For French newspaper publisher Groupe Figaro, the best way to make money in the media is through lots of ways.
Having this open mind has become an enduring mindset for many publications these days. There is a lot of uncertainty in the business of media to be sure of anything. Questions remain over whether the depreciation of third-party addressability will help or hinder publishers, and whether they can, in turn, ever have more control over where advertising dollars end up.
It is no surprise that so many newspaper groups are defying long-standing plans for diversified revenue.
Le Figaro is no different. In fact, its own long-term plans go back to 2017. It then decided to build its business on four commercial pillars: advertising, membership, commerce and licensing.
Took a minute, but the plan is starting to go well. And it could not have happened in a more critical period. Groupe Figaro’s business was crippled during the pandemic – so much so that the owner of Le Figaro newspaper, which has 1,850 employees in 47 other France-based titles such as Le Figaro Magazine and Le Figaro Voyage, There was a deficit of €7 million ($7.6 million) in 2020. Fast forward a year to 2021 and the same business generated record cash flow of approximately €50 million ($54.3 million) EBITDA.
Not that this should be surprising. Media conglomerates have been talking about diversification for as long as tech companies have insisted they are not media conglomerates. The much-awaited pivot to membership around 2017 is a testament to this. However, the challenge for publishers is moving beyond charging people to read content to making money. Only a few of them have been able to do so. That doesn’t mean it isn’t possible. It takes a lot of trial and error, said Bertrand Gee, head of digital at Groupe Figaro. However, like any bet, it is still a gamble. Gié discussed the payment to date.
practical about advertising
Gee is prepared to be very excited about the ad, even if the outlook is looking positive for change. Last year the €500 million ($460 million) group Figaro was driven by a large jump in advertising revenue, up 15% from the previous year. Dig deeper and there’s more reason to be cheerful: Much of 2021 came from digital advertising, which grew 14% over the period — an encouraging sign for any media exec, right? Well, not quite: More than half (55%) of those digital sales come from programmatic — the future of which is shrouded in uncertainty.
“We’ve tried to develop our understanding of how programmatic auctions work over the years because it’s not something we’ve been good at historically,” GE said.
Unsurprisingly, he is cautious. He also won’t say whether he thinks the loss of third-party cookies will help or hinder publishers. However, he is clear on one thing: the industry is moving towards a world where identity will not be tied to a single device such as a cookie, but will be spread across multiple factors.
In turn, Groupe Figaro is testing various ways to easily and securely share its data with advertisers who are looking for alternatives to third-party cookies. This can be through a private marketplace, a direct data-sharing relationship, or a combination of both. The media group is also looking for relevant solutions if they do not pique the interests of the advertisers.
None of this gives much guarantee. Ultimately, it is the advertisers who decide whether media owners like Groupe Figaro or Google et al have the better money for them. The truth is that most advertisers are fine with the biggest platforms. Yes, they grade their own homework but they are doing so precisely, the thinking comes – right or wrong.
“Advertisers always say that newspaper brands are really important, but there is a disconnect between what they say about supporting our business and what they actually do with their money,” Gee said. “Maybe we’re not good enough at interpreting our value. Or maybe it’s the way the industry is set up to spend money a certain way. I don’t know if third-party cookies are gone. Whether anyone changes or not.”
Membership. grind
To say that GE newspaper is happy with Le Figaro’s subscriber numbers would be an understatement. It now has 400,000 subscribers, of which 250,000 are digital only. It’s not a big race — The New York Times added 375,000 digital customers in the last three months of 2021 alone — but it’s a huge improvement over where business was in 2016 when it was around 60,000. Not least because building any sizable membership is a slogan — a coherent, cultural struggle to keep the focus on the goal, Gee said.
“Ideally, we want between 250,000 and 400,000 digital customers, but the numbers we have now are just a start,” he continued. “It’s a number that’s 100% margin — it’s a fixed cost activity. That can help us make big moves when it comes to turnover and profit.”
It’s hardly a surprise that growing subscriptions are so low; Le Figaro’s own account in 2019 made this abundantly clear. Still, it may be natural to assume that the publishing industry has devised tried-and-tested shortcuts. This notion belies the hard truth about subscriptions: Publishers can’t hack their way to sustainable growth. Take Le Figaro for example. Its membership success is less about discounts and promotions, more about how it stoked churn.
“Retaining a customer is as important as getting them in the first place,” Gee said. It’s hard to strike a balance at the best of times—but especially when the type of content that convinces someone to start a subscription isn’t necessarily what convinces them to keep it. For example, lifestyle articles are the main reason people subscribe, but they also provide a reason for canceling them. All these little details matter, Gee said.
“Even the platform on which someone initiates a subscription can reveal a lot,” he continues. “So on our app people subscribe for a month and then they unsubscribe. We are watching this closely as 50% of our customers come through the app. Eight out of 10 of these people do this through the iPhone.”
chasing the e-commerce dream
Every media company says they are a commerce business these days. However, saying it and doing it are two very different things, as Groupe Figaro’s execs can attest.
The pandemic made sure of it. Prior to 2020, the media group was on its way to building a healthy e-commerce business around online travel and lifestyle. The turnover for selling items such as theater tickets and wine was €120 million ($130.4 million). Then the pandemic happened and everything went sideways. Even now, the business has not fully recovered. March 2022 was the best month for ticket sales in two years, GE said. This is still 20% less than the sales sold by the group in March 2019.
No wonder G seems more excited than his nascent – albeit challenging – endeavor to sell wine. In short, it wants to make a side business in wine recommendations. People will flock to the dedicated Le Figaro Vin site to read and possibly buy bottles of wine. Encouraging as much as the site’s potential, it is nowhere near ready to be a lifeline for the media conglomerate. Ongoing investments are expected to change this. It has already hired a wine journalist to produce more content for the site and trial selling wine tasting events. Ultimately, it wants to create a wine club that people will pay to be a part of.
“I’m not sure if our bet on e-commerce will work, but we’ll try to have an audience,” Ji said.
In some cases this means making new discoveries and relocating, such as granting licenses that have previously made many publishers uncomfortable.
Licensing. Yes, There Are Platforms That Actually Pay Publishers
Like broadcasters, Le Figaro gives the rights to publish articles and illustrations to a number of publishers.
It’s a small but steady business for the publisher – around €4 million ($4.4 million), to be exact. As small as those numbers are, they represent something far bigger: the idea that large online platforms will pay publishers for the right to display their content. In February, Google entered into an agreement with French publishers, including Le Figaro. A similar deal was done with Facebook in October last year. It’s essentially a new income stream for Le Figaro, GE said. Call it a Pyrrhic victory.
“We have been fighting for this arrangement for a decade,” Ji continued. “We have had to go through the European Parliament as well as the French courts to get a platform to accept this position.”
