Summary:

The UK publisher of 230 local newspapers has set ambitious digital growth targets for its new CEO’s turnaround. So far, Johnston’s online gains are going slow from a low base. But the most interesting part of its strategy may lay ahead.

Ashley Highfield
photo: BBC

Johnston Press, the challenged UK publisher with 230 local newspapers, is finding small digital gains as CEO Ashley Highfield begins implementation of his multi-platform turnaround strategy.

Digital revenue in the first six months of this year grew by 8.4 percent to a still-small £10.3 million ($16.2 million) (announcement). That was thanks partly to a quarter more online property classified sales after Johnston outsourced its service to Zoopla last year.

Johnston has previously outsourced births, marriages and deaths announcements to iAnnounce; job ads to rival DMGT’s Jobsite; local reviews to Qype and video ads to Localstars. Now it is hoping a further, recently-inked deal to outsource its motors ads to recently-sold Motors.co.uk will help turn around its declining sales in that category.

Despite wrestling with growing debt, Johnston is still profitable to the tune of £13.6 million. But half-year company revenue fell eight percent to £176.1 million because it lost 12.5 percent of the print advertising on which it depends – something it blamed on the Olympics, during which many advertisers pulled back spending.

Johnston’s online track record has lagged badly over the years. Its lo-fi online income equates to just £44,206 earned over the half year from each of its 233 local news websites. The company has re-jigged sales management to turn around its declining national online display ad sales.

But the strategy set in place by former BBC and Microsoft UK online leader Ashley Highfield, who joined the publisher as CEO a year ago, looks genuinely compelling.

Beside steadying the print ship with cost cuts and iPad editions, Highfield and his digital platforms director appointment Alex Gubbay envisage aggregating related content from across Johnston’s splintered local network in to thematic national portals (for instance, entertainment) that can compete at the UK level.

And they are targeting £52 million in annual digital revenue by 2015. That means Johnston will need to more than double its current online performance in four years.

“In this integrated print/digital world, we believe we are the true home of ‘local, social, mobile’ and our trusted brands (across paid- for print and online) have increased their reach in the last year by 26.0%, with growth in online and in mobile substantially exceeding the relatively small decline in print reach,” Highfield says in Johnston’s earnings disclosure.

“This provides us with further opportunities to monetise this platform in the future.”

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