As the FT prepares to launch a single global edition, its deputy chief executive and global commercial chief tells Arif Durrani why the newspaper is as relevant as ever.
In his fifth-floor corner office overlooking the Thames, a photo of Ben Hughes with a smiling Sir Martin Sorrell sets the scene for an interview with one of the best-connected newspaper men in the business.
Hughes has been with the Financial Times for 30 years and is the charming embodiment of the brand. As the FT’s deputy chief executive and global commercial director, he has played a key role in formulating its new structure ahead of the move to a single global edition planned for the first half of 2014.
From a commercial perspective, this has meant slimming down the FT’s regional advertising teams and shifting the focus to global sales. It is less dramatic than it sounds, according to Hughes, who says most of the brand’s 200 or so core advertisers are global and collectively generate about 70 per cent of total revenues. Staff are said to "understand why we’re shaping ourselves in this way".
Rather than having regional heads, the teams will be organised around six disciplines: B2C, B2B, trading, career management, education and emerging markets. All report to Dominic Good, who has been promoted to global sales director.
The restructure has not been without pain, with the loss of around 20 roles – some 15 per cent of its 140-strong global sales force. Hughes says it’s "never nice having to get rid of people", but calls it "a reality of the business world in which we live".
"I always say, whatever we do with this wonderful brand, we must always do with decency, class and style," he says. "Whether that’s holding a corporate event, hosting a dinner in Mosimann’s or telling someone their role has been made redundant."
The jury's out on the global edition
Not everyone’s convinced by the global edition. Lorna Tilbian, the executive director at Numis Securities, says: "This one global edition might work for advertisers, but does it really work for readers? Don’t give me pages of information on Asia or the Middle East, I want to know specifically about what’s happening in the UK. Most people are still specialists, not generalists."
The FT’s editor, Lionel Barber, has tried to allay such fears and softened news of the move in October with the caveat that it will "retain flexibility for a tailored UK edition with UK news pages" for specific events.
The new year will also bring a new staff training programme, the Global Commercial Academy, designed to develop skillsets required for a modern multimedia company. Run by a mix of internal and external experts, Hughes is helping to bring the initiative to fruition.
Few people know Hughes began life as a teacher at the Paris-Sorbonne University. He says he soon realised his love of people and group challenges made him better-suited to sales. A fluent French speaker, he began at the FT as a sales and marketing manager in France, tasked with raising awareness of what was then a largely unknown brand.
"One of the things about being in Paris and working for the FT in those days is that it wasn’t very well-known," he recalls. "We used to have the slogan ‘No FT, no comment’ and French people would look at it and say ‘No foot, no comment’ – they clearly didn’t get it at all."
Before long, Hughes began to notice Parisians walking around with the FT under their arm as a status symbol. Three decades on, does the brand resonate today? "Big time," he says, believing it has firmly seen off competition from the International Herald Tribune (now the International New York Times) thanks to its outstanding, quality content.
Subscription highs, but print ads retreat
Now in its 125th year, the FT reported its highest circulation in its history in October of nearly 630,000, with most subscribers now digital (387,000). Its affluent business readers have been happy to swap the newspaper for its digital offering and the brand is rightly credited for being a trailblazer with its metered paywall and HTML5 app. However, in terms of turnover, the brand is likely to be a smaller business than it once was.
'I always say, whatever we do with this brand, we must always do with decency, class and style'
Print copy sales have tumbled 45 per cent over the past ten years and Hughes reveals that print ads will be down roughly 6 per cent in 2013. Nielsen, which provides revenue estimates based on agency information, pegs the FT's ad revenues at around £70 million this year. This is significantly down from the pre-recession years, when Nielsen estimates tracked well in excess of £100 million. Digital ads provide some relief, up around 15 per cent this year, but the vast majority (90 per cent) are from brands that advertise with the FT in print and then extend into digital.
Ad chief Hughes is more reluctant than others at the company to downplay the role of the newspaper. He says print remains a "hugely important piece of our heritage and offering" and believes it will remain so in ten years’ time.
His views are supported by the Christmas issue of the FT’s glossy offshoot, How To Spend It – one of 30 this year. Packed with advertisers including Rolex, Christian Dior, Louis Vuitton, Chanel and Tiffany & Co, it represents more than £1 million of adspend. It would take a lot of banner and buttons ads to replicate such revenues.
He is also keen to stress that the newspaper’s circulation sales "have also become profitable for the first time" this year. It’s a curious claim, with the FT’s print circulation among the worst UK performers, down 17 per cent year-on-year in October, to 242,873.
If copy sales alone have become profitable it must be attributed more than anything to the removal of bulk copies, production efficiencies and the two cover prices rises in 2011/2012. The weekday issues now costs £2.50 and the Saturday issue £3.
Remarking on how quickly the years go by, he recollects the launch of How to Spend It, which started with one issue 20 years ago after a moment of clarity from one of the sales team.
"It grew out of a section of the newspaper," he says. "I remember the wonderful lady who was working on those pages selling to fashion clients, watch clients and other luxury clients, saying 'this advertising is far better suited to a glossy magazine, why don't we launch one?'. I remember looking at that first edition and thinking, ‘this is going to fly’."
Far from representing a dying medium, How To Spend It continues to grow, with print said to be "stable" and its online presence up 40 per cent year on year. Its ability to tap into high wealth individuals for luxury brands, more resilient to the economic downturns than most other sectors, has been another welcome boom for the FT.
But the real future growth potential for the company must lie in following its readers, and they are migrating away from print. Developing the FT’s digital portfolio is a key challenge going forward, with Hughes conceding its mobile advertising – up 23 per cent in the nine months to September – is still "not good enough from an ad engagement point of view".
The commercial leader is certainly not the first to make such an observation, but the landscape is changing fast and with it will come seismic shifts in consumer expectations. It’s something that’s not lost on Hughes.
"I am more enthusiastic now than I ever have been about the world of media," he says. "It is the most galvanising place to work in. I think it’s a challenging place. I think you have to make bold decisions. I think the FT has been good at making bold decisions.
"But whilst we must go helter skelter towards the future, making clever and smart decisions, I also think it is important to remember that print is a big part of our history."
Time is up, and Hughes is dashing off for a social lunch with the Olympic rower and gold medalist, Katherine Grainger. It could just as easily have been Andrew Strauss, Austin Healey or Will Greenwood. Sports lover Hughes knows them all, and the enduring power of the FT ensures they all still want to know him.
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