Ancestry.com Reports Growth Despite Economic Slump

Despite the worst recession in decades, online genealogy site Ancestry.com says its subscriber base grew more than 10 percent in 2008. Even more important, revenue rose 18 percent, according to CEO Timothy Sullivan of Ancestor's parent company, The Generations Network.

In an interview with The Industry Standard last week, Sullivan said Ancestry.com and its sister companies currently have about 950,000 subscribers worldwide, compared to 825,000 in January 2008. He said that revenue totalled US$195 million in 2008, and earnings before interest, taxes, depreciation and amortization was "a little bit north of $60 million."

How has the company done so well, while many other online services struggle amidst a profound recession? For starters, explained Sullivan, the products offered by Ancestry.com carry universal appeal: access to digitized census and immigration records, and an online service to upload and connect family trees. The Generations Network claims that about 10 million family trees and nearly one billion names have been added by users since July 2006, using both free and subscription services.

But Sullivan pointed to several other factors which have contributed to growth. They include traditionally strong Q1 performance, because of many people's desire to start the new year by researching their family histories. In addition, the company did well migrating users from lower-priced subscription packages to higher-priced services, such as access to digitized historical records from other countries. Ancestry.com's U.S. Deluxe Membership package costs about $13 per month with a one-year subscription. The World Deluxe package is $25 per month.

Sullivan also described more effective -- and more cost-efficient -- advertising.

"We're obviously benefitting on the marketing side from a media environment which may be a once-in-a-several-decade [opportunity] to purchase media at a lower and lower cost," Sullivan said.

On the Web, Ancestry.com is using paid search, display advertising, and affiliate networks. However, Sullivan said television advertising was another area that had helped the service grow.

"2008 was the first year that television advertising became sort of the largest in [our] media mix," Sullivan said. "We really feel like we've gotten TV advertising to work in an ROI-positive way that also builds a long-term brand."

In addition to costs coming down, he said television advertising has the potential to make an emotional appeal to new customers, especially on cable television channels that meet the company's target demographics. He said Ancestry.com has run commercials on HGTV, Discovery Channel and on news networks.

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