JOE.ie boss McGarry plots €20m move on UK market
"Digital is just so quick to change and quick to move. If you are operating on a strategy from 2013, it's already absolutely redundant," according to Maximum Media founder Niall McGarry, which operates the fast-growing JOE.ie and Her.ie websites.
"We have a business plan for six to 12 months. We've a long-term view of where we want to go, but every six months we refine the business model."
The company, which is also backed by former Munster and Ireland hooker Jerry Flannery, is spending €1.5m to expand in the UK by bring its male-focussed JOE brand to the British public. The JOE.co.uk site has already 1m unique visitors per month and 83,000 Twitter followers - before even being properly launched. A proper ribbon cutting will take place on June 15.
"There are opportunities to create a new media business there. We're looking to expand to where we have a stg£15m business in the UK. I think that is achievable."
As well as its 'lad lite' Joe offering, it will also create a football and fitness/health site.
The growth trajectory of the firm has seen it "hounded" by private equity firms looking to take a stake. There was also a buyout approach rebuffed last year.
"We got offers last year of about €10m which I thought was a bit short".
Entrepreneur McGarry, 37, set up Maximum Media in 2010 and owns 73pc of the equity according to filings. Flannery is an 18pc shareholder and director of the company. The group was established with about €330,000 in backing from AIB, now one of the group's biggest customers.
McGarry set up Galway specialist marketing group Impact after college. He sold the company to H&R before moving into digital publishing with Maximum. The firm runs the flagship JOE.ie as well as Her.ie, SportsJOE.ie and Herfamily.ie. JOE.ie has 2.3m unique visitors every month, with SportsJOE.ie about 900,000 per month. Some 1.2m people click through via Facebook or Twitter.
Unlike traditional newspapers, which rely on circulation and display advertising, Maximum Media makes the bulk of its money from branded content or native advertising. This is where editorial is paid for by advertisers. Heineken may pay for content related to the Heineken Cup. It's different to advertorial because it's racier and more appealing.
"We were making branded content long before anyone," McGarry says. "Activating brands through content is what everybody is doing now."
The improving economy is boosting ad spending but digital advertising is "exploding" he says. At one stage cost per mille (an industry standard based on 1,000 people viewing a page) was about €2. Maximum Media gets "€9, €10 or €11" now.
McGarry points to a PwC report that forecasts that digital advertising will pass TV advertising in the US by 2019.
Revenues have doubled from €1.4m to €2.75m over the last year, with profits rising from €175,000 to €400,000.
"I'm not in the business for €400,000," he says. "But we doubled our staff and we launched two new sites last year and we did it all from cash. There was no funding."
The digital ad market is growing at such a fast rate that McGarry believes the firm could double its revenues again this year, especially with the UK site launching.
"When I set up JOE.ie - in 2010 - at the time online was a Chernobyl-esque zone. It was desolate," he says. Looking at the market with his advertising background he realised there was a gap for specifically male-focussed content. There was plenty for women between magazines and TV shows such as TV3's Xpose - but nothing for men. The low-cost base of online publishing makes sense.
"If we had been a magazine for men I probably would have sold more advertising in 2010 but I wouldn't have seen out 2011," he says.
"The long-term play is in digital and digital only. I don't see there being newspapers in 15 years. I don't see the need for it in 15 or 20 years. It's a while away though, because newspaper readers are still attractive to advertisers. I don't think they'll be gone in five years," he says.
"I read papers and I also read online… but I've cut out the laptop. I read on my mobile.
"The industry is changing and I think that digital publishers have a huge future. I think that the publishers that align themselves with the big aggregators like Facebook are the ones that will do the best and stand the test of time," he suggests.
Some 65pc of JOE.ie and the other sites' traffic comes via Facebook, with 20pc coming through the apps and about 15pc direct traffic.
Scrolling through social media and clicking through to content is the way people will consume content, McGarry believes. "The idea of people going directly to a website now doesn't really work. People want to be part of a community. Don't take offence that people don't log in directly. They still want to be part of something like JOE.ie - but they just come in a different way."
Facebook is a wonderful tool for publishers. "But there's only so many publishers that they can look after… the ones with reach or scale. New people coming into the market will find it difficult to gain reach," he says. "If you want to grow a new business you'll have to spend an inordinate amount of money with Facebook.
"A lot of people have got into this space in the last year. I think they are going to struggle to get the numbers. The door has closed in terms of them getting numbers cheaply - now it's going to cost them." McGarry estimates that the company will spend between €500,000 to €1m on Facebook and Twitter this year between Ireland and the UK.
"We are the only new iconic brand in 20 years," he says. "We want to be a top-tier media brand.
"The top-tier brands are things like Today FM, Independent Newspapers and RTE. Who will be the top-tier brand in digital? There's definitely an opportunity."
Sunday Indo Business