Left field rides right

Guardian Media Group CEO Anna Bateson started her marketing career at Bloomberg in the nineties. In the three decades since she’s headed marketing divisions at ITV, MTV and spent seven years at Google, initially heading marketing across EMEA for Youtube before leading its global consumer marketing operations out of San Francisco. Following a three-year stint as The Guardian’s chief customer officer, she returned to take the top job in 2022.  

After the coronation of the right, Bateson’s now riding an unexpected audience wave for the left-leaning masthead. The question is whether that translates to revenue growth – but the business has long hedged its bets and is now experimenting further, taking a hard line on consent, cookies, targeting and tracking initially in the UK market in a bid to boost ad revenues, or subscriptions. Ideally both.

Google: ‘it’s complicated’

While ignorance is no defence, there’s a theory that Google’s sprawling business units often don’t have visibility over the activities each is engaged in. Given her firsthand view on its inner workings, Bateson wouldn’t comment on the reams of evidence alleging that Google colluded with Meta to kill header bidding – a digital ad auction mechanic that enabled publishers to boost yields through increased competition – crunching ad revenues as a result.

But she said The Guardian will make a submission to the latest investigation launched by the UK Competition and Markets Authority into Google’s search and broader ad business. (The CMA aims to gauge whether Google has too much market power, whether it self-preferences its own services and whether it is hoovering up user data without informed consent, and the use of publisher content without fair terms – including payment. It will make a decision on its findings by October.)

It’s a tricky line for Bateson to walk. In Australia, under the news media bargaining code, The Guardian still has 18 months to run on a five-year deal that it used in part to fund the hires of circa 60 staff.

Other publishers that took three-year deals have recently had to renegotiate with the only game in town after Meta balked, with Google reportedly squeezing terms.

“We have complicated strategic relationships with Google, some of them are very positive,” Bateson told Mi3. “They have been a very big advertiser for us for many years. We do have all sorts of partnership deals with them, we do use their ad stack – and yes, I'm sure that they're taking a significant percentage.”

While the likes of Anthony Catalano-owned ACM have publicly stated they have renewed with Google on “similar” terms, former Nine publishing and digital boss Chris Janz, now heading Scire-owned Capital Brief, has disputed that claim.

Guardian Australia boss Rebecca Costello backed Janz’s view.

“They've definitely done that with all of the three-year terms. [They] have definitely made them smaller – that's fact. They're a smaller deal than they were. That's certainly not what we're aiming for, and we haven't got to the detail of that conversation,” said Costello. But, “we’re always talking to Google.”

Other publishers have blamed the crimping of bargaining code cash, circa $80m a year via Meta, when making mass redundancies and gutting news rooms, a house of cards long signalled.

Hiring 60 staff would imply a potential annual cost increase of perhaps $5m-plus for Guardian Australia. But the firm is now forecasting revenue growth both from advertising after a brutal 2024, and from reader revenues – donations and subscriptions – which make the bulk of its takings, circa 55 per cent in Australia and 60 per cent globally. Advertising sits around 25 per cent, the remainder coming from licensing deals.

Targeted ads pincer

“I think there is hope,” Bateson said when asked whether publishers could compete with big platforms when the CEOs and CFOs of major advertisers are almost universally pouring an increasing share of their marketing budgets into lower funnel performance advertising, largely Google, Meta and Amazon.

“We had a bad year last year, because, basically we got hit by an ad recession, and particularly in the US, which really surprised us. We were overexposed to various sectors that that really suffered – technology, entertainment – and the sectors that really held up were luxury, travel, which we just weren’t very strong in,” said Bateson.

“It revealed a lack of breadth in our ad business in the US, which we took some time to recover from. But this year will be better. We will go back into growth in all of our markets from an advertising perspective – advertising will be about 25 per cent of our revenue this year.”

It will be interesting to see how the publisher’s move to force readers to either accept all cookies and targeted advertising in the UK, or pay a monthly subscription (£5, $10.24) for an ‘ad lite’ version with non-targeted ads, impacts both sides of the ads/subs equation as well as readership. 

If successful in increasing revenue without significantly denting audience numbers, logic suggests the initiative, spearheaded by global ads chief Imogen Fox, would be implemented in all markets. Asked about that prospect, the company didn’t explicitly rule it out: “It is a UK product and there are no immediate plans to roll it out in Australia.”

Trump, dump, pump

Bateson said audiences are “probably flat” over the last year, but ironically, given President Trump’s disdain for the ‘mainstream media’, are now firmly on the up.

“It was trending down at the end of last year. It's been trending up this year, just because everyone's fascinated by Trump.

“The dynamics of that were really interesting, because post-election, everybody was exhausted [and] turned away. There was anxiety, particularly in the US team, that this was symptomatic of just everyone switching off.”

But since the inauguration, “it’s just powered back … not just in the US, literally everywhere. Everyone has re-engaged, no one can look away”, per Bateson.

“Everyone's fascinated, everyone's coming at it from their own particular angle and because he's so busy – it is genuinely about flood the zone – everyone's finding something that they need help processing or understanding.”

Whether audience gains translate into ad revenue gains remains to be seen, but Bateson forecast group reader revenues would increase between 7-10 per cent in the coming financial year (The Guardian's year runs to 31 March). Across ANZ, reader revenues had increased 15 per cent year on year to the end of January 25, with direct reader revenue currently making up 55 per cent of the ANZ business.

“Every market around the world is now growing, and the fastest growing market is the US. Unsurprisingly, the biggest single market is the UK, but the US is probably catching up fast,” said Bateson. “That has completely reversed a plateau trend that we've seen in some previous years – and we're not only growing in terms of net acquisitions, but we're also growing in terms of ARPU [average revenue per user].”

Which implies The Guardian’s donating users are digging a little deeper.

“Yes, they are giving more and they are really loyal,” per Bateson.

“We call them supporters, but the dynamics are the same as with a subscription. The interesting thing is, they are willing to give more [but] you have to be offering them demonstrable value for that. They're not just going to give more. You have to actually kind of employ the same sort of techniques that you would with a subscription.”

Trust problems

The latest Edelman Trust Barometer suggests the media is now Australia’s least trusted institution, which appears counterintuitive, given news audiences are increasing, up 3 per cent in 2024.

Bateson thinks that presents both a challenge and an opportunity. “Within that, I think there is still trust in particular brands.”

She points to recent research out of the UK by Channel 4 highlighting how Gen Z in particular distrusts news media, placing greater faith in the individuals and influencers they follow on social media.

“Overall trust in institutions is going down, that's really true of news and media. So there's nothing that's bequeathed just by the fact of an institutional heritage. I think within that, you've probably got individual brands that still have trust, but I think you'll see different dynamics against age groups within that, unsurprisingly, and you've definitely got a rise of trust in individuals.”

Mastheads as influencer factories?

The rise of trust in individuals versus institutions, and what to do about it, doesn’t get discussed enough, per Bateson.

“Legacy or established media ought to be good at this. We've always had columnists. We've always had individuals who've had voices and relationships – and actually transitioning them into a modern creator economy really shouldn't be that difficult,” said Bateson.

“I think the other piece of this, which is very connected, is the rise of essentially a much more intimate form of media.” She nods to the boom in podcasts, the explosion of newsletters and substacks.

“That sort of intimate media is very suited to an individual, because there’s the authority of your voice, not being constrained by time, that sense of someone's talking to me, they feel very authentic, it's in my ears.

“But there's no reason why established brands and traditional media can't lean into that. We've leant very successfully into podcasts, very successfully into newsletters; we've always had people who have their very strong sense of opinion and voice. We’ve just got to bring them together in a way that resonates and that works in environments where younger audiences spend their time.”

Some would argue that traditional publishers are not set up to enable that kind of creator model.

“Potentially, but I think that's a problem that we can solve,” said Bateson.

“You already solve it with podcasts … already solve it with newsletters. You can already see journalists leaning into [both formats] where their personalities become very tangible and relatable. I think the interesting piece of it is, do you have to crack a different business model and relationship between individuals than we traditionally had, and how do you think about that? Can you build products with people where they share in it?”

Giving journalists skin in the game would provide stronger incentives not to monetise their audience connection via solo ventures, but does the trend point towards personal brands becoming stronger than masthead brands?

“A lot of people would write that. I think that can be overplayed,” suggested Bateson.

“I think the institution does bequeath the individual …. It's like an introductory agency. It gives you the platform in order to build that relationship. You get talent that emerges – whether it's columnists, whether it's food writers, whether it's cultural critics – you see individuals emerging within those bigger organisations,” said Bateson.

“It's up to those organisations to make sure that those individuals can thrive. Some of them will leave. Some of them won't.”