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The Axel Springer group is pretty big, it’s active in 44 countries and generated revenue of €3.3bn in 2012.

13,650 people are employed across the group, which includes more than 230 publications such as Bild, but also companies such as Zanox (which includes Affiliate Window).

But despite its size, Axel Springer is using startups and a new culture to drive digital change and growth across the group.

This has been a big step and is a trend we’re seeing in many industries – see John Lewis’ recent announcement of JLabs, a call for entrepreneurs with a £100,000 investment to the best new startup.

At Digital Media Strategies 2014, Springer Electronic Media CTO Ulrich Schmitz talked to us about developing a digital portfolio.

How does one develop new business models in the light of digital? What is the best way to foster innovation and entrepreneurship? And when does one integrate digital investments or indeed keep them separate.

The pillars of print and digital

In 2000, the web strategy of Axel Springer’s various media brands was acknowledged as poor.

However, it was also acknowledged that the three pillars of the group’s print media at the time are translatable to (and indeed also the pillars of) digital within a media company. Namely: 

  1. Content
  2. Marketing
  3. Classifieds and marketplaces

So, in 2004 a digital roadmap was developed. The idea was to foster current brands in the group that could become market leaders digitally and also to acquire some new companies.

From 2006 to 2013, Axel Springer acquired more than 80 companies and decided to foster innovation in 110 of their existing brands.

These existing brands that were transformed were done so primarily with new digital content strategies.

A new approach to recruitment

Part of the digital roadmap also involved a new approach to recruitment (see Axel Springer's site), encapsulated perfectly by the following video.

Axel Springer wanted to recruit a new breed of executives that think like entrepreneurs and not managers with budgets.

‘Becoming’ a startup

Since 2012, Axel Springer has had even more of an entrepreneurial drive as the group has started to invest in start-ups.

Part of this is acquisition of early stage companies.

Alongside this, new business models were developed, including online travel guides (TRAVELBOOK.de) in association with TripAdvisor, a second screen social TV service (TunedIn), an interiors marketplace (ICONIST) and more.

Runtastic is a good example of one acquisition showing tremendous growth in digital. Runtastic has more than 30 health and fitness apps, which together have seen more than 50m downloads.

But further than acquisitions, the group has partnered with the Otto Group (a big ecommerce group that was has its history in mail order), company builders Project A and a silicon valley accelerator to invest in startups. 

So far the so called Plug and Play accelerator has enabled investment in 14 companies, supported them with €25k and provided a place of work and a network of consultants, in return for a 5% stake in the business.

plug and play accelerator by axel springer

Of course, this leaves Axel Springer in a sensitive position, the dilemma of being a VC investor as well as a strategic investor. Traditionally VC will not get involved in anything strategic, just sit back and let a startup get on with it. Axel Springer has to be careful not to interfere, it can’t simply take the best startups and integrate them into the broader group.

The advantage though of investing in these startups is significant learning that takes place between the wider group and these startups.

Hack days are being held to allow everyone involved to benefit from this burgeoning area of development, and to find new solutions to digital content problems.

This idea of freedom for employees, investment in content and new forms of content delivery, new business models in media (from online subscription to ecommerce), these are all changing publishing as we know it. Axel Springer hopes to be at the forefront.

mediahackday logo

shot from a media hack day

Ben Davis

Published 5 March, 2014 by Ben Davis @ Econsultancy

Ben Davis is a senior writer at Econsultancy. He lives in Manchester. You can contact him at ben.davis@econsultancy.com, follow at @herrhuld or connect via LinkedIn.

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