Raconteur CEO on 'rollercoaster' from failed print magazine to £2m profit

Raconteur's CEO on 'rollercoaster' years from print magazine flop to £2m profit

Raconteur CEO Will Brookes

Business publisher and content marketing specialist Raconteur has had a “rollercoaster” few years, from nearly going bust in 2016 after a failed print magazine launch to profit of £2m in 2021.

As a B2B brand, the 14-year-old Raconteur may be best known to its target audience of business decision-makers, or to readers of The Times and Sunday Times for its ad-funded special reports published in the newspapers.

It sees itself as a relatively broad B2B publisher “geared towards informing business leaders about the different fast developing topics that we think they need to know about”, rather than focus on one industry vertical as B2B media often does.

Now chief executive Will Brookes (pictured) wants the brand to begin shouting about its successes after what he described as “explosive growth” in the past five years.

Raconteur saw 48% revenue growth from £6.3m in 2020 to £9.3m in 2021 and is projecting a further growth of 24% this year to £11.5m.

Its earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 122% from £917,399 in 2020 to £2m last year. Projected growth of 8% in 2022 to £2.2m is slower due to investment which, it is hoped, will bring “big returns” from 2023.

This comes after a loss of £650,000 in 2016 – the first in the company’s history – after the launch of a free current affairs magazine, initially on a monthly basis and then quarterly, that lasted only nine months due to a lack of advertising revenue.

“I think ultimately, it was a really good editorial product, but truth be told commercially, it just fell flat on its face,” Brookes told Press Gazette.

Around £2m was owed to creditors, including journalists, as a result, but Brookes said this was cleared a few years ago.

Brookes, who joined Raconteur in 2011 and became managing director in 2016 and then chief executive last year, said it had been a “rollercoaster of a ride in the last four to six years” but that the company is now in a “really good position”.

The focus from 2017 was "very much get back to profit" and "get the company on a level footing again and then build from there", Brookes said, which included a need to reverse a hit to staff morale from the magazine era.

'We stuck to our guns'

Brookes said he believed the decision not to ditch the brand's focus on "quality business journalism" had made a big difference.

"Obviously if your business is in trouble and you're a publisher, an immediate thing you could do is go and cut your editorial costs and your design costs and do away with illustration and just use stock imagery and literally boil things down to the bare bones and hope that that makes you more sustainable, more profitable," Brookes said.

"But if we had done that, I think we would have ceased to truly be Raconteur. This company was ultimately founded on the idea that B2B publishing can do a lot better and that business journalism doesn't need to be - absolutely shouldn't be - boring, both in terms of the content that is written, the written word, but also the visual element."

Brookes added that although it may have had a "bigger bounce-back effect" short term to halve editorial and design costs, and got the company back into profit faster, he believes "we would have been hurting our long-term prospects".

"I think probably one of the most important things we did was just stick to our guns on that front and make sure the quality of our output wasn't hampered despite the financial difficulty that the company was in," he said.

Since 2017 Raconteur has been majority-owned by four angel investors who come from a variety of industry backgrounds and play non-executive director roles. Brookes and a few other internal figures also hold smaller equity stakes.

"I'm lucky that we've got investors that have allowed me and the leadership team to do that, and have trusted us to make the decisions that we feel have been important to take those next steps of growth and get back to really, really healthy levels of profit," he said.

Even during the Covid-19 pandemic, although many brands initially froze marketing spend, there was a “massive bounce back” in the second half of the year and 2020 became the company’s best year for revenue and profits to date at that time.

As soon as profits returned, and continued to grow year-on-year, these were reinvested back into the launch of new products including: digital insight reports featuring some sponsored content and animated infographics, virtual roundtable events and other small networking events, and content hubs for brands as part of long-term campaign packages. The virtual roundtables launched at the start of 2021 and made nearly £1m in their first year, according to Brookes.

Next up, the publisher is considering breaking into audio and research revenues in early 2023.

"We do a lot more stuff now than we used to four or five years ago and I've had a huge emphasis on, I suppose, catching up when it comes to digital publishing because we were admittedly pretty far behind the curve four or five years ago," Brookes said.

Raconteur's biggest revenue driver remains its relationship with News UK for its Times and Sunday Times special reports.

The company has gone from being almost 100% reliant on print revenue in 2017 to a 40% digital and 60% print split. Brookes would like that to be 50/50 "quite soon".

Discussing why revenue diversification was key to growth, Brookes said of Raconteur's advertisers and content sponsors: "For the last five or six years, every year, we've sold to 500-600 different B2B brands. So... the most effective way for us to grow is not to sell to more, it's to be able to offer the brands that we already sell to a bigger variety of solutions and hence more value."

He added that print was a "very well oiled machine for us... but how could we provide more value for a brand that's working with us in print, which digital bolt-ons can we also offer that then start opening up analytics and data that we can share with them?"

Raconteur's publishing business (excluding its marketing agencies Alan and Sectorlight) had an average headcount of 15 in 2011 when Brookes joined the company, 37 in 2020, 52 in 2021, and is expecting to reach 82 in September with the launch of its Future Talent Programme aiming to train a diverse next generation of B2B sales staff.

Editorially, a large proportion of Raconteur's journalism is outsourced to freelances but it is approaching a team of nine people including editors, deputy editors, sub-editors and staff writers - up from two full-time editorial staffers, a managing editor and deputy editor, two years ago.

Raconteur is also preparing to launch the New Voices Programme, a free training course for business writers from underrepresented backgrounds which will involve training sessions and helping them get their work published on Raconteur. Participants will be paid for their work but will not be full-time editorial hires.

Diversity progress 'significant' growth factor

The number of female managers at Raconteur increased from 20% in December 2019 to 37% in December 2021 while managers from a black, Asian or minority ethnic background increased from 13% to 26%.

The company's median gender pay gap has decreased from 35% to 7%, meaning women get paid on average 7% less than men, and it is hoped that the remaining gap "will be fully removed" in the next year.

Brookes said candidates applying to the company have also become more diverse overall because of these changes being made.

"I think the company's so much more interesting and innovative to work for as a result of that and I genuinely believe that our progress in that area is a significant [contributor to]... our financial performance."

Often diversity panels speak about the boost to media businesses that will come with better staff diversity by helping them connect with wider audiences and bringing in a broader range of ideas. But Brookes believes executives shouldn’t need this argument in order to make changes: "The primary reason everyone should do it is it's the right thing to do - it's about fairness, it's about equity... If they need that extra bit of like 'this will help your business and business will improve' you know what, fine, if that's what it takes to do the right thing then it's probably better than nothing."

Brookes said staff were allowed to work from home with limitations even before the pandemic and now are asked to go into the office one day a week to keep "team discussions going and that creativity flowing".

"I think staff have repaid that trust and productivity's gone sky-high as a result of the remote working moves," he said.

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