Dennis Publishing has predicted that it will generate more than half of its advertising revenue from online within two years.
Dennis chief executive James Tye told Press Gazette that about a third of Dennis’s advertising revenue currently comes from digital advertising – but said that figure that will pass the half-way mark by 2009.
With about half of revenues coming from circulation, digital advertising now accounts for about 15 per cent of Dennis’s total revenue.
Tye said: ‘To put it in context, if you look at what we were doing in 2004, our total revenue was 35 per cent print advertising and four per cent digital – and in 2008 the budgeted numbers will be about 24 per cent print and 14 per cent digital, so that’s a massive change”.
According to accounts filed in October with Companies House, the privately held company which still lists founder Felix Dennis as its sole shareholder saw pre-tax profits increase from £361,000 in 2005 to £2.06m in 2006 on turnover rising from £61.25m to £62.28m.
‘What has not changed is that more than half our revenue has historically come from our readers and continues to come from our readers – either from subscriptions or on the newsstand,’said Tye.
Dennis’s news digest The Week posted a 19 per cent increase in its last ABC audit this summer. Elsewhere, declining circulations have been offset by increasing cover prices.
Dennis has been adapting to its changing business by focusing on new, online-only, titles like digital lads’ mag Monkey and technology site ITPro.
This year, Dennis’s Skunk Works development unit launched five new websites, including Know Your Mobile, which now has more than 200,000 monthly unique users.
An additional 10-strong product development team, headed by Bruce Sandell, is set to launch a series of larger-scale products in 2008. It will focus largely on digital products and is expected to launch its first product in February.
The new investment will come out of profits from Dennis’s UK operations, rather than the £120m it raised by selling its US arm, said Tye.
Dennis has also been reorganising its internal operations to adapt to a more digital focus, Tye said.
Four of Dennis’ titles now have a new cross-media content-management-system known as Project Latitude. Some of the software for the bespoke system, which is to be rolled out to 14 additional titles, was written by Computer Shopper editor Paul Sanders following close consultation with other editors in the group.
Advertising at the start of online videos is not currently a major source of Dennis’s digital revenue, but Tye said he expects this to change. A new three-member video production team shoots and edits videos across the group’s titles.
‘We still want our journalists to be competent or excellent in video presentation – but we can’t expect every journalist to do that, or they’ll end up doing three jobs,’Tye said.
Tye has risen through the company since starting as features editor of Windows magazine and a stint as editor of PC Pro before moving into management.