Behind the wheel: Automotive magazine media sector analysis
The automotive magazine sector isn’t for the faint-hearted. There’s a lot of traffic, and you need to keep your foot on the pedal to accelerate past the competition. Karen Taylor spoke to those in the fast lane.
The good news is that the automotive sector has universal content and is backed by a massive manufacturing base, with huge marketing budgets. The bad news is that, just like the car industry itself, the economy has been difficult. There is a lot of competition and plenty of new models revving up for some action. It helps, of course, to have a pedigree. And the big brands are streets ahead of the newcomers at home and abroad.
“It’s a tough market, but we’re coping with it” admits Simon Carrington, Top Gear publisher. That hasn’t stopped the title’s publisher, Immediate Media, breaking into the hardest market on the planet – Germany. With 31 international editions already launched, Top Gear has taken considerable time to “find the right partner [Heiser]” in a market already well-served by iconic brands.
“It’s early days with the German edition, but we certainly worked hard to get the right tone and translations,” says Carrington. “Obviously it is a huge market for car manufacturing but, equally, it has a big base of very successful magazines. AUTO BILD, for example, is huge.”
From Germany, Carrington plans a route into other new territories: “There are some ongoing conversations about contracts about to be signed. So there will be more launches in the next six months. There are still regions in Europe that don’t have the magazine. Germany is important because it is a big market and once you can get a big market in Europe it opens up the Frances and Spains of this world.”
Management at AUTO BILD will be looking it their wing mirror. Says Christine Bender von Säbelkampf, Axel Springer’s international licensing director: “the circulation of AUTO BILD Germany is comparably stable. Thanks to new creative ideas and some process optimisations, AUTO BILD is still market leader in Germany, with 60 editions in print and digital in another 32 countries. It is important to maintain the good quality of the content and involve the 40 million readers around the world every month. A very big success is AUTO BILD KLASSIK, which was launched as a one-shot about five years ago. Since 2011 it has been published on a monthly basis with 120,000 sold copies (IVW, I 2013). That is a great achievement these days!”
Since its launch in 1986, AUTO BILD has become a well-known brand in Germany and in 32 other countries around the world. Bender von Säbelkampf believes “it is very important to stick to our successful concept – offering readers unique but affordable content in an easy-to-understand tone.”
Top Gear, of course, has added an injection of humour to its content, supplied by the TV series presenters Jeremy Clarkson, Richard Hammond and James May. The Germans get this, says Carrington. “The TV humour does carry through to the magazines. The guys – Jeremy, Richard and James all write monthly columns for the magazine. It’s the only place that you can read their motoring columns and, I guess, they are in the DNA of the magazines. They write their columns and also contribute to various features and this gets picked up by the international editions. And we do try and do things slightly differently editorially on Top Gear, although cars are the core subject.”
Italy is another fine motoring nation, with some stylish cars and motoring magazines. In poll position is Quattroruote (Four Wheels), founded in 1956 by publisher Gianni Mazzocchi, “who truly pioneered motoring in Italy”. Since its early years, besides providing rigorous and extensive car tests, Quattroruote has been active on the motorist’s side to promote campaigns aimed at improving road conditions, introducing safety devices on vehicles, banning wrongful tax measures, etc, says Sofia Bordone, international director and publisher, Editoriale Domus.
In Italy, as elsewhere, test drives always attract a lot of interest. Quattroruote publishes an average of eight tests and six drives monthly. “Two years ago we had the idea to create test drive events for consumers – supported by car makes and overlooked by our professional team – at the entrance of major Italian design shopping outlets” says Bordone. “Some 3,000 test drive sessions were delivered in 2011 and more than 3,500 in 2012. Drives can be booked on a dedicated mini-website.”
The potential offered by the close relationship between readers and Quattroruote has been exploited further, by launching an automotive ‘Quattroruote Advisor’ on the web, offering user generated surveys for automobile related services (from car buying to car repairing). Users also want to clearly identify the best buy. Quattroruote, therefore, decided to enter the car marketplace segment, by powering a dedicated area in its site and the car browser segment, which identifies second-hand car offers by searching Italy’s best websites. “Full integration with our data base and social media is provided,” says Bordone.
Haymarket, one of the most international auto publishers in the UK, is also seizing the benefits of online connections. Says Patrick Fuller, group director, Haymarket Consumer Media: “The exciting thing for us at the moment is digital internationalisation. We have been very strong in print, with Autocar for automotives and F1 Racing for motor sports. These are our two main brands; plus Classic & Sport Car, which is also international, but on a smaller scale. Between them they have 40 international editions around the world. But what we’re focusing on now is digital and we are effectively replicating the model we have in print into digital.
“It is an interesting time because the UK in particular is more advanced in digital commercial activity than some of the emerging markets. And so the size of the prize isn’t as immediate as it was in print. So what we are doing is enabling our partners to get into digital seriously; some of whom for the first time by helping them with technology and the business model, and the brand. That’s quite different from print where you are dealing with publishers who have been publishing magazines already, by and large, so will understand more fully from their our own experience, whereas in digital it’s not hard and fast.
Is it expensive giving this support? “The partners have become motivated to go digital, for obvious reasons, and we’re not subsidising them, but we are supporting them and helping them become digital. And we are investing more time and energy in getting them there at a lower margin then we would have done in print. But we clearly see a long-term strategic requirement. And as their markets start to evolve, the revenues will start to become clearer. We obviously expect this to happen quite quickly as automotive is a very digital business.
Haymarket UK websites are already consumed all over the world. Some 60 per cent of Autocar traffic is UK, with the rest coming from overseas.
“We are also interested in monetising traffic and asking our overseas partners to help us. But the key to it is to demystify digital for our partners. And give them a sense of what they can do with our help rather than the more daunting prospect for some of them of building something from scratch.”
Clearly, online free competition is not the big bogeyman of yore. Publishers are fighting their corner of cyber space well. Says Bordone: “The web is like a huge chest of drawers: you need to understand which drawer you should open to properly find what you are looking for. The only way to compete with the mass of data available online for free is to offer reliable information and on-going, interactive dialogue with consumers. Our readers trust us for our fairness and impartial judgement. The automotive industry relies on us to reach our vast readership (4.327 million, according to the latest survey for the print version, 2.3 million unique visitors and over one million registered users online). Our reader-users are qualified, attentive and passionate and Quattroruote often engages them in surveys on specific topics. Their feedback provides valuable information to the industry.”
Haymarket is also keen to make allies online, says Fuller: “Bloggers are part of the landscape on the web – I wouldn’t call them competition. We have bloggers who write for our brands too. They have their place. We don’t see them as competition – we feed off them and they feed off us. It adds to the knowledge and insight around cars.”
Axel Springer isn’t fazed either. “The print edition of AUTO BILD is published every Friday, but some selected content is already available on the web the night before,” says Bender von Säbelkampf. “www.autobild.de is the leading car content website in Germany. It even increases the print circulation, e.g. by gaining subscribers via the web. Print and online are integrated very well.
There is no shortage of brand extensions in auto. Motoring enthusiasts love a show. “Quattroruote has always strived to be a media system bridging industry and consumers together,” says Bordone. “A system provides the opportunity to deal with all aspects of the automotive sector; from multimedia publishing (including TV) to marketplaces, from data base services to events and safe driving training. Quattroruote is the only publisher to have created a private test circuit, to set the benchmark in independent scientific testing, and also to generate brand awareness and activities such as safety drive training, events and conferences, as well as test facilities rental.”
Top Gear magazine is a “brand extension”, says Carrington, who points out that it is one of several spin-offs from theTV programme. Top Gear has its own road show, which was headed for South Africa at time of press, and the local edition of Top Gear will be there. Apart from that, the magazine is concentrating of apps and intends rolling out its successful UK one to other major markets.
Meanwhile, according to Fuller: “Events are our most fertile brand extension. We have a lot of events in India around automotive; traditional motor show events or performance car events. We are looking to nurture events around things like The Asian car of The Year, and also strike partnerships with other companies that want to internationalise and bring their automotive events to a wider audience in the Far East. Because of the way Haymarket operates we are always interested in different business models and diversifying revenues, not only for ourselves in the UK, but also for our partners overseas. This is something we believe we’ve become quite good at. And it remains an important plank for the overall strategy.”
AUTO BILD has a lot of spin-offs. Besides, AUTO BILD, Axel Springer publishes AUTO BILD ALLRAD (4×4), AUTO BILD SPORTSCARS, AUTO BILD KLASSIK, AUTO TEST, AUTO BILD TUNING, AUTO BILD GREENCARS and as a cross-media car brand with a 360 degree strategy also an integrated website and several apps on iPhone, iPad, Android etc. In addition, AUTO BILD runs the international award of THE GOLDEN STEERING WHEEL and several AUTO BILD RALLIES.
But while there remains a keen interest in cars and motoring, the global economic downturn has undoubtedly impacted some markets.
Says Bordone: “On the verge of the eighties, Italians would consider changing cars every four years, and Quattroruote’s print run reached the extraordinary figure of one million copies, far beyond what you would expect for a special interest magazine. Around 1,400 million car units were sold in Italy in 2012, bringing back the market to levels of 1979. The Italian automotive market has almost halved in five years, suffering much more than in other European countries. This dramatic drop has had negative effects on the automotive magazine segment: In half a decade overall sales of Italian car magazines have shrunk from 1,530,000 copies (2009) to 1,051,000 (2012). However, with an average of 277,000 copies sold at €5 copy price, €17.2 million advertising revenue (€6m of which comes from online) €10m revenue made from automotive data base products, a privately owned test circuit, HD video production and an international network of 13 among licenses and publishing partners, Quattroruote has been steadily staying on course against the storm.”
The reason for this “Italian miracle”, says Bordone, is Quattroruote’s ability to “leverage the market by creating an unparalleled multi-platform communication system, a true ‘Automobile Agora’”. If you have a question about cars and the automotive related business, Quattroruote always has the right answer.
“Globally the automotive sector isn’t good,” says Fuller. “Europe isn’t great, although the UK is much stronger than the rest of Europe. But if you look at places like China and within a five year period, places like India (although they’ve had ups and downs as their economies shapes), you will see that the car manufacturers have been very positive in supporting the new markets, setting up notable manufacturing hubs, starting to build a retail footprint. And what they have done so successfully in the West they are now doing in the emerging nations. That’s great news for publishers like us, because we already have a strong relationship with manufacturers and they are looking for partnerships to help them establish a retail routine that served so well in the West. One of our intentions, and we are already doing this, is to work with the manufacturers to help consumers understand the benefits of franchise dealer networks and the technology that is available to them for the first time to stimulate demand from the growing middle class to buy cars and choose between them. And that’s when we come to help them make their choice.”
Looking outside of the established markets seems to be key. Alongside AUTO BILD’S license editions in almost all European countries, there are international editions in Mexico, Argentina (the newest launch November 2012) Indonesia, Thailand, India and China. “We see a lot of potential in those countries – also in the digital segment,” says Bender von Säbelkampf.
Carrington says China is big for Top Gear, as is Russia. “India is an opportunity, but one which is quite challenging. And there is South America. We don’t have any editions in South America yet, but certainly Brazil is a huge car market – it’s in the Top Five in the world.”
Quattrouote also see huge potential in the new markets, which have always been part of its international strategy. Says Bordone: “Russia will become Europe’s largest automotive market in a couple years. Quattroruote was launched in in 2006 in Russia, where we also ran a TV programme on NTV, the second largest commercial channel in the years 2008-2010. We’ve had a local partner in Brazil since 2003, Our Chinese edition started in 2004, our Turkish edition in 2012 and we have just begun co-operating in India; a country traditionally dominated by Anglo-saxon magazine brands.”
Certainly, Haymarket has a huge presence in India. “The markets which really excite us at the moment are India – where we have a wholly-owned business – and where we have market-leading automotive title in print and also Asia where we have a network of partners who are publishing our print magazine,” says Fuller. “Our coverage of the area compasses Indonesia, Japan, Malaysia, Thailand, Vietnam, etc. That’s where we are finding a synergy of ambition and purpose which we expect to take off in the near future. A good example of something we’ve done successfully to support them is establishing an Asian Car of the Year Award. Which is similar to the big awards in Europe such as the European Car of The Year which we launched three years ago and it is starting to grow quickly and already has commercial support from the automotive industry as a focal point at the Shanghai Motor Show.”
Haymarket is having less success in China. “China is growing very fast,” says Fuller, “But it is a very crowded market. We are in the market, doing different things, but the competition is not so much quality competition, but the sheer volume of competition makes this a challenge. And, obviously, the rules of engagement in China are more challenging in some respects than other emerging countries. So it is somewhere we are competing and growing, but it is quite a challenge in such a crowded market.
Getting a slice of ad spend is also a tough business. “The industry is huge and marketing budgets are significant, but it is a competitive landscape,” concedes Fuller, adding: “Which is good news for us because it means manufacturers spend money to differentiate and communicate with the readership we generate and while Europe is somewhat in the doldrums the emerging nations are not. And if they look at it from a company strategy perspective that clearly helps us spread our activity in an effective way helping us to deliver growth where we need it.”
There are some clear similarities shared by these market leaders – one, ironically, is differentiation; providing readers with a USP that they will pay for. The other is keeping pace with the times, as far as content and distribution is concerned.
Says Bordone: “The media crisis and the fall of the automotive market have been seriously damaging for traditional automotive publishers. The key is differentiation, which is something Quattroruote understood a couple of decades ago.” And the industry clearly perceives the value of our readership, no matter the media.
So each player stamps its own personality on its pages. For Top Gear, there is the strong thread of humour and personalities. For AUTO BILD it’s a combination of exclusive news and launches, high quality tests and practical advices.
“On the one hand, readers are really interested in the latest launches, especially in high class cars,” says Bender von Säbelkampf. “Most readers could never afford these cars, but they love to read and dream about them. On the other hand, readers want to read about practical tips and tricks for daily life, e.g. how to change tyres or how many suitcases fit into the car. Comparison tests and long term tests are also very popular.”
Certainly content is much more international then it used to be. “The news coming out of the industry gravitates to a few hubs during the year,” says Fuller. “The Geneva Motor Show, The Shanghai Motor Show. The cars we write about are very international so we write about Chinese cars and traditional ones from Europe and we’ve become more broadminded in that respect, which obviously helps feed our overseas editions. And we find information comes back from our overseas editions – so we are sharing content around the world. The other thing that has changed a bit is the length of stories and making sure we are efficient and streamlined so we are feeding stories through as quickly as we possibly can.”
Of course it is no surprise that the majority of readers are men. Their seemingly insatiable appetite for motoring facts will continue to be fed by the brands on the full range of devises. And mobile is expected to be big too. “Mobile is a huge opportunity,” says Carrington.
Fuller agrees: “The big trend is the migration to mobile. It is hard to find a better way to deliver content.”
And with expansion set for regions like India, where traditional distribution is difficult and consumers often bypass desktop computers and go straight to mobile, this is a clear opportunity further down the road.
Editions: Three, plus 10 exclusive editorial co-operations
# of spin-offs : 12
# of countries: 15 plus Italy
Worldwide circulation: 1,219,500 (including Italy).
Note: Editoriale Domus combines licenses with exclusive editorial co-operations with existing local titles (in co-branding)
# of editions: 32
# of spin-offs: 13
# of countries: 33
Worldwide circulation: More than seven million sold copies every month (publishers statement)
# of editions: 31
Readership: 12 million
Online: www.topgear.com (1.4M unique users)
# of editions: 14
# of countries: 16