How Come British Financial Journalism Is Such a Hit In The US?

Philip M. Stone October 15, 2008

In a biting US magazine industry downturn that has seen a near 10% drop in ad pages, The Economist, the British newsweekly magazine, still keeps roaring ahead with increased ad pages, more circulation, and it has even hit a new newsstand sales record in spite of (or perhaps because of) its hefty $6.99 price. And then there is The Financial Times of London that says its US newsstand sales increased 30% in September. So, how come Americans want to read what the Brits are saying?

It probably boils down to successful brand building exercises over the years and it just goes to show  that during turbulent economic times people really are willing to shell out more at the newsstand to get additional  information that helps get them through the investment day. The trick for both of these publications is to hold onto these new readers once credit and equity markets calm down.

The easiest way to do that, of course, is via subscriptions and The Economist has run a series of successful marketing campaigns over the years to boost American subscriptions.  Paul Rossi, Economist Americas managing director, told MarketWatch his publication’s campaign in pushing for three-year subscriptions has worked “fantastically well”. He also seems to believe strongly that if you’ve got it, flaunt it – hence the expensive $6.99 newsstand price compared to, say, Time at $4.95. Rossi believes in a high price for a magazine that has continues to build  brand loyalty. “Once you’ve built a brand, you can put your prices up,” he said.

That all sounds very similar to what John Ridding, Financial Times CEO, told Reuters. “What the crisis is doing for our readership and audience is pretty remarkable. I think it really underlines the idea that at a time of turmoil, people really do need trusted guides, and are prepared to pay.”

Not that the US doesn’t already have its own home-grown “trusted guides”. Of course there is the Wall Street Journal, the Forbes and Business Week magazines and the like, and yet it seems there is an inclination by some to step back from just a domestic read of the situation and see what others have to say. It’s a little bit like there is a worry the domestic media can’t see the forest for the trees, so let’s take a look by those who may see it with different eyes.

And just as this economic crisis, as we are told time and time again, is not just an American crisis but an international crisis, so, too, the solutions must be international, and so, too, it seems our news search is international, too.

The majority of readers to the FT Web site, for instance, are from the US. Helping build that brand was the FT decision last November to open the site up to everyone for the first 30 stories accessed each month. Go over the limit and you’re invited to subscribe. Also some premium material, such as its highly regarded Lex column that makes some serious recommendations on what to do and not do, was also kept behind the pay wall.

No doubt the principal readers of the FT in the US continue to be on Wall Street but maybe Main Street, at least on the web, is taking a look, too.

Building the brand name for The Economist in the US hasn’t come easy. The title alone is a put-off to most on Main Street who have never really wanted to get involved too deeply in national and international economic issues. That the magazine did far more than that is what word-of-mouth and some smart mocking marketing has achieved in the many years it has been cracking the American market. Now with the economy front and center the title may not be such a turn-off.

Through this year the Economist has seen its ad pages grow 5.9% attracting 69 new advertisers. Compare those ad pages to Forbes Magazine where they are not only down 18.5% but now the Economist is leading it by 12 pages on the year. In the more general news weekly field the Economist ad page account is well ahead of Time Magazine that has seen a 21% fall this year.  

On the circulation front, however, the Economist still has a long way to go. Time, Newsweek and US News & World Report together have just under 8 million circulation whereas at the Economist it is around 750,000. But that is still around a 50% increase over the past five years – not bad considering this was the time of declining circulations for so many magazines.  And the magazine hit a milestone this year by reaching 100,000 newsstand sales although that is still only around 12% of sales – the rest coming from subscriptions.

So why do people read the Economist? Perhaps it is for articles such as the one back in 2003 when it noted the skyrocketing values of home prices internationally.  It warned then “there is a risk that house prices will take such a tumble that they will take whole economies with them”.

Makes one wonder that if a British newsweekly magazine could spot that, how come Mr. Greenspan didn’t?