In a rare sign of good news for digital journalism, the German media giant Axel Springer raised its 2015 revenue forecast on Wednesday. The reason? Rising sales of digital ads for the media companies in which it invests.
Axel Springer, which had some $3.8 billion in revenue last year, is known to many in Europe as a publisher of newspapers such as Bild and Die Welt, but in recent years it has focused on investing in English-language digital media companies. In September it bought a controlling stake in the web site Business Insider for $343 million and led a new $54 million investment round in Thrillist. It has also invested in Mic.com, NowThisNews, and Ozy Media, among others.
The strategy appears to be working. (This is perhaps encouraging for the company that has in the past made failed offers for legacy papers such as The Daily Telegraph and The Financial Times.) Axel Springer reported third quarter revenue growth of more than 7% and adjusted its prediction for the year from flat to mid-single-digit growth over last year.
“New digital media companies are being built and we definitely want to be a player,” CEO Mathias Dopfner said on a conference call in September announcing the Business Insider deal. “We have laid the foundation to achieve that.”
With Axel Springer raising its outlook for the year thanks to growing digital ad sales, that foundation looks to be strong enough to build a home on. Look for the company to make more investments in online journalism in the near future.