Executive Team of the Year 2008: The Economist

John Micklethwait, editor of The Economist and an avowed fan of The Simpsons, was delighted when Homer gave the highbrow news and opinion magazine props in one episode. “I thought it was great,” he effused during a recent interview at the title’s U.S. base in New York.

With its authoritative coverage of global business, financial and political news, the U.K.-based Economist has long been required reading for the elite. In recent years, some might have been surprised to see the weekly turn up in rather unexpected places–from The Simpsons to the Chris Rock comedy I Think I Love My Wife. To Micklethwait, those shout-outs signal that the magazine has finally transcended its erudite image and become solidly a part of the popular culture.

American culture’s loving embrace of The Economist coincides with its stunning business successes here in recent years. Racking up impressive ad and circulation numbers, the news and opinion title has blown past other newsweeklies and business magazines, many struggling to redefine their mission in the digital age. In recognition of the title’s remarkable performance, publisher Paul Rossi and editor Micklethwait are AdweekMedia’s Executive Team of the Year. The magazine also earned the top spot on this year’s Magazine Hot List.

The London-based Economist began publishing in 1843, but its becoming a force in the U.S. is a relatively recent development, the result of geopolitical events and the publisher’s own strategic moves. Before the ’80s, the brand had no U.S. ad sales presence. Then came 9/11.
Three years later, parent The Economist Newspaper Ltd. identified the U.S., along with India and Asia, as growth markets for new readers and advertisers. In January 2005, the company tapped Rossi, a longtime Economist ad salesman who at the time served as publisher of its Web site, to be publisher of the North American print edition and its extensions. Last December, Rossi added the title of executive vp of The Economist Group North America.

While certainly well-respected, The Economist suffered under the perception that it was difficult to read and was a pure business magazine. To change that, it launched marketing blitzes in major markets including Boston, Baltimore and Denver. Readers and advertisers responded in a big way. Today, North America accounts for more than half of the magazine’s worldwide circ. In second-half 2007, circ soared 12.8 percent to 720,882 year over year and 43 percent over three years, per Audit Bureau of Circulations–this, despite its premium cover price. (At $5.99 per copy, The Economist charges about $1 more than the leading business and news titles, and its average net annual subscription price is a hefty $98.)

Ad pages last year grew 8.5 percent to 2,364 year over year, while ad revenue soared 24 percent, per Publishers Information Bureau, with strong gains in tech and financial services/insurance. Over the past three years, the title churned out ad page and revenue gains of 7.6 percent and 61 percent, respectively.

“It’s the true global viewpoint in the marketplace versus Time and Newsweek and U.S. News & World Report, which tend to have a very U.S.-centric view,” says Kelly Foster, print director and senior partner at agency Mindshare USA. “It really is a thought leader, and certainly the audience and demographics play out.”

Mike McHale, chief media officer of agency Cleverworks, says the title’s “plain Jane” image is part of its appeal. “It’s sort of The Atlantic meets The New Yorker for business,” he says. “It’s a world perspective that is a little less nice to the U.S.”

Micklethwait says The Economist has benefited from a hunger for a smart, provocative take on world events. At the same time, he says, globalization and terrorism have made people stateside more aware of the impact of events abroad. “If you’ve living in Milwaukee, your life is now much more affected by what’s happening overseas,” he says. “You could lose your job to somebody in India. You could compete against a company in China you’ve never heard of. And there are all sorts of economic ramifications of things that happen miles away. But then, on top of that, you’ve got all the political things. People have suddenly seen how their world can get turned upside down by a lunatic in a cave in Afghanistan.”

Towering, soft-spoken and charming, Micklethwait isn’t what one might expect of the editor of a “hot” magazine. Based in The Economist’s London headquarters, Micklethwait, who rose to editor in 2006, is relatively unknown in U.S. media circles. While many of the magazine industry’s star editors have become household names and faces, he prefers doing radio interviews to TV (they’re quicker). In keeping with The Economist’s tradition, his name doesn’t even appear in the magazine.

The Economist is known for attracting management and staff from other disciplines–and keeping them. Micklethwait certainly fits that mold. He’s been at the magazine since 1987, when he started as a finance correspondent following a brief stint as a banker at Chase. Over the years, his roles have included opening the L.A. bureau, running the New York bureau and editing the U.S. section. During his two decades here, the British-born Micklethwait has established himself as an astute observer of America. With collaborator Adrian Wooldridge, also of The Economist, he’s authored four books, including The Right Nation: Conservative Power in America.

Despite his expertise and his influence on the title, readers won’t necessarily see the editor’s imprint on every page. While he’s definitely made his mark–introducing an international section, planning a column on Asia–The Economist’s sober consistency is its trademark. It publishes a single global edition as if to say, here’s what’s important, regardless of where you live. (So, don’t look here for weekly Lindsay Lohan updates. Micklethwait says while he has nothing against coverage of pop culture–he’s a fan of The Simpsons, after all–the world doesn’t need any more of it. Surveying Time’s March 3 George Clooney cover, he sniffs, “We’re just not going to do that.”)

The magazine’s reporters, who refer to The Economist as “the paper,” are published without bylines, underscoring the idea that the publication speaks with a single editorial voice. Its ownership is also unique; it is jointly owned by Financial Times publisher Pearson and a shareholder group including Economist staffers, while a board of trustees protects the editor’s independence. Micklethwait says the arrangement safeguards his ability to stake out strong editorial positions, while the no-bylines practice, once common among news publications, differentiates The Economist. “There’s a genuine collaborative element to The Economist, which makes bylines sort of difficult,” says Micklethwait. “It works into the way we think. It’s a very communal paper.”

Chris Anderson, editor of Condé Nast’s Wired and a former Economist editor, says the magazine has tailored a unique perspective by encouraging writers and editors to think for themselves. The Economist is a “true intellectual meritocracy,” he says, where staffers crowd in the editor’s office for the Monday edit meeting and vigorously debate the opinion pieces, or Leaders. “People will rip you to shreds–and you will rip back,” he says.

While homegrown U.S. newsweeklies cling to the concept of impartiality, The Economist is an unabashed advocate for economic liberalism, leading it to take positions in support of issues ranging from free markets to gay marriage. As for the Iraq War, The Economist supported the U.S. invasion but criticized Bush’s handling of it. “We’re liberal in the way liberalism is meant to be,” explains Micklethwait. “We are liberal on social issues but also liberal on economic issues.”

Readers and media peers alike love The Economist’s smart, global perspective. One Facebook fan group attracted 14,000 members, while a surprisingly large number of people have posted shots of themselves (or their babies) reading The Economist on the site Flickr. In 2006, the American Society of Magazine Editors made The Economist eligible for the National Magazine Awards, or Ellies–another sign it had finally hit the radar of the U.S. magazine business.

Membership is normally limited to magazines produced here, but ASME made an exception for The Economist because of its large U.S. circulation. In its first year, it was nominated for the coveted General Excellence Ellie; this year, it got two noms, for General Excellence and Interactive Feature. (Winners will be announced May 1.)

Rivals seem to have taken note. Some noticed elements of The Economist in recent redesigns of Time Inc.’s Time and the Washington Post Co.’s Newsweek. “They’re more texty, the pictures are smaller, they’re trying to be wittier,” magazine designer Roger Black says of the retooled American players. “I’m sure The Economist has had some impact.”

Critics charge that, popular appeal and influence aside, people don’t actually read The Economist. The magazine counters with MRI data claiming readers spend an average of 57 minutes a week with the magazine. Its upscale following is a marketer’s dream. Readers have a median age of 39.4 and household income tops $102,000, per MRI, making them younger and richer than buyers of leading newsweeklies and business pubs.

Rossi, the affable, witty other half of The Economist dream team, has capitalized on those demos with multiplatform programs. One example is Energyville, an interactive online game that lets players power their own cities. Designed to promote Chevron’s role in encouraging the energy debate, the site has drawn a sizeable 347,000 visitors, according to the magazine.

For an Intel campaign, The Economist created a series of Oxford-style online debates centering on education and technology. Joe Warren, senior vp, group planning director at agency Universal McCann, which orchestrated the Intel buy, says the long, thoughtful responses submitted by opinion leaders speak to their deep relationship with the publication. “It’s a testimony to The Economist that they get those engaged people.”

Keeping up with demand for more brand extensions is also a focus. The rise of the Internet has thrown into question the place of the newsweekly. After his initial anguish about the Web, Micklethwait determined that the medium suits The Economist. “Just the sheer amount of data out there means that people do want a sort of filter,” he says.

The Economist has continued to adapt as media habits have changed. In June 2007, it dropped its paid subscription model for Economist.com and started offering all content of less than one year old for free. Nielsen Online figures show traffic relatively unchanged, at 675,000 uniques as of this past January. (The magazine says its internal count is much higher, at 2.9 million uniques in January, up 30 percent year over year.) More recently, the site added video, as well as an audio version of the magazine. The site is set to relaunch in two stages this year, promising more video, better navigation and more visual appeal.

Micklethwait admits that figuring out how to best translate the magazine to digital form has been tricky. The Economist is known for its innovative use of data; its Big Mac Index charts the price of a hamburger in different countries. Micklethwait has found that Economist.com is a good home base for rankings and offbeat data. (A chart breaking down the price of cocaine around the world was a big hit.) But he continues to grapple with how to do video in an intelligent way, admitting, “I’m not a huge fan of looking at journalists talking.” That said, The Economist is looking to expand into television. Last year, the magazine sought to turn its annual forecast, the World In…, into a TV program, but it never got off the ground. Rossi says a couple of television projects are in the works but stopped short of offering details.

Rossi is also exploring opportunities for growth across other assets, including the Intelligence Unit, providing country- and industry-specific information. When he added the role of executive vp this past December, Rossi gained responsibility for the company’s CFO magazine and its spinoffs, allowing him to present marketers a wider array of products.

All those initiatives will be critical at a time when print dollars are getting scarcer. Rossi allows that 2008 won’t be the barnburner last year was; he’s projecting ad pages to be up 5 percent to 8 percent this year and revenue 8 percent to 10 percent, with growth categories including auto, financial services and liquor.

Despite its remarkable circ growth, The Economist remains small versus other news and business/financial books. But Rossi has ambitious goals, aiming to break the 1 million mark in less than five years through marketing blitzes, Internet subscription sales and new retail outlets. The title also has lowered its net subscription price to hook new readers with short-term offers.

As he mines new ad business, Rossi faces obstacles. While luxury advertisers covet The Economist’s well-heeled demos, they “tend to shy away from the dullness of the book,” McHale says.

The magazine also gives priority for some premium positions to its global ad clients (which account for some 35 percent of overall ad business), a practice that irks at least one buyer. Mindshare’s Foster says one luxury client wouldn’t go into The Economist because the title couldn’t guarantee a position in the North American edition. “Luxury is hard in those types of titles because you never know what you’re going to be adjacent to,” she says. Some have said, in an age of print journalist as talking head, they would like to see The Economist get its writers more exposed.

Rossi says he’s working to change the magazine’s image with luxury marketers by demonstrating readers’ consumption patterns and openness to trying new products. At the same time, he concedes that for some advertisers, “We’re not going to be a natural fit.” For those beyond reach, The Economist may bring its European lifestyle title Intelligent Life to these shores sometime over the next year and a half, the publisher says.

As for taking greater advantage of The Economist’s human capital, he sounds a predictably cautious tone: “We have to manage that church-state quite actively. It’s why our readers pick us up and keep renewing–it’s because they want an independent voice.”

Lucia Moses is a senior editor covering print media at Mediaweek.