Increase in print and online revenues
The Group had a record year, marked by circulation and revenue growth, prize-winning content, online development and the acquisition of EuroFinance Conferences and GalleryWatch. This success is a product of our strategy to develop our high-end brands across the world, and to invest for the long-term through the cycle. In the context of changing advertising markets and an evolving digital world it is notable that the Group's print advertising revenue was 12% up year on year.
The Economist and its associated businesses, including Economist.com, The World In... and Intelligent Life, have had another outstanding year. Combined advertising revenues are up across the business by 20%. The Economist's worldwide circulation of 1,197,712 was up 9% for the July-December 2006 ABC audit period. In North America, average circulation increased by 12% to 639,206. UK circulation grew by 8% to 170,038 and in Asia-Pacific average issue sales for the July-December audit period were 121,601, a 4% increase. In Britain The Economist was named Medium of the Year by Campaign magazine, beating Google into second place.
In addition to international advertising markets, The Economist competes for domestic print advertising in the UK and the United States. Since large, English-speaking markets are important to the business, The Economist also launched a South Asia (India and its neighbours) advertising edition, to tap the market for advertisers targeting India's fast-growing elite. The strategy of having a stake in multiple advertising markets is powerful: print advertising revenues at The Economist were up 18%. During the year, Economist.com was re-designed to provide more daily content, including columns, blogs, a daily chart and a weekly Correspondent's Diary. A particular success was the weekly podcast: by the end of the year nearly 600,000 people were downloading audio content from the website each month. Economist.com also received two honours in the Webby awards, for its economics blog, Free Exchange, and for the quality of the writing on the site.
Chief executive Helen Alexander says, "it's clear from our results and our research that the role of our print products remains undiminished in the lives of our readers. And on the internet we are also experiencing dramatic rates of growth. Our electronic advertising revenue increased by 39% last year. Electronic revenues across the Group represented 17% of the total turnover. Our consumer and our business information businesses are both growing."
Celebrating its 60th year, the Economist Intelligence Unit is growing, in particular from new initiatives such as industry coverage and bespoke services for customers. During the year the Economist Intelligence Unit increased the number of countries it assessed for operating risk and credit risk and it now issues forecasts on 82 economies as well covering more than 200 countries. The business is well positioned to take advantage of increasing interest in emerging markets, particularly India and China, and will be launching new products and services over the coming year.
The CFO brand family saw growth too, with total revenues up by 22%. Much of this has been due to the successful integration of the acquisition, EuroFinance, a respected name in cash and treasury-management events. CFO magazine plans to extend its geographic reach with the launch of an Indian print advertising edition, and there are plans to develop CFO.com further.
The Group's brands targeted at senior decision-makers in government consist of Roll Call, European Voice and GalleryWatch, a leading provider of real-time online legislative information and management services. Collectively revenues were up 11% over the prior year.
Roll Call extended the range of services it can provide to readers and clients by acquiring GalleryWatch. The Group's government brands are an important constituent part of its strategy to reach the high-end audience through quality content. These brands are leading players in markets which are showing rapid growth, and the Group will continue to invest to yield greater profits from this strong position.
Besides electronic media, the Group sees attractive opportunities in Asia. Business is growing in China. Investment in India is under way. The Group aims to increase circulation and advertising for The Economist, and to establish the CFO and the Economist Intelligence Unit franchises.
(March 31st 2007)