Look at businesses outside your own industry for digital inspiration, media publishers were advised at this week's Association of Online Publishers forum.

The ecommerce industry, the speakers suggested, is a particularly rich source of ideas with existing technologies that could help newspaper and magazine publishers with their online operations.

Easier said by a consultant than done by a long-standing publishing company, perhaps? Not according to speaker Edwin Ulak, publishing director, digital, at Trader Media Group.

The digital development of an established print product, Trader Media's AutoTrader.co.uk website, has put digital at the heart of the publisher's business - both financially and in mindset, says Ulak.

"By 2006 digital was contributing more to the company's bottom line than print. We were not changing print into a digital business, but the digital part of our business has grown," he says.

The AutoTrader brand online does something very different from its print offering, he adds - as a lesson for publishers looking to differentiate their online product in the hope of generating more revenue, whether from micropayments, pay walls or subscriptions.

But Ulak recognises the benefits of a print background: "We had a significantly successful business in print before going online - we realised that the magazine was a powerful marketing tool."

Internal battlelines
When the group began its move online - the first incarnation of Autotrader.co.uk was launched in 1996 - the company's digital team was set up in competition with its regional print divisions, explains Ulak.

"Either by accident or by genius this created a situation where this digital business was able to grow quite aggressively," he says.

Admittedly, this setup may have affected some internal revenues, but more importantly it cannibalised those of its competitors.

Furthermore, now digital has moved from the periphery to the core of the business, AutoTrader has also established competing digital teams to keep momentum going.

Customer vs audience
Away from the internal organisation of the digital aspects of the business, the site's focus on its customer base - its vehicle dealers - above readers and an audience, has also been crucial to its success.

The site now attracts between 8-10 million unique users a month, but, perhaps more significantly, £100 million a year is generated by the website, says Ulak.

There's plenty of content available for users coming to the site, but this is provided by the paying subscriber base.

"Our initial focus with building the AutoTrader website wasn't on audience and creating a rich user experience, it was on signing up the customer," says Ulak.

"There was confidence that the content the subscribers were generating would attract an audience."

Looking for innovation
To keep its paying customers happy the digital team moved into producing desktop applications, for example, to help car dealers manage their accounts with the site.

According to Ulak, Trader Media is now one of the biggest desktop application creators in the UK.

"We ignored the fact that we weren't a software company, but we made software; that we weren't a web development company, but we made desktop applications, because we wanted to make money," he says.

A large sales force behind the print brand also helped provide intelligence for the online team about what digital products the site's paying customers would need.

As such, Autotrader.co.uk has not only brought digital change to Trader Media as a whole, but has now begun to innovate in the edges of a digital core.

The initial downside to this was that the group was managing several different business without the necessary structures in place to do so, says Ulak.

While a proponent of rapid online growth, understanding what it is your business does - its core purpose - and investing in it is just as important with digital, he adds.

In Autotrader.co.uk's case this was search: "Search was the one piece of functionality that we needed to connect the chain all the way from the customer to the subscriber."

A large-sum investment in the site's search technology has resulted in it becoming one of the five most used search engines by UK users, he says.

GNM and digital assets
For news organisations looking to make the same transformation in their businesses, Ulak acknowledges the current lack of resources and funds for investment.

Two things can help this, however: sharing knowledge within the industry; and realising that innovation doesn't have to be self-funded.

Part of Trader Media's own story illustrates this, he says: last year Guardian News & Media sold its share in the group to help generate a one-off profit of £306.4 million. The news group bought and sold an asset that allowed them to fund innovation, he explains.

And suitably it was Trader's success as a digital business that helped broker that deal - and future financial success: "The group's valuation was supported by our change to a digital business. Shareholders believe that they will have a much more valuable asset with this transformation."

Free daily newsletter

If you like our news and feature articles, you can sign up to receive our free daily (Mon-Fri) email newsletter (mobile friendly).

blog comments powered by Disqus