The Financial Times reorients its business around ‘global paying audience’

The Financial Times has introduced a new “North Star” goal for its business which is designed to help grow audience revenue beyond its core journalism offerings and across its broader portfolio of products and services.

Its new “global paying audience” metric (GPA) reflects subscribers to the FT’s core digital product, but also factors in paying customers for its live events, subscribers to publications in its FT Specialist division, and print newspaper circulation. The company said it currently stands at a global paying audience of 2.6 million and expects to reach three million by 2028.

The FT’s original “North Star” goal was to reach one million paying subscribers, which it achieved in 2019. But in 2022, management decided its next iteration should have a wider scope to reflect its efforts to diversify and expand the ways it generates revenue directly from audiences.

“Global paying audience is a recognition that the prior goal hadn’t sought to bring in the relatively newer parts of our business, and actually we recognized there were parts of the business that felt slightly excluded,” the FT’s chief data officer, Kate Sargent told Toolkits. “This was a means to address that and to create a more overarching goal that we can all get behind.”

The move comes at a time when many publishers are attempting to take a more holistic view of audience monetization – often referred to as “total revenue optimization” – which seeks to understand and optimize revenue generation across a range of sources in an effort to maximize overall revenue.

The FT first introduced the GPA metric internally in January 2023 and has since been embedding it across all parts of its organization – including its commercial and editorial teams. Digital monitors around its offices keep staffers updated on what GPA is, what its GPA targets are, and how it’s pacing towards them. Company executives have also emphasized the metric during company updates and progress meetings.

“It’s a constant heartbeat, a constant communication stream throughout the business,” Sargent said. 

What’s counted in GPA

GPA tracks individual paying users across five parts of The FT Group’s business: FT.com’s paying digital audience; FT Specialist paying subscribers; FT Live paying attendees; FT newspaper circulation (retail and subscribed print sales) and FTChinese.com paying subscribers.

The GPA metric does not deduplicate customers of multiple products, however, meaning if a person subscribes to FT.com and a title within its Specialist division they would be counted twice. That decision was made consciously to tie GPA closer to revenue, Sargent said, and also to reflect the opportunity the company believes it has to cross-sell products to a larger portion of its existing audience.

Metrics that matter

The GPA North Star is part of a broader framework developed by the FT called “metrics that matter”. The framework outlines a range of metrics that sit underneath GPA and are used by different parts of the business to monitor more granular aspects of performance, and the ultimate goal is for teams across all parts of the company to understand how their day-to-day activities and decisions “ladder up” to impact GPA. 

Distinct sets of metrics have been developed for use by seven different parts of its business so far, but the company is in the process of developing more. Metrics that matter for its subscription business might include those reflecting value (or average revenue per user), loyalty and retention, acquisition rates, and customer acquisition costs, for example, but its legal team might track very different things to understand how its activities contribute to movements in GPA.

“It’s been really powerful for bringing it to life and helping anyone, wherever they are across the business feel a sense of contribution to that north star… It’s not just what you might consider the more commercial parts of the business that can get behind this. It works for any part of the business,” Sargent said.

Understanding what drives GPA

The GPA concept is a relatively new one, so understanding exactly how it can be influenced is both a work in progress and a priority. The company has completed initial rounds of analysis to gain an understanding of how variations to its metrics that matter might affect GPA, but gaining a nuanced understanding will take time and iteration.

Ultimately the company hopes to get to a point where specific goals can be set throughout the business with a high degree of confidence that they’ll ultimately drive an uplift in GPA. 

“We’re at quite an early stage of disseminating that learning into the business to really establish a feedback loop, but the reason we’re doing it is to get to a point where we can sit alongside our business units and say ‘this is the goal for this unit, this is how you’re tracking, and this is how we can influence it if we’re a bit off course.”

Optimizing for GPA

Another major goal for GPA and metrics that matter is to help the FT understand where it should be investing across its business, and it’s now baking both concepts into its investment planning process. The intent is to establish those metrics across the company to the point that requests for investment in specific products or projects will need to be framed in the context of how those investments will help drive GPA.

“We don’t have infinite resources, so this framework is a really powerful means to help us understand where we place those resources and where we invest,” Sargent said.

The framework could also help the company decide which revenue sources are most beneficial for the company and which streams might be prioritized over others.

“It’s a means of starting to establish comparable language across different parts of the business and to make more transparent trade-offs… We’re not seeking a certain preferred route to revenue over another actively. It’s something that these metrics will help us arrive at.”

Volume vs. value

The GPA metric reflects the volume of FT’s paying relationships as opposed to the value or revenue potential of those relationships, which is notable given that many publishers say they’re increasingly prioritizing overall revenue yield over customer volume when it comes to their audience revenue businesses.

The company decided it was important to arrive at a single “North Star” metric, but everything it measures in its framework has corresponding “guardrails” around value that ensure it’s not optimizing towards volume at the expense of revenue. 

“We are making sure we’re not compromising value in the pursuit of GPA. We know there is a relationship between GPA and revenue, so we have confidence that it’s the right thing to do as long as we keep those guardrails and thresholds in place,” Sargent said.

Avoiding bad incentives

Incentivizing editorial departments around specific metrics is often fraught and can lead to unintended consequences. Some publishers that have implemented traffic or subscription goals in recent years have found they can quickly and drastically influence the nature of the content that’s produced and can ultimately undermine publishers’ editorial missions and brands.

One of the reasons the FT landed on GPA as an overarching metric to sit across both editorial and commercial was the middle ground it struck between volume and value.

“When choosing any metric it’s really important that we ask ourselves ‘What is the outcome or behavior that we’re trying to encourage? And what are the behaviors we really don’t want to encourage?” Sargent said. “What’s great about GPA is we know there is a relationship to revenue and profit, yet it’s somehow abstracted and sideways from that so it doesn’t have that overt financial imperative linked to it.”