April 11, 2016 | Lucy Tozer
A recent report featured on Digiday showed that according to their latest financial results, 70% of Axel Springer’s revenue came from digital.
Axel Springer’s CEO, Mathias Döpfner, had a 10 year goal to have 50% of the company’s revenue coming from online products by 2016. This target was beaten significantly by 20%. The secret to success is the company’s focus on three main business models; paid content, classified ad business and marketing.
Jens Müffelmann, president of Axel Springer USA, explained “We started with a focus on later-stage investments, such as established business models strongly aligned with our strategy, with rather complex merger and acquisition processes.” Then, two years ago, they needed to change their strategy. They wanted to invest in more early-stage development businesses and target the US.
Since 2013, the company has invested in more than 90 early-stage businesses. One successful investment example has been ‘Runtastic’, an Austrian fitness app. In 2013, Axel Springer took a majority stake in the business and sold the app to Adidas two years later, making a huge profit of €20million! Müffelmann commented “In the case of Runtastic, we supported them with our existing marketing power across Germany and Europe in order to drive awareness for their product.”
Their mission to target the US also proved fruitful, with their US portfolio focusing heavily on digital-content businesses. Axel Springer currently owns Business Insider and has shares in NowThis, Mic, Ozy and virtual reality business Jaunt. Most of these present opportunities for content sharing.
Müffelmann also said that the company will be further focusing on classified businesses and marketplaces that have the potential to disrupt the old guard. Media analyst, Thomas Caldecott, suggested that the classified market is lucrative, with fewer competitors than online news. However, Caldecott also said “The print-to-digital transition that drove growth is fairly advanced now in most markets and it may be that Springer has entered classifieds too late when the leaders are already established and competition is more fierce.” … We look forward to seeing more from Axel Springer in the future!
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