FINANCIAL MEDIA: Worth the paper it’s printed on

The welfare state’s gloomy future has boosted interest in personal finance. Robert Gray looks at the sector’s media

The welfare state’s gloomy future has boosted interest in personal

finance. Robert Gray looks at the sector’s media

The impending collapse of the welfare state is a popular, if depressing,

subject of debate at the moment. The media is full of doom-laden

predictions that the state will provide scant protection for our


The government, whatever its political complexion, simply will not have

enough money to look after an ageing population. The message is clear:

make your own arrangements.

‘Anyone who says ‘I’ll leave it to my employer and the state to look

after me in old age’ is stupid’, says Ian Cowie, editor of the Money-Go-

Round section in The Daily Telegraph’s Saturday edition.

Not surprisingly, financial services marketing has tapped into the ever-

growing demand for pensions, savings, life assurance and investment

products. Consumers are urged to make their own financial provisions to

be assured of a comfortable retirement, a private education for their

children, first-rate healthcare and whatever other life goals they may

aspire to.

Information exchange

Many of these consumers have been looking to the media for information

and advice. Reacting to demand, personal finance coverage is growing

apace. The growth of the personal finance sections of the national

newspapers testifies to that.

‘The downfall of the welfare state and a lack of trust in financial

advisers has meant that more and more people have had to look after

their finances,’ says Andrew McQueen, publisher of monthly personal

finance magazine Moneywise.

The Daily Telegraph (together with the Daily Mail and, to a lesser

extent, The Times) has led the way in personal finance coverage among

the nationals, drawing on middle-class, middle-England readers who take

a strong interest in what to do with their money.

For financial marketers, targeting prospects such as these are

essential. That is why in the run-up to the end of the tax year, The

Daily Telegraph is understood to attract more than pounds 1m a month in

personal finance advertising revenue.

However, almost all the nationals have boosted their personal finance

coverage as a service to readers and as a means of generating extra ad


The great challenge for newspapers is to relate to a readership that,

for the first time, sees personal finance as vital to their future, says

Will Ricketts, financial sales manager of The Observer and The Guardian,

who is also publisher of the Guardian Media Group’s monthly personal

finance title Money Observer.

The nationals, then, have to balance their coverage to serve readers who

are turning to the pages for the first time with those who already have

more than a passing knowledge of the personal finance minefield.

Although newspaper coverage has grown substantially, the nationals are

still unable to devote as much space to personal finance as the

specialist consumer titles. Moneywise, supported by extensive promotions

and tie-ins with its owner Reader’s Digest, has by far the biggest

circulation at approximately 130,000.

Less City-centred

The other key titles in the marketplace are What Investment (and, some

may argue, its less-established sister title Personal Finance), Money

Observer and the FT-owned Investors Chronicle.

The latter has a cross-over readership that takes in the City

institutions as well as private investors. The others are targeted

squarely at consumers, a minority of whom may be described as investment


The demand for information suggests that personal finance publishing is

a healthy market. But this didn’t hold true for Centaur Communications’

Inside Money, launched at the beginning of last year only to be closed

six months later. What went wrong?

Although the product was relatively popular with advertisers, Centaur

appears to have over-estimated the short-term consumer interest. Faced

with falling sales, the publisher chose to cut its losses rather than

hanging on in the hope of reversing the decline.

‘Perhaps they should have stuck with it for a bit longer,’ says Mike

Richards, director of specialist financial media buyer Capital City

Media. Moneywise publisher McQueen agrees: ‘I suspect they closed Inside

Money a little early.’

At one stage, BBC Magazines was giving serious thought to entering the

market but has put its plans on ice. The Consumers Association similarly

investigated a launch but changed its mind when a membership survey

showed that the majority of respondents felt there was already enough

coverage given to finance in Which? A dedicated title was therefore

deemed unnecessary.

The consumer personal finance magazine market is characterised by a

dearth of news-stand sales. Most copies are sold through subscription.

It is also a market where circulation does not always have a direct

bearing on the advertising rates. Moneywise trounces all-comers with its

subscription sales but for advertisers the most important yardstick is

quality of response.

Conversion rates

‘The numbers of magazines you sell is almost irrelevant,’ says What

Investment publisher Geoff Gamble. ‘A magazine is sustainable in this

market on 10,000 units as long as the conversion rate and number of

responses is good.’

McQueen adds: ‘If you come in the top five in terms of cost per response

or conversion, advertisers will come back and use you again and again.’

Edinburgh Fund Managers is a frequent advertiser both in personal

finance pages of the nationals and in the dedicated consumer press. Its

marketing manager Deborah Findlay actively analyses the response rate

from each. She says: ‘It is difficult sometimes to know whether you’re

getting the same people as all the others, those who trawl round the

companies. The perennial coupon-cutters.’

This is a problem faced by all marketers in this sector.

The issue for all financial advertisers is one of advertising stand-

out’, says David Fletcher, director of media buyer CIA Medianetwork,

whose clients include TSB. ‘You have to work very hard to differentiate

in that market. Not only because there are so many advertisers but

because of the small print you have to put in the ads under the current


‘Because it is so data-rich, the financial services market is one of

those areas where electronic media should score. Web addresses could

retail information for people. The new media has been under-utilised so


Time will tell what effect the digital revolution has on personal

finance marketing.

In an effort to stand out from the pack, some personal finance marketers

have also turned to direct response TV. Virgin’s TV advertising for its

PEP is probably the most notable example of this so far.

However, it should be said that, because of its particular brand

strength and values, Virgin has campaign execution options that would

not be nearly as effective if used by most of the other players in the


At the end of 1995, a Datamonitor report showed that national newspapers

were the most cost-effective medium for financial services advertisers,

with special interest magazines ranked second, and television third.

DRTV’s time may come but, for the moment, marketers in the sector feel

safer with newspapers and magazines - especially as the advertising

often works most effectively when it includes relatively complex

financial comparisons, such as performance tables, which potential

investors need to study at their leisure.

For unit-trust specialist M&G, the marketing strategy is to advertise

across a broad array of national newspapers and special interest

magazines to ensure it is in the forefront of consumers’ minds.

‘We need to get to a broad range of people so that when they get to the

stage where they want to make an investment decision they think of M&G,’

says marketing manager Roger Jennings.

M&G has also been experimenting with placing some of its national press

advertising within the general news sections, based on the premise that

most of the readers of the City pages will read the general news pages

as well. It hopes to make an impact on non-City page readers in this way

and is currently analysing the effectiveness of such an approach.

Limited space

Interest in personal finance issues is unlikely to subside, particularly

if the demise of the welfare state remains on the news agenda. National

newspapers may be reluctant to introduce even more finance sections

while newsprint costs stay high, in turn providing an opportunity for

consumer finance magazines to consolidate.

The absence of another launch on the horizon to threaten their share of

the market leaves the existing personal finance magazines well placed.

Charterhouse, publisher of What Investment and Personal Finance, is

often criticised for not providing audited circulation figures.

Yet this deliberate decision has not done it any easily apparent harm:

the company put its ad rates up by 20% last year, now turns over about

pounds 4m a year and is considering flotation.


Circulation of the main titles in personal finance sector


Title                Publisher        Frequency  Circ.        Circ.

                                                 Jul-Dec      Previous

                                                 95           Period

Moneywise            Reader’s Digest      M      130,081      130,239

Investors Chronicle  FT Magazines         W      56,507       59,727

Money Observer       Guardian Magazines   M      28,577       29,005

What Investment      Charterhouse         M      30,000 est   No ABC

Personal Finance     Charterhouse         M      No ABC       25,000 est

Source: The Magazine Business



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