Meet the Mail's online revolutionary
Andy Hart's a man on a mission - to shake up the Associated brand and turn the company into a major player in new media. Ian Burrell reports
Monday 27 March 2006
The day is not far off when the bust of Lord Northcliffe will look down across the vast atrium of the Associated Newspapers headquarters as staff traipse into work in trainers, jeans, sloppy T-shirts and even on skateboards.
Northcliffe House is home to the Daily Mail and The Mail on Sunday, famously two of the most traditional, pressure-cooker newsrooms in British media, where a heads-down atmosphere of professionalism prevails. Mention clothing brands like Vans and Diesel and you'll probably be directed towards the company's distribution vehicles.
But the dawn of jeans and T-shirts is fast approaching and will be a graphic indication of how one of Britain's most famous news media organisations has firmly embraced the internet age. In June, Andy Hart will move his Associated New Ventures troops from their current home in Charlotte Street to Northcliffe House. This is no fledgling operation. Associated has spent £100m on new media in the past two years and Hart, who is 39, expects the digital division to be delivering in excess of 10 per cent of the total group profits this financial year.
This, he says, is "a massive turnaround", given that the division "lost more than we made" when he joined the company three and a half years ago. "It reflects the growth and maturity of the online market and reinforces that we are following the right strategy."
In the British online property market Associated is now second only to Rightmove. In the jobs sector, where it owns Jobsite, it is number one and its main competitors are not newspaper-linked sites but independents Monster and Total Jobs.
Hart's tactics have been based on targeting and buying up successful new media businesses, retaining the existing management. He's assembled a portfolio of 13 website brands, mainly in property, travel and jobs. "We realised the winners would be businesses that understood their markets and built technology to facilitate the needs of users."
Associated's key property sites are Find a Property (mid-market, residential and predominantly based in London and the South-east), Prime Location (national, upmarket and bought by Associated for £48m) and Homes & Property (a companion site to the Evening Standard's property supplement). The division has expanded into legal, pharmaceutical and secretarial job sites.
Hart also presides over a portfolio of specialist digital magazines (such as the personal finance site thisismoney. co.uk) and companion sites to the group's newspapers (such as theEvening Standard's thisislondon.co.uk). The online empire also includes the Daily Mail's Mail Online site, which has a reader comments facility that allows editor-in-chief Paul Dacre and his colleagues to monitor feedback on stories.
Hart believes Associated's editorial values give his companion sites an edge over their rivals. (Which, in the case of thisismoney.co.uk, is other specialist personal finance sites.) Through its Associated links, thisismoney.co.uk offers "specialist journalists with a deep understanding of the market and an ability to publish in a very easy-to-consume way from a trusted source".
Like Rupert Murdoch and his News Corp empire, Associated has had an on-off relationship with the internet. Early sites, launched a decade ago, included Charlotte Street, aimed at women, the football site Soccernet, a jobs site called Big Blue Dog and Under One Roof, which was dedicated to property.
"Associated had tried to publish newspapers online and found it very difficult to "monetarise" them and create economic value," Hart says. "When people were searching online for information, facts and things to buy, this packaged product of a newspaper didn't translate directly." Its online adventure's big turning point came in March 2004 with the £35m purchase of Jobsite, based in Havant, Hampshire. "Boy, has it given us a fantastic return," Hart says. "Once we saw the level of margin that can be earned from those businesses, which is in excess of 40 per cent, we knew we had to have more."
The sites he is looking to buy must have potential to be a "top one or two brand". He thinks personal finance is an online area that still has great growth potential, as do dating and gaming.
Jobsite's performance (which Hart describes as "superlative"), at a time when print advertising was struggling, convinced even Associated's most hardened cynics of the potential of such online ventures. "We take a very long-term view here. That's one of the great things about being a family-owned public company. You can make decisions and investments that give the managements of these businesses time to do the right thing," Hart says.
He also claims internet entrepreneurs are not daunted by the prospect of working within the culture of Associated. "We stand alone and we are there to help," he says of the hands-off approach that leaves existing managers of sites in post. "We have created an environment where these managers thrive. They love it. It's better than before."
Hart acknowledges the efforts to embrace the internet made by other newspaper-based organisations, notably the Guardian Media Group, but feels the Associated model is the soundest in business terms. "They (The Guardian) have got fantastic traffic but they are not making the levels of profit that our strategy delivers and they've got an enormous cost base," he says. "I would trade high levels of traffic for high levels of profitability any day - because we are in business. I really believe we are the most forward thinking digital media division of the newspaper groups."
Hart says Craig's List, the classified-based online phenomenon that has captivated America, snatching advertising from local newspapers, is a "wonderful story" but adds: "The quality of the information in the ads is very limited. With recruitment, finding a match is hard and trusting the source is hard."
Associated attempts to keep its sites fresh by making advertisers renew every week. "My competitor sites leave ads there for four weeks," Hart says. He firmly believes that advertisers will pay good money for "quality" job applicants.
Hart says there is a place for classified advertising in newspapers, when people spend key parts of their day off line. But he says there is a basic difference between print advertising, which is about "reach and target audience", and online, with its more specific return of "leads and sales". He says: "Because online can measure the effectiveness and is more accountable, print is having to think about how it works with its advertisers."
Hart joined Associated from drinks giant Diageo, for whom he was developing a network of in-store digital TV channels for the retail sector. He was previously UK and Ireland CEO of Ask Jeeves, which he grew to Britain's sixth-largest website. And he has prior experience of the newspaper world as a former MD of Sunday Business and publishing experience as a former senior vice-president at IDG. Prior to that he worked in advertising.
"I've got the grounding in print, tech, media, newspapers, corporate venturing," he says. "I wish I could say it has all been planned. It was more luck. But the timing has just been fantastic." Hart is sharp and impressive but clearly doesn't believe in hiding his light under a bushel.
He admits that one of the things that keeps him awake at night is how giants such as Google and Microsoft will emerge as his competition as their outlooks become more local. "They've got the money, the power, the reach and the design to have a go," Hart says. "For my more developed businesses I'm less worried. Those that are still building market share could get hit very hard."
The prospective move alongside the Associated empire's more traditional divisions does not worry him. Associated New Ventures' success has earned it the respect of print colleagues and Hart is not about to change his business model and certainly not its jeans and T-shirt culture. "I think it's healthy for this building to have a different dynamic," he says. "It's vital for my division - we may run some newspaper sites but it doesn't make us a newspaper company."
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