INTERNATIONAL
A Publisher’s Internet Strategy
Bert Wiggers
Director New Media
Sanoma Magazines International
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Net Sales by Division
24%
5%
44%
16%
11%
Sanoma MagazinesSanomaSanomaWSOYSwelcomRautakirja
Division of SanomaWSOY
* Personnel under employment contract, average.
Net sales M€ 1,219EBIT M€ 132Personnel 5,584
Net sales M€ 457 EBIT M€ 63Personnel 2,672
Net sales M€ 684EBIT M€ 51Personnel 7,214
Net sales M€ 132 EBIT M€ 13Personnel 437
Net sales M€ 309 EBIT M€ 48Personnel 2,455
SanomaWSOY
SanomaWSOYEducation and Books
SanomaMagazines
RautakirjaSanoma SWelcom
Net sales M€ 2,742EBIT M€ 293Personnel 18,434 *
Operating Profit by Division
17%4%
43%
20%
16%
Sanoma MagazinesSanomaSanomaWSOYSwelcomRautakirja
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Sanoma Magazines, some facts
• > 50 million people read our magazines monthly• Sales > € 1,2 billion (2006)
• 4th European consumers magazines publisher
• Market leader in Finland, Belgium, Hungary, the Netherlands, Bulgaria, Russia, Czech Republic
• Operate in 13 countries with 6 editions of National Geographic; 8 editions of Story; 10 editions of Cosmopolitan (including Kazakhstan)
• We sold 442,632,000 copies in 2005
• Serious online positions and ambitions
• Online sales now 8%, growing double digits
• The Russian Cosmopolitan is the biggest edition outside of the US.
• 5,500 people on the payroll
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Our leading magazines titles
FIN
FIN
265,650
320,500
RUSRUS
980,000
240,000
NLNL BELBEL
HUNHUN
233,045
221.439
512,160
337,880
356,500
295,000
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Go East, Young Man, Go East!
CROATIA
SERBIA
SLOVENIA
THEUKRAINE
BULGARIA
RUSSIA
2001
2004
2004
2005
2005
2006
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Belgium# 1 market position
Sanoma Magazines Belgium GDP growth 2.9%
Finland# 1 market position
Sanoma Magazines Finland GDP growth 4.3% Hungary
# 1 market position
Sanoma Budapest Kiadói Hearst Sanoma Press Pub.
GDP growth 4.7%
Croatia# 2 market position
Adria Media Zagreb GDP growth 7.1%
The Netherlands# 1 market position
Sanoma UitgeversSanoma Magazines Int.
GDP growth 4.5%
Bulgaria# 1 market position
Sanoma Bliasak Bulgaria GDP growth 7.8%
Romania# 4 market position
Sanoma Hearst Romania GDP growth 8.2%
Czech Republicleading market position
Sanoma Magazines Praha GDP growth 7.2%
Sanoma Magazines’ chosen markets
Serbia#2 market position
Adria Media Serbia GDP growth 7.8%
Russia# 1 market position
IMH GroupGDP growth 8.2%
GDP growth 9.1%
Slovakiatrade magazines only
Sanoma Mag. SlovakiaGDP growth 8.4%
Slovenia#2 market position
Adria Media Ljubljana GDP growth 6.2%
Sources: EIUGDP growth is Nominal GDP growth, purchasing power parity 2007 (FC) compared to 2006
Ukraine # 4 market position
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Preferred license partner
The best known global brands:Cosmopolitan - Playboy - ElleFHM - Maxim - Disney - Auto BildNational Geographic
Czech Rep. Hungary Romania Croatia Russia Bulgaria
Elle Serbia and Elle BulgariaThe Russian edition of Cosmopolitan is the biggest outside of the US; we
also publish Cosmo in The Netherlands, Finland, Hungary and
Romania
Finland The Netherlands
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Transferring Concepts - own titlesUkraine
Ukrain
e
BulgariaBulgaria
CroatiaCroatia
SerbiaSerbia
Czech RepublicCzech Republic
HungaryHungary
RomaniaRomania
Belg
ium
Belg
ium
Th
e N
eth
erla
nd
sT
he
Net
her
lan
ds
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Where are we, on internet?
• Market leader (as ‘internet publisher’) in the Netherlands (ilse media) and Hungary (Sanoma Budapest)
• Strong position in Finland• All 13 SMI countries have POP sites (=marketing)• Some ‘real sites’ in some countries• A lot of ambition to realize a number 1 position in more
countries– Acquisitions in the pipeline– More internet staff to be hired
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West grows, East boomsgrowth internet advertising
0
10
20
30
40
50
60
70
80
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
perc
en
tag
e p
er
year
western europec&e europe
Source: PWC internet outlook 2007-2011
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3 types of sites, businesswise
• Point of Presence (POP)• brand extension• Subscriptions, more info for readers, etc etc• Not making a lot of money
• Sites with a business model• Run as business units, making profit• Some community sites (dedicated)
• Sites without a business model• Fun sites• Communication sites• A lot of community sites
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Strategy: simple approach
A lot of ways to analyze internet sites• Horizontal vs vertical• Click away vs destiny sites• Editorial vs user generated content• Content vs services• Web 1.0 vs 2.0• Social networks vs editorial broadcasting• ...
The right way: follow the money• Forget magazine-driven visions• Don’t think of existing business focuses within your company• Follow the user’s clicktrails (and wallets)• Banners&buttons are important, but clicks generate most of the
revenues
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Internet value chain
content &
services
content &
services
impressionimpressionimpressionimpression
clickthruclickthruclickthruclickthru
salesalesalesale
leadleadleadlead
€€0,0150,015€€0,0150,015
€€0,120,12€€0,120,12
€€1,151,15€€1,151,15
€€20,0020,00€€20,0020,00
€€0,030,03€€0,030,03
€€1,501,50€€1,501,50
€€300300€€300300
€€30003000€€30003000
content &
services
content &
services
content &
services
content &
services
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And in Western Europe...
• Saturated magazine markets• Magazines are competing in time of the
consumer with TV, newspapers, radio, internet, mobile phones, events...
• Every other medium is a replacement in time• A different approach is needed...
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Rules of the games
Magazines Internet Sites
brands users
audience traffic
target groups target interests
reports per month stats per hour
distribution is key one click away
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questions