Where did Norwegian success of VG come from?
October 17, 2008 by marek.miller
Verdens Gang (VG) is, like most other newspapers in the world, in its circulation meltdown. But despite the circulation drop, the profits of VG are on the rise.
Torry Pederson
Torry Pedersen, CEO, Verdens Gang (VG), Norway spoke during the third session of WAN’s Readership Conference in Amsterdam in October 16-17, 2008 about how the enormously successful newspaper company, Verdens Gang, integrates print and digital to gain new audiences and new revenues.
VG started online in 1995. In 2007 – the print circulation went down 80.000, profit increased 365 million Norwegian Krowns. Web presence was expanded, by creating a social network, adding new supplements over the weekend, and producing new products, like magazine for private financials. The strategy of VG was to diversify the product. The researches however show that only the readers above 50 years old read print newspaper more than online information. In other age groups it is online news that are more popular.
VG is the biggest commercial media for the target group at the age 20-29 (VG has even bigger reach than TV), reaching 60% of the country in that age group every day.
In order to sustain profit in the shrinking market, VG is proud of its twofold strategy:
- on the front end it is the product diversification,
- on the backend it is improved production efficiency.
While the number of print product employees is dropping, for online the same numer is raising. VG certainly sees its future in online. VG’s model is something they call a separated integration (or an integrated separation). Online newsroom and the paper newsroom are on the same floor in one building, but still they are two different newsroms, which produce two different products.
Price, marketing, distribution, and product are the four pillars for VG’s newspaper sale. VG mostly worked with marketing and distribution but still took into consideration the other two pillars. For instance VG found out that the the magazine is the main reason for buying paper product on Saturday (mostly women and young people confirmed that information). It is the supplement that is important to readers, therefore VG concentrated on product diversification as well. Its weekly supplement strategy allows also the issue marketing, which is a very big problem in the case of dailies (it is easier to advertise a product printed on Tuesday to be inserted on Saturday, than to do it everyday with all VG’s editions). TV is the main channel for VG’s marketing strategy (60% of the marketing spendings), as more than 70% readers prove to be mostly affected by this channel of marketing.
Distribution of VG is based on the single copy sales only, most sales go through grocery stores, supermarkets and petrol station. The drop in sales of printed VG is partially to be blamed on the reduction of 150 points of sales due to the concentration of the supermarket chains in Norway. VG does not forget about the prime position in front of the cashier, and on Sundays it sells its papers on doors.
VG does not forget about good journalism, it treats it as the most important factor in the paper, and online. The market is changing and people follow well prepared news. And VG’s plan is no more to be the best read newspaper in the country – it wants to be the leading news outlet in Norway. So far so good – VG is way ahead of its competitors with 3 milion unique users and 335 million page views weekly.
Despite the fact, as Torry Pedersen said, VG’s home page is “the ugliest in the world”, 90% of all users come from the front page. It reaches 5 million page impressions daily, and between 1,5 – 2 million click throughs on editorial content. The commercials are sold in all models possible – by impressions, by day, by week, by click-throughs, etc.
VG notices the following two elementary differences between online and print product:
- There is no deadline online but the content has to be published continously. A good example from VG is the fact, that the story about the block of flats crunching in one of the cities of Norway was followed by 28 articles with 113 updates on the story before the printed product hit the streets.
- Space and time - what is wonderful about online product is its speed and depth. Online product should be like a chinese box. If someone wants headline only, give him the headline. If someone wants to read a story, let him read a story. But if there is a information freak out there – give him something he can read for entire week.
VG tries to launch one leading niche product every year:
- in 2005 vektklubb.no was launched
- in 2006 e24 was launched
- in 2007 nettby.no was launched
- in 2008 new product to be launched in november
Video should also very important for every newspaper, as it can generate the traffic on the website. VG came once with putting a camera in the local Zoo, where a lion was expecting lion babies. The video stream had enormous number of visits, while the readers were invited to propose the names for the baby lions.
Thanks to the strategy, the first 6 months this year they were able to grow their advertising profit by 68%. Here is the VG’s look upon the industry:
- the market is facing enormous challenges,
- newsmedia companies have to understand the readers better
- be relevant to readers or die
- new business models must be found, it is notonly the editorial question
- many and big changes are required, not only one
- we can handle the turmoil. But we have to do it ourselves.
Tagged: conference, Marketing, multi-media, strategy, WAN
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[...] Where did Norwegian success of VG come from? | forum4editors – Minor market domination sounds like a convincing explanation to that question but here's their mission statement: "VG’s plan is no more to be the best read newspaper in the country – it wants to be the leading news outlet in Norway. So far so good – VG is way ahead of its competitors with 3 milion unique users and 335 million page views weekly." [...]
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