Going digital-only was once seen as a last desperate throw of the dice for a dying print brand. But not any more.*
Take Auto Trader as a for-instance. If anyone was going to be sunk by the rise of digital media it was a magazine based almost purely on classified motor vehicle advertising. For those who haven’t noticed – the advertising of cars, houses and jobs has now moved almost exclusively online, with devastating consequences for newspapers (and to a lesser extent magazines) large and small.
Trader Media Group (joint owned by Guardian News and Media and Apax) is the ultimate example of how an old-fashioned print business can not only survive but really thrive in the digital age.
Back in 2000 Auto Trader was selling 368,000 copies a week and helping Trader Media achieve revenues of £220m a year. (It was an early adopter to online by the way and at that point claimed to be attracting 28m ‘page impressions’ a month.)
In 2005/2006 (reckoned by many to be the high water-mark of print newspaper profitability in the UK) it reported turnover of £303.3m and delivered an operating profit of £119.5m. (By this stage it was attracting 6.6 million unique users to its website a month).
This week Trader Media Group announced that its dwindling print edition would be scrapped at the end of June. At last count it sold 27,000 copies a week compared with claimed website traffic of 11m unique website visitors a month.
In the financial year to April 2012, Trader Media Group achieved turnover of £257.2m and an EBITDA profit figure of £142.9m.
Now the profit figures may not be directly comparable. But nonetheless, I would be surprised if any other big media brand can claim to be actually making more money today than they did in 2005. Apart from the little matter of digital disruption we are now five years in to the biggest media downturn in history.
Auto Trader has succeeded by being the very best at what it does. Its free-to-air website is supercharged with an array of digital tools which make it the perfect place to buy and sell your car.
Ebay has made some in-roads into this market, but most of us still feel that a decision on which car to buy is too important to trust to a general auction website. So the market is still dominated by Auto Trader and the other specialist sites.
I’m sure Auto Trader has also been enormously helped in its move to becoming a digital-only business by the print heritage which has made it a trusted brand. Its success shows that you don’t always swap print pounds for digital pennies when you move from being a paid-for newspaper or magazine to a free website.
*Declaration of interest: Press Gazette went digital-only at end of last year.