E-business Briefing: September 2006

Simon Waldman, formerly head of digital for Guardian Unlimited, is about to start two new roles as The Guardian Media Group’s (GMG) director of digital strategy and chairman of the UK’s Association of Online Publishers (AOP).

What are the main issues you expect to deal with in your new role at GMG?
I haven’t actually started yet.  I’m sitting in an office full of boxes, and just getting ready to leap across. But there’s a desire to have someone at the heart of GMG who has an understanding of digital.

There’s a mix of structural changes happening, both creatively and commercially, to all the areas we operate in. It’s a matter of how we decide to deal with those – whether it’s the regionals, Trader Media or radio, all of them have individual issues and concerns that I’m there to help work on. 

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You’ve adopted a wide range of Web 2.0 tools on Guardian Unlimited. What have you learnt about the business case for those features?
It’s quite difficult to rate any one of those things, and their current value. There’s an overall message that as an organisation we are committed to innovation and development and we are relatively rapid at turning things around.

Our core economic value is in generating advertising revenue, but there is so much happening structurally around the way that content is created and put together at the moment that you need to introduce these elements at the first opportunity on to your site so you can learn how they might be of value.

It also depends what you’re talking about. RSS doesn’t impact us economically, either way. Blogging has also been a fantastic way to grow traffic and build communities. What’s important is their combined power, so that people know we are the smartest newspaper on the web. That’s what we win awards for and that’s how people see us.

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What was your reaction then to The Telegraph’s deal with ITN?
It’s interesting, and we have video plans of our own. It’s a deal with a video supplier, and that’s fine.

You can always look at something that one person is doing on one given day and think it’s fantastic, but what matters is the delivery of sustained quantity and quality of content over a period of time, and the other newspapers are a long way behind us on that.

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Will you be doing video in-house?
Yeah, we can do that. We have an operation called Guardian Films which works with Newsnight and others, so we are working with them.

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How do you intend to deal with increasing competition with broadcasters like Sky and the BBC - has the time for partnerships been and gone?
The BBC remains a constant… well, I don’t know whether to call it a threat or a challenge. It affects the way you operate and many of the commercial decisions you might want to take.

But really you are seeing clusters of brands, which in the past might have been differentiated each other through distribution, now being very close to each other, and the relationship’s slightly more fractious and tricky. Where there was previously wide acres of space between you and opportunities for partnership, it’s a little more tetchy.

But I think if you’re The Times or The Telegraph, I think all you want to do is to be better than The Guardian online, and they take the opportunities to say they want to be bigger than us and better than us. But we have to look beyond that – we’re the market leader and need to understand the broad way information is used across the internet and how we fit into that.

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Are the other newspapers happy about you representing them at the AOP ?
Well they had their chance to vote me down! The point is that we are all rivals, but at the same time we all know we are building a great new project – the digital publishing industry.

If you step back from our fraternal squabbles, the AOP is about letting people from a broad range of media organisations work out what they have in common and what they can do to help each other, rather than in our day to day jobs when we are working out what we can do to beat each other up.

One of the reasons I was willing to take on the chair was because it’s a really important organisation. Personally, I got a lot out of it as a member. What’s going on in this industry is starting to redefine media – as a collection of companies, we invest in creativity in the UK. We are plotting the future of creative enterprise in the UK. The health of our industry is more important than our individual P&Ls.

I think it’s an exceptionally positive organisation, with a fantastically committed board. There’s a real breadth and depth of talent – my main worry is I’m going to mess it all up.

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In June, you announced The Guardian was going to start breaking news online before the stories appear in the newspaper. Why was that such a big deal?
Part of it is we have always been covering stories happening during the day right from the start on Guardian Unlimited, and now what we are doing is bringing the quality from the paper across to that. There’s quite a lot of creative and organisational learning needed to make that happen.

If you are a user coming to our site, there is a larger volume of business stories during the day and that’s good news. We have challenges in terms of getting the blend of story right. It’s very close to radio news – you are part of the story as it rolls on, whereas in the newspaper the stories are finished articles. I think the point was we were the first to do it on this scale and it was a very important event.

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How are things going with Comment is free ?
Comment is free is important on two levels. One, it is the most innovative attempt so far to combine newspaper-grade comment with blogging-style exchange of opinions and it’s been very high profile – newspapers all over the world talk about it.

Revenue-wise, the yields are fine and the traffic is OK, but I think it is much more sophisticated than talking about whether it is breaking even. Guardian Unlimited as a whole is now quite healthily profitable, so to keep that you have to sustain a good level of R&D. What we’ve got going with Comment is free is we are learning the ways of working right – legally, creatively and technically.

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Do you intend to move away from interruptive advertising in the near future?
Well I think there are probably fewer pop-ups on the site than there were previously, simply because advertisers have found they don’t work. But at the same time, we provide a fantastic free service and we need to bring in advertising revenue to support it.

We’re cautious – we’re not the most aggressive in terms of the formats we offer, and if anyone complains we always offer the £20 service where they can view the site without any advertising at all. In any medium, the balance between commercial and editorial is always a tricky thing to get right and I think we do a pretty good job – both for revenue generation and growing our audience.

Simon talked to Richard Maven ( richard@e-consultancy.com ).

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