This is a lightly edited version of a case study that originally appeared on our Innovate Local website.
By Niklas Jonason
Much of the success has been down to a focus on supporting local businesses. Newquest’s sales people offer local businesses help with advertising on social media, in search as well as in the group’s own print and digital brands.
Founded in 1995 and headquartered in London, Newsquest Media Group is owned by US-based Gannett. Newsquest has just under 2,000 full-time employees and operates more than 165 newspapers, of which 25 are dailies, and some 40 websites across England, Scotland, and Wales.
The publications range from small local weeklies to larger regional dailies, serving communities with local news, information, and advertising. Newsquest claims their brands reach about 75 percent of the local adult population.
They have around 55 million monthly unique visitors to their sites, which generate more than 250 million page views.
Known for its focus on digital transformation, Newsquest has invested significantly in online platforms to complement its print offerings. Despite criticism over its cost-cutting measures and their impact on local journalism, Newsquest remains a prominent player in UK media, emphasising its commitment to delivering local content.
Newsquest’s transformation from a traditional publisher to a local digital marketing agency has proven to be a successful strategy, enabling the company to diversify its revenue streams.
By launching the LocalIQ brand, Newsquest effectively tapped into the growing digital advertising market, offering local businesses tailored solutions such as social media ads, search and display advertising.
This shift not only capitalised on the company’s extensive local audience but also positioned Newsquest as a trusted digital marketing partner in an increasingly competitive space.
The company’s focus on smart bundling, integrating both owned media and third-party platforms, such as Facebook, has driven higher engagement and retention for its clients.
With digital advertising now accounting for over 50 percent of ad revenue, Newsquest’s shift to digital marketing services is a sustainable business model that allows it to maintain strong local ties while expanding its reach and impact. This approach helps to ensure long-term growth and secures Newsquest’s position as a leader in both local news and digital marketing.
Morgan Stevenson, Digital Transformation Director at Newsquest Media Group recently explained how they are making this transition work during an Innovate Local webinar.
Sales of Facebook, Google as well as Newsquest’s own brands
What caught our attention to the case presented at this webinar was an interview with Newsquest Chief Executive Henry Faure Walker where he said much of the company’s success was down to the focus on having local sales people who offer to help local businesses with advertising on Facebook and Google as well as on Newsquest’s own print and digital brands.
“We’ve tried to diversify away from being a pure publisher to being a digital marketing agency and that’s been pretty successful,” Walker said in that interview.
Morgan Stevenson, the presenter of this case was one of the main people behind the success.
“It’s not a single silver bullet that has got us where we are,” responded Stevenson to this introduction and continued, “we still have got a long road to go to full sustainability. But we certainly are more confident than ever in the positive future that awaits us. And there is a lot of work left to really get us into a place where we would like to be. We’re going to share a bit of the journey so far today.”
“We’ve started to do things like paywalls to help with the decline in circulation revenue, which is still a fairly large part of our revenue. But it’s really been our local (advertising) solutions which has been the real engine room of our growth. And a part of that new engine was the introduction of a new digital marketing services (DMS) offering within the local businesses that we deal with. And again, that’s something that has been one of the key ways we’ve diversified our revenues. So it’s something that we’re very proud of.”
A ‘go-to-market’ brand: Local IQ
“Fundamentally, we’re still very much driven to maintain a strong margin in this evolution while we continue to offer the best value and support to our customers,” he said. “We took one very bold step very early on and that was to introduce “a go-to-market” brand to identify ourselves as a local digital agency.”
The brand “LocalIQ” summarises the focus on local and the intelligence of utilising industry leading technology and data, he noted, be it their own data around their audiences, “or actually data from the investment that Gannett had made into acquiring pure play digital marketing services, whose proprietary technology gave us a real market edge in order to support businesses that were already advocates of spending some of their marketing budget in other solutions that aren’t owned by us, like Google AdWords, Bing AdWords, Facebook advertising and SEO expertise. And so that really gave us a bit of a jumpstart.”
An important decision was to change the approach to the (advertising) market in all of our local sales teams from introducing themselves as coming from the local newsprint brand, and to now introduce themselves as LocalIQ and as the agency that has exclusive access to these historic brands and audiences, Stevenson said.
This was a fundamental step in their journey, Stevenson said, explaining they made that journey because most advertising today is digital. Newspaper ads have a decreasing market share. Newsquest take from the growing digital share while still protecting from the continuously shrinking print share, which Stevenson remarks, is stabilising:
“We are seeing this in our newsprint revenues,” he said. “We actually grew our newsprint revenues so far in the first half of this year. It’s been a little trickier in the second half of this year. But we’re encouraged that it is not an accelerated decline as what’s seen previously. And there is an increase in the overall advertising spend online. So there’s more opportunity to go after.”
Changes in digital ad market
“We see the market positioned in a way where we can help local businesses to go after these new opportunities,” Stevenson said. “The customers need support in understanding that multiple tactics are needed in order to get across the entire purchase funnel of trying to drive your brand and your customer engagement.”
“If we’re not offering all these solutions, we are in danger of being weak in the market,” Stevenson said. “We need to maintain our role as the trusted local advisor and help businesses navigate this ever complex opportunity for them to drive their business. So it’s really how we’re very confident this is the right approach.”
Shifting sales structure
Concerning how we’re structured and how we’ve approached shifting both our sales structure and the investment in how we develop our staff. In a breakdown of the types of businesses across the UK and kind of typical spend levels of different types of businesses (see below) many traditional newspaper advertisers appear on the left hand side. Stevenson thinks that many newspaper sales organisations will see very similar characteristics of more typical print advertisers.
“As we go further to the right hand side, you see the larger businesses that have already made the switch to e-commerce and pay per search opportunities. These are the sort of traditional newspaper advertisers that we haven’t seen for a long time. So how did we approach this? Well, we’ve moved to present ourselves as the local trusted agency.
As Newsquest do not have full coverage of the kingdom they are part of the national sales network 1XL. cooperative which is composed entirely of established “blue-chip publishers,” ranging in size, scale and locations all united by a commitment to quality journalism, serving local communities and delivering for advertisers. See on the extreme right in the slide above. This way, Newsquest pools their inventory and data with a third party that represents them as well as other publishers in the UK. And that way we have a greater offering in that scale, Stevenson said.
“Looking across local markets, the existing advertising sales team has seen a true transformation in the way that we have restructured, re-pivoted our approach to certain customers, the pricing approach to try and drive greater value than just focusing on price. We have really invested in their digital understanding on how to proposition the myriads of products and solutions,” he added.
“We have worked a lot on how we can extend the sales people and open up the DMS opportunity into this team,” he continued. “We have found it really difficult and quite challenging for them to be experts in offering the full suite. And so the sweet spot we continue to progress in is actually to extend and separate those teams and have digital advertising focused teams and digital marketing focused teams. That way we have teams that are focused more around taking the existing newspaper and display orientated customers and start to extend their spend across multiple products.”
When to engage and not engage the digital teams
“The more products the customers buy, the stickier they are and there’s less customer churn,” Stevenson noted. “We are working on to grow the average order spent per month, because actually one of the challenges we face with the fantastic technology that we have, is that a decent enough spend over a consistent amount of time is necessary for the technology to work. It’s the same if you’re spending directly on Google’s platform. It’s not a transactional, just spend a bit of money, get a few clicks and you’re sustainable in how well you know that long-term impact on their business.”
“So we see this as the right way to position this ability to engage with the customer base. We refer the customer to the digital teams when that business is in the right position to work with a marketing expert and offer the other parts of our segments. Now, when I think about our sales teams, there is a significantly larger amount in the green area, on the left, than in the blue area (see colours in slide above). So that referral piece is a steady stream of those opportunities for the blue team to go in and upscale utilising their skill sets and understanding of those more complex solutions,” he said.
Stevenson believes this last part is a key area to consider.
“In sales, we have tried to open the whole spectrum up and that has given them some advantages in some ways, but it’s met with some other disadvantages,” Stevenson said. “And that fundamentally comes across how much of your own inventory, how much of your own owned and operated news properties you are able to monetise. This is the area that will drive you the highest margin. And we have fixated, as you can see from the way that we’ve approached our sales structure, actually it’s the same way that we’ve propositioned the opportunity around our audience.”
“We showcase that by looking at the number of adults in the market that our news reaches, whether that’s in paper or online, we still have really significant penetration,” he said. “And we run house ads across our portfolio to really push that message that we still have a high propensity of penetration with adults in the market that reach those that are highly likely going to spend in the market with a perfect audience to push messages for local businesses. And so we really want to focus on building these solutions around this in the first instance.
“It drives us the highest margin and it gives us an opportunity to get a brand, a local brand on a trusted environment to drive the results that they’re looking for,” he said. “It’s really about how we can build on this. And I think many of us in the local space have been wrestling with sort of dumb bundling and packaging, a bit of print, a bit of online.”
Smart bundling
Stevenson noted that one of the things they’ve been working on “is being smarter around the recipes in which you use these individual ingredients. And one of the areas that we’ve really focused on is how we can use Facebook as an extension of our display. It’s very similar in it’s targeting the types of audience segmentation that you’re after.”
“It’s an extension of moving a brand in front of another audience,” he noted. “And what we found is we can actually be more aligned with our display by purchasing the Facebook advertising through our local news sites, Facebook accounts, rather than solely buying it through the local advertisers Facebook account that has a number of extra challenges. You have to get access to their account.”
“What we found is we can provide this very holistic single solution that utilises these ingredients,” he added. “And by blending them together, you can deliver two very key metrics that are looked on from a display awareness perspective. One is the view time, which is how much the ads are visible to the readers as they read.”
“On a news site, it’s a much more enjoyable, longer digestion to read our content versus on Facebook, which is a much quicker hit. But on Facebook, they have pretty significant targeting capabilities. And so on Facebook, what we’re able to do is drive greater learning through the click insight as a way of understanding the engagement,” he said.
Some of the key questions they aim to answer are:
- Is the messaging reaching the right people?
- Are they engaging with it?
- Can we take that learning back into that more time-based awareness environment by your new sites?
“By utilising that combination,” he said, “we have looked to develop a series of flavours within those ingredients. So on the left hand side (see slide above), we have three flavours of display, and they differ based on the level of sophistication of targeting, as well as when you get to the bespoke level, we have an actual human expert who optimises campaigns all day long so they can move those campaigns as they see the different results come in and how they can optimise them. And we’ve replicated them again, utilising Facebook.”
“Once you have these ingredients,” Stevenson continued, “we’ve been playing with different recipes to create different packages and values for customers based on the time that they want to commit. So if they only want a high impact 28 day campaign, we have solutions that offer that. And if you want something a bit longer every 90 days, and then what we really wanted to focus on is to drive such good value that we would enable them to stick with us every month for the entire year.”
“These solutions are referred to as ‘always on’ solutions because their value is so good, the customer can’t really afford to turn them off because the response that we’re delivering is so valuable to them. And that just gives you a flavour of the kind of different mixes of utilising different flavours of display, whether it’s got very little targeting and it’s designed to reach a broader audience, or it’s got far greater optimised opportunity to really drive into certain key audience segments, and the same again across Facebook. And our goal is to keep that margin as high as possible across those, the blending of those packages.”
“One of our challenges when we’re selling Google or Facebook on its own is how challenging that is to keep a margin sustainable, given that you have to fund the staff to execute and to sell it. So it’s much more of a base foundation opportunity doing it this way to drive that sustainability as well as offer the full suite of solutions. And what’s been quite key is how do we then understand that value.”
Stevenson highlighted three recipes:
- the 28 day awareness,
- the 90 days awareness,
- the awareness subscription.
“The diagram above shows you the cost per click as a measure of value and how that differs over the spend levels. We actually have seven options to spend per month for awareness subscription. This gives you a flavour. This is how we are tracking that we’re creating as much the best value for those that are committing the longest,” Stevenson said.
”It is a much easier proposition to take to market than worrying about which of these individual ingredients you want,” he added. “We have master chefs, solution engineers, that are building these for customers once they find which ones they enjoy. Then we can move them and upscale their spending with us. And each time we’re delivering an improvement in their response.”
In order to get that across to customers, one of the things that Newsquest had to build and develop was a response platform that could bring the data from multiple sources, such as things from Google Ad Manager, from Facebook Ad Manager, from their off network supply side platforms, Stevenson said.
“This campaign centre solution was designed to make it far easier to give a holistic view of how that smart package delivers all of that media and presents it to the customer in a really succinct way,” he said.
”One of the exciting features this offers that we’ll be releasing in the next few months is we start to have automated reports pushed out to customers that currently go into our sales teams,” he added. “And as they become accustomed to the rewards that have been presented, we want to make that more efficient and slicker for them by pushing this information out to customers directly to keep that regular contact and make them aware of the fantastic value that we’re delivering. That’s been very much how we’ve approached utilising our inventory to be smarter at extending that with other solutions like Facebook in particular, to try and bridge this opportunity to drive our customer base to a more holistic full agency sale.”
Summary and key takeaway points
In closing, Stevenson offered these key takeaway points:
- The strategy aligns with long-term goals of a developing sustainable business model.
- Do evolve your sales structure “carefully.”
- Extend your solution offering built around your owned and operated.
- Look to build ‘SMART” packages blending the best of solutions.
- Build INCREDIBLE value to drive Long-term commitment.
- Make it easy to share and advise on results for packaged solutions.
- Video/Animation production is a powerful way to enhance response.
”Overall, the results have been that we’re growing the percentage of advertising revenues now beyond 50 percent,” he said. “We’ve seen some fantastic rewards in the accolades of how our technology for our DMS business has performed. And we see how our sales team now becomes more and more efficient at referring those customers as they develop their spend, and have the customers step into that broader digital marketing service spend level, an easier transition. And through it all, it’s demonstrating the value of what we deliver, whether it’s your own inventory, or you’re smart- packaging it with others, fundamentally getting across the value that we drive is key to that success.”
Useful links and contact information
The webinar presentation can be downloaded here.
- Link to Newsquest
- Link to LocalIQ UK
If you have questions or examples of similar cases, please contact the WAN-IFRA Innovate Local team:
Cecilia Campbell: c.campbell@wan-ifra.org
Niklas Jonason: n.jonason@wan-ifra.org
The post How Newsquest is diversifying into being a local digital marketing agency appeared first on WAN-IFRA.