategy based on what we've seen in the diagnostic, obviously, so these are your immediate areas of focus that you need to improve upon.
And obviously, let's now work together on a three year choice cascade, so that the ultimate things we should be prioritising, given where you want to play and how, you can win.
And then it gets really practical. That's where the beauty of the North Star framework is. The North Star itself isn't a strategy. It's a commitment and a set of goals, and then outcomes that you are aiming to hit in order to hit your overarching goal.
But the beauty of that is it really collaboratively allows you to create cross functional coworking teams in an organization to focus on the work practically.
Often, that's where we end and we take them through that point where they have a clear road map for delivery, or we carry on working with them and support them in that endeavor. So that could be quite tactical experimentation using a mixture of tech, marketing, editorial teams, if it's a news for publishing business.
Or it could be - you need to invest in these capabilities so we're going to help you build an investment case for your board that you can take to them, otherwise you're not going to hit your overarching goal.
Benjamin Kolb: So talking about the North Star approach and the publishing industry. For the North Star metric you're aiming for, what do you find in the market in terms of different publisher types and different metrics?
We saw something on your website that's called RFV. Maybe you can talk us through these kind of metrics.
Aled John: Sure. So working back from whatever your overarching goal might be, an obvious one - and it's not often as subs number one - but we've done a lot of work with recurring revenue businesses, which often have a specific target for a number of subscribers or members or whatever it might be by a certain date.
The key learning from the FT's own journey is that you could theoretically try and acquire yourself that many customers over a period of time. But you're not going to keep them unless you have a very strong understanding of what drives engagement. So retention is - as we say with every single organization we work with - the name of the game.
Obviously you need to acquire and you need sophisticated approaches to how you can acquire the right type of customers for your offering of your business, but you need to be thinking about retention from the point that you acquire customers. You don't think of retention just at the point of renewal or just at the point of cancellation. Because if you're thinking about it then...
Benjamin Kolb: It's too late.
Aled John: Then it's way too late. So there are tactics you can deploy at the business end of retention obviously. But you need to be thinking about how you can drive engagement from the get go, that someone is interacting with your digital property, and not just digital property, but it's obviously more easily trackable from there.
Key learning from the FT is - engagement as a core component is going to be fundamental to how you can hit an overarching subscriber goal, but not just subscriber goal, revenue goal as well. Because the thing about retention and subscriptions, as we know, predictable revenue up to a point, which is why organizations love them, but if you have a serious challenge around retention, the likelier is you have a serious challenge around your retention, your engagement as well.
So the FT invested significantly in understanding patterns of engagement with its subscriber base and its non-subscriber base as well, and how engagement specifically correlates to things like retention rate, acquisition rate, lifetime value, and more besides.
So a lot of work was done to establish our kind of North Star metric, if you like. The North Star goal was hitting a subscriber number for the FT. It doesn't have to be. But the thing that was very clear to the FT is we need to have a user level understanding of their engagement score, which we know due to fairly sophisticated data science modeling.
And this is something that, with organizations we work with, is support on that data science capability building, where we can use predictive models to assess if someone's level of engagement drops below a certain score. And that's where RFE that you've heard about, where you've seen on our site, and it's fairly old news now because it's been around in the sector for quite some time, but is fundamental to how the FT measures its level of engagement with this audience.
And it's still, by the way, called out by the CEO in corporate communications saying - we've hit this many number of users with our RFE score of X - which means it's still completely core.
Because if you can predict levels of engagement, you can then predict much more accurately, levels of retention, which means you can predict much more accurately your levels of revenue based on subscribers.
So it forms a very integral part. So all the way down to - and this is the beauty of the North Star framework - all the way down from an overarching goal for numbers around subscribers, to a level of retention, so you can then be very tactical around - well, what habits do we want to drive in order to improve levels of engagement or take up of our product with our subscriber base? At what point do we see them dropping off in terms of level engagements? And so what can we do to try and re-engage them in their own customer life cycle? In the experience of being a subscriber, we've got pretty sophisticated on-boarding program from the moment they get acquired so that we're trying to instill the habit and it's still the take up of certain products.
And it's the obvious things like get them to use the app, get them to use a newsletter. That's personal to them, more specific to their wants and needs. How can we personalise the online experience for them, or in app experience, to the point that they feel highly committed?
Obviously it's not just about engagement. There's many other things that impact someone's ability or willingness to stay. External factors that the company we might not have any control over, but the more you can shift your product or offering to the utility world, something which feels completely critical to someone's jobs to be done of the day.
And the FT's in a fortunate position there, because its audience tend to consume, or a lot of its audience, at least, the ones that pay for it, organizations whose employees use it or individuals who use it for their job, perhaps, or they're just very passionate about the content, or it helps them in their financial planning or understanding of the economy or whatever else, we're pretty confident that we can monetise the products.
Benjamin Kolb: Given you have a news publisher who knows that he has a problem with the engagement of his subscriber base, are there any generic out of the box approaches that you would try out in such experiments on the news publishers digital product?
Aled John: Generic is a scary word, because people...
Benjamin Kolb: [laughs]
Aled John: I mean, there inevitably are broad approaches which could be fairly uniform across many organizations in a way. But the reality is, despite the general themes and challenges that many publishers face, the tactics or strategy that needs to be designed does tend to be tailored up to a point.
If they have a challenge around retention or engagement, then we'd look at where that existed within the life cycle. So, are you doing anything around on-boarding when they become a subscriber? What's the onward journey like from content on your site? Are you showing casing at a level of depth to a particular content theme, or a level of breath that we know both correlate to driving more engagement? Do you offer personalisation or customisation features, which allows users to preferentially pick the types of topics they want to follow? Basic stuff like that, and that's quite news-publisher specific.
Benjamin Kolb: Speaking about personalization, we offer also products that do personalization on an automated basis, like capturing what the user is interested in and doing. Not doing active personalization so the user opts in for topics or something, but we learn what the interests of the users are and try to recommend content and interaction with the user based on his preferences that we kept automatically.
Do you have any insights or experience, if this is in such a project, really driving the engagement?
Aled John: Yes, we do a similar thing in the FT. We, ourselves, haven't, it's true, gone to organizations and tried to roll out and out of the box solution to do that with others. We see strong results in the FT in terms of personalising online content that's displayed.
I know there's many exciting tools in the market and potentially your organization, Ben, could have some really exciting case studies to share as well. So I could ask you I guess.
But I know there's others like Sophie from the Global Mail, which personalises that content opportunity. Well, personalises the moment at which content is monetised or not, depending on someone's consumption of a particular type of content. And I know the team fairly well, at least one of the people who heads it up.
They have an army of data engineers that's not something FT strategies has. We have a very strong data science team, but we tend to go there and help build the capability with our partner clients.
What have you seen, Ben, with your outfit?
Benjamin Kolb: The interesting part is the core product of the publisher is obviously his content. The user's engagement is really coupled to the content the publisher produces. Really, to tell in detail if personalization makes a difference is a bit hard, because usually the engagement of users with the digital products are really volatile to the content he produces at that time. But we can definitely see that there is an impact for the users that we are driving in A-B tests for personalization. So we can see that there is a difference. But you never can really prove that there's a massive impact. Because I believe that the highest impact on the user engagement is the content itself.
Aled John: I think there is a danger with personalization as a topic that organizations get very excited about, the vast potential that it could offer theoretically. Most organizations won't or don't have the capability to do that, and they may not have the breadth of content to really need to either.
So I think often it's more start at the basics. Do you really know what needs your users have that you are trying to tailor your content offering for? And often they don't. That tends to be one of the outputs from the diagnostic phase - looking at patterns of consumption on the existing offering and seeing where the gaps are.
And there's obviously tactical things you can do in the FT, and many organizations do this very well already, by relying on email newsletters or other forms and kind of outbound distributed content, which can be more personalised through tagging of articles, and then funneling them into email newsletters, which is based more around user's preferences, and try to drag them back to sites, which we've seen a lot of success with, I think, at the FT, both for B2B users as well as B2C.
But it's not a panacea. Most organizations could do well to start with the basics and get them right, have a better understanding of user need and what their content is and does and why.
Because most organizations we work with, not only do they not know that, but they're slightly blindly just churning stuff out for the sake of it, without a good understanding of - being digital first means you should be laying on that scrutiny for what need you're actually meeting, and adjusting your proposition accordingly.
Benjamin Kolb: So looking at the publishing industry, there are various publisher types, so, news publishers versus magazine style publishers. So do you have completely different approaches in the consultancies, or in the tool set?
Aled John: I'll take a step back. The FT is not just the newspaper. The FT, interestingly, over the years has either developed itself or acquired lots of specialist publishers as well. So we have a whole division called FT Specialists which has many titles in it, titles like Investors Chronicle, or The Banker. They are examples of specialist media, which is a very different type of consumption. Again, and a very different type of customer.
So we do flex our offering based on, again, a position of knowledge from within publishing, news publishing - and the FT isn't actually a typical news publisher either, obviously, it's not the New York Times, it's not The Times of London, it's not The Guardian - the news it offers is more tailored and more focused on a particular niche. So it's more specialist than the commodity of generalist news.
And again, a fortunate position to be in, because you tend to be able to charge more both from an advertising perspective as well as from a reader revenue perspective, be those readers through B2B route or a B2C route.
So yes, we do adjust our offerings. But again, there are prevailing themes and approaches that we know, but it comes from a position of knowledge, with the division of the FT, as I said, representing both specialist press as well as more news, e-press, and its main title.
Christian Kallenberg: Aled, let's stop talking about Aled the consultant, but let's start talking about the Aled the consumer. What does a media outlet need to do to keep you as a happy customer and paying customer?
Aled John: I am going to be honest - and you're going to expose me here, Christian - I used to be a voracious consumer of many different types of media. I guess this is a cliche and a normal thing. Now I've got two small children. We have a dog, as you've heard. [laughter] And a very busy working life.
So I have limited time to consume. So focusing on the offerings or the titles that I rely on religiously. And much of that is based out of habit that has been driven into me from a very, very young age.
So in the UK, the media market has strong broadcast propositions as well as strong publishing titles. I've always read the FT.
Christian Kallenberg: Of course.
Aled John: I did. I have to say that. [laughs]
Christian Kallenberg: Sure. From kindergarten on.
Aled John: Exactly. But, no, I guess I was raised reading the Guardian and watching the BBC. But I had started my career at ITN. So again, I still watch those. To keep me engaged, less is more for me. I have little time for 90% of the news agenda. The stuff that really matters to me I guess is the things which resonates with me on a personal or professional level.
Christian Kallenberg: And talking about limited time, Aled, we are running out of time here today. Thank you so much for taking the time.
Benjamin Kolb: Thank you very much, Aled. This was very interesting.
Aled John: Thank you both very much, indeed. It was great to discuss all of the above with you.
Christian Kallenberg: And maybe we do a second episode in a few years time. Let's see.
Aled John: That would be great. I'll bring the dog. [laughter]
Benjamin Kolb: Thanks, Aled.