Student news website The Tab earned back most of its £750,000 price tag in a little over a year, according to its new owner Digitalbox.
The company, which also owns pop culture news site Entertainment Daily and satire website Daily Mash, acquired youth and student-focused publication The Tab in October 2020 and put it into profit within a month.
Chief executive James Carter said the company was now seeking to grow the brand with a politics vertical and additional editorial staff.
In its full-year results to 31 December 2021, Digitalbox reported revenues had increased by 68% from £2.2m in 2020 to £3.7m.
It attributed the growth in part to “a big shift in advertising spend to highly engaged users on mobile devices which is where Digitalbox’s sites excel”.
Carter told Press Gazette Digitalbox now planned to invest in The Tab.
"The first thing we're looking to do really is increase editorial resources to help us maximise campus engagement," he said.
“The second thing is we’re looking to broaden the content mix. So we are appointing an editor for what you could term as a political channel, we’re calling it Agenda, which’ll be more youth politics-based comment and views.”
Carter said the company had identified “three or four” positions it wanted to recruit for, but added they will "steadily invest as and when we get results". He noted that year-on-year staffing at the business had already increased by between 20% and 30%.
Data driving results
Digitalbox describes itself as a “mobile-first” media business, drawing more than 88% of its audience through mobile devices. It says its collection of advertising technologies, named Graphene, “has been shaped to deliver the best user experience through the fastest and lightest page load speeds on mobile and highly efficient advertising auctions”.
Across the company, Digitalbox said its user base grew 82% year-on-year, with an average of 22 million monthly user visits to its sites.
Carter said data derived from Graphene had driven the returns. User session values, he said, had increased 124% from the fourth quarter of 2020 to the fourth quarter of 2021.
“It's not because we've got any good salespeople, because we haven't got any salespeople at all," he said. "It’s because the data has gone in the direction to drive the results and the performance.”
Although the company is trialling an ad-free experience with satirical news site The Daily Mash, which has signed up more than 450 paying subscribers who also get six exclusive stories per week, Digitalbox remains largely focused on advertising.
Asked why, Carter said the “reason we've managed to build a business - a successful business - is because we've had a blank sheet of paper, and we've approached it from the perspective of: how are we going to do business here?
“We've not had print editors in the background saying: ‘You can't have that many ads on the page!’ or ‘How can we possibly run that in the middle of that article?’ - we've not had any of those legacies.
“All that stuff is a massive distraction that does disable a lot of businesses that are trying to look forwards and take a future-proof position for their business.”
'Lack of distraction' has helped build success
He brought up the notion of “the innovator’s dilemma”, which he said is when “you've got all the skills, all the ideas, but you just can't get off the treadmill that you're on”.
He cited electric car producer Tesla as a company that “look[s] at what the future looks like, and build[s] the future” and is now being chased by competitors.
Questioning why the competitors had not responded more quickly to the same trends, Carter said: “I'm sure they had the skills, but they didn't [react]. Why didn't they? Now they're all following and trying to play catch up.
“Same can be said for media. If you go inside Immediate Media, they'll probably be concerned about Radio Times copy sales in those very grey retail destinations known as WH Smiths that are slowly dying on every high street. They're probably worried first and foremost about that.
“Maybe they have to, because it's still their biggest revenue source at Immediate. But it does really change the way you think about things.
“I think that's why we've been able to construct a successful model - because of lack of distraction.”
Press Gazette asked Carter whether Digitalbox talked to its editors about what they were happy with when it came to advertising.
“Oh, absolutely, yeah. I mean, the editors in our business are king. They really are. Without editors and editorial teams we have nothing. And everything is built around how they can deliver the audience, first and foremost. So they absolutely have an opinion.
“But there's also a level of acceptance that perhaps doesn't exist in operations that are less focused, I suppose… what we've done particularly well is streamline the focus to the things that really matter and deliver a profitable model.”
Carter said he had noticed lack of focus as a trend when assessing possible acquisitions in the past year.
“You look at them and you think, well, right, they're doing a podcast. Okay, well, that loses money. ‘Oh, but it's justified as being a great marketing thing to do.’ Okay, fine.
“‘We're operating on Facebook. We've got a million followers on Facebook.’ None of them really engaging. ‘Oh, it's good to have.’
“There are 101 different things going on; 99 excuses on those 101 pieces of activity. And quite often it’s probably only two or three - I'm exaggerating, but you know - it certainly is only a small number of things that are actually making sense.
“And when you get to that position, it's quite difficult to extract yourself from it, because you've become wedded to solutions that you have created.”
Prior to Digitalbox's buyout, The Tab's investors had included News Corp and investment firm Balderton Capital. Founded in 2009 in Cambridge, it established numerous localised editions in university towns throughout the UK and abroad.
The Daily Mash was founded in 2007 by journalists Paul Stokes and Neil Rafferty of The Scotsman and Sunday Times respectively. Digitalbox bought the site in February 2019.
Picture: The Tab screenshot