Guardian Media Group Plc, which owns the UK's Guardian and Observer newspapers, returned to a full-year profit as a 29 per cent increase in digital revenue helped offset declining newspaper circulation.
As competitors such as the News Corporation-owned London Times have restricted access to online content through paywalls, Guardian Media has focused on what it has dubbed an open journalism advertising campaign, drawing eyes to its website by encouraging exchanges between reporters and readers.
"The Guardian's approach to digital advertising goes against the grain and it is paying off," said Daniel Knapp, IHS Screen Digest ad research director. "The Guardian is positioning itself as a global media brand."
Guardian Media's profile in the US, where it began operating in 2011, has been boosted by its coverage of Edward Snowden's intelligence leaks. A video interview with Snowden was viewed more than seven million times. The group's jump in digital revenue exceeded the decline in print revenue this year, which was limited by a 20p increase in the cover price of the Guardian.
More vibrant spending
Guardian Media chief executive officer Andrew Miller said rising US readership has exposed the group to a much more vibrant spending environment, supplementing its core UK market.
“In the US we’re seeing a much more bullish advertising sector than in the UK, where there are definitely still concerns over the outlook,” Mr Miller said. “Clients over there are embracing digital advertising at a much faster rate.”
Guardian Media reported pretax profit of £22.7 million (€26.1 million) in the year ended March 31st, recovering from a £19.8 million (€22.8 million) loss a year earlier. Digital revenue reached £55.9 million (€64.3 million).
The Guardian and Observer recorded a loss before interest and taxes of £30.9 million (€35.5 million). The papers' circulation dropped by about 10 per cent.
Guardian Media’s “digital advertising revenue grew more than twice as fast as the rest of the market,” Mr Knapp said. “This should make critics think twice.”
The company's biggest cost remains its staff, and the decline in circulation means further job cuts cannot be ruled out, Mr Miller said.