The New York Times is winning at digital

The NYT just released a blockbuster earnings report attributable heavily to their digital transformation. Insiders share the five key secrets to their surprising success.

new york times building
James Cridland (Creative Commons BY or BY-SA)

Most of today’s media “success stories” are about digitally “native” companies like Google and Facebook. Meanwhile, many of the great brands of the pre-digital era seem to be struggling for mere survival in the face of digital disruption. And it’s hard to think of a media segment more threatened by digital than newspapers.  As advertisers have shifted more of their budget to web and mobile,  almost 70% of all newspaper advertising dollars have evaporated over the last 15 years.

Yet something astonishing is happening at the company that President Trump regularly demeans as “the failing New York Times.” NYT stock is up nearly 60% in the last six months to a nine-year high, and in May, the company issued its quarterly earnings report which reflected the profound impact of their efforts at digital transformation. 

According to the report, digital subscription revenue increased 40% year-over-year.  Furthermore, among The Times’ three million subscribers - a threshold it crossed earlier this year - 2.2 million are paying digital subscribers, representing almost 70% of their total subscriber base.  Although print advertising in The Times declined around 18% year-over-year, those losses were more than offset by increases in digital subscriptions and digital advertising, resulting in year-over-year increases in both revenue and profitability.  As CEO Mark Thompson said in the Q1 2017 earnings report , “These results show the current strength and future potential of our digital strategy…to deliver substantial revenue.”

So how did they do it in an era where so many great pre-digital brands, both media and otherwise, are failing to compete effectively with digital disruptors?  I sat down with two senior executives who are helping lead The Times’ digital transformation.   In order to understand the key principles behind their recent digital turnaround, I met with Kinsey Wilson, EVP, Product and Technology, and Editor for Innovation & Strategy; and with Tristan Boutros, SVP & COO for Digital Product, Strategy and Design.  In our far-ranging discussion, five key themes emerged that form the basis of the approach The Times has pursued, and which, has thus far, exceeded their forecasts and expectations.

These five themes are not unique to newspaper or media companies, but can be applied to most, if not all, companies looking for the path to successful digital transformation.

1. Leveraging Customer Data to Increase Subscriptions

While many newspapers have declining print subscriptions and are challenged to get customers to pay for digital content. Boutros and Wilson attribute the recent boom in subscriptions to efforts to better leverage customer data across marketing. Wilson explained, “They've…professionalized the way in which they manage the funnel, essentially how we get people to the point where they subscribe. [As a result], year-over-year, we doubled the number of quarterly net new [subscriptions].”

According to Wilson, “It's been a combination of two things. It's been really modernizing our data environment, and just our sophistication around analytics, and understanding how the audience arrives at a point where it's willing to subscribe.”  He added, “Where we were a year ago was essentially a fairly crude mechanical mechanism where you see ten pages; you hit the wall; you subscribe, or you don't. It was fairly binary. Now, we understand, depending on how often you come, how engaged you are with The Times, what your particular profile is, what's the next action we can take to make it a more meaningful experience to get you back more often, to drive you closer to subscribing.”

“We have become a very data-driven company,” Boutros described. “We've built what I think is a very productive partnership between data, technology and our partners in consumer revenue to actually put more control in their hands as well. We're trying to integrate tools, so at various points in the customer journey [marketing] can feed the messaging required to engage customers in a way that resonates, and so it actually gives a lot more autonomy and control to our marketing partners.”

This type of personalized data-driven sales funnel is par for the course for digital leaders such as Google and Amazon, but is typically far less sophisticated at pre-digital media companies. The benefits The Times have delivered via this approach are instructive to those hesitating to make the investment to become world class in this area.

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