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:

1. 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.
2. 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.

Martha Stone (left), Jose Antonio Ferris, and Matthew Buckland

“Treat your reader not as a king, but as an emperor – give him whatever he wants, wherever he wants it and at any time he might need it” – advised one of the speakers of the WAN’s World Digital Publishing Conference: Digital Revenue Gold Mine in Amsterdam in October 15-16, 2008. Jose Antonio Ferris, the head of strategy of Prisacom, Spain, Matthew Buckland, the General Manager for publishing and social media in Media24.com / Media 24 / Naspers in South Africa, and Martha Stone, the Director of Shaping the Future of the Newspapers project in the World Association of Newspapers explained how their companies have monetized citizen journalism, cross media advertising, Web TV and mobile channels.

Case study of Prisacom

Jose Antonio Ferris

Prisa group is the leader in the spanish speaking countries, it has global brands in 22 countries, and a 50 million people daily audience (readers, listeners, viewers, internet users). Prisacom is responsible for developing online products, brands and services. It reaches almost 2.000.000 unique users per day.

The main areas in which Prisacom exists are news & information (“EL Pais”), classifieds, entertainment and education (Prisacom has lately started with an innovative product Kalipedia, an encyclopedia for the Spanish secondary school students – 80% of the traffic came outside of Spain, from other Latin America countries).

Prisacom, thanks to its digital activity doubled its revenue in 4 years (from 17,5 million Euros in 2004 to 38,2 million Euros in 2008). The revenues came for Prisacom mostly from: advertising (56,5%), mobile services (17,1%), and eBusiness (23,4%).

What Prisacom mostly does is:

• Looking for strategic alliances with search engines. Some of their space is sold to Google. Under articles Google advertisements are published, and the company is actually making money of it.
• Developing vertical content. The company produces web pages, mostly vertical ones, which can get revenues from contextual advertising.
• Existing in the classifieds sector. Mr Ferris admits that the battle in that sector is lost already. Market is dominated by pure internet players. Media companies have arrived too late on that market. Media companies may catch up with those pure internet players by following 2 paths:
• Alliances with online leaders in traditional classifieds segments: real estate, employment and auto.
• Acquisitions and development of online niche-classified products.

By enhancing the multimedia products, Prisacom offers now products both for advertisers who look for broad or narrwowed audience (niche). Multimedia is crucial for the company, as they already display ads for a 24 million plus audience per month.

Another example of digital strategy by Prisacom is monetization by sponsorship. They reached an agreement with a ministry of traffic in Spain which produces social ads, but Prisacom makes them well visible. It is an innovation that called by Mr. Ferris as “user generated advertisement lifted to the 3rd power”.

The company is full of fresh ideas. It plans to bring innovations in ad formats, as well as look deep into possible development and commercialization of leads, databases, behavioral targetting and others. Cross platform sales (printed el-pais, website and mobile) is also very important for Prisacom – “Treat your reader not as a king, but as an emperor – give him whatever he wants, wherever he wants it and at any time he might need it” – said Jose Antonio Ferris.

Being smart with citizen journalism

Matthew Buckland

Naspers is a part of Media24.com and exists in the Internet, PayTV, Print and Technology sectors. It is 5th in page rank in South Africa. The business model of the company is based on three key stones: publishing, mobile, and social networking – it is all about attracting the audience. South Africa as a country is specific – it has the most expensive access to the Internet in the world, but in terms of mobile Internet, it is on the contrary.

Matthew Buckland spoke about Thought Leader as an example of innovative digital approach to gain audience. It is a platform for journalists, columnists, and bloggers to share their thoughts and opinions. As the speaker said, it is a blog hybrid: editorial blog, with closed and intelligent user generated content. All submissions to the platform are edited (even the comments). The contributors are not paid, they all create content for passion and peer recognition. Thought Leader managed to collect almost 6,3 million readers’ words, and almost 2,6 million contributor words.

There are 4 key principles the speaker gave the listeners:

1. Don’t abandon gatekeeping (wikipedia does not either). It is not about any content, medias are confused about blogs and comments on their pages.

2. “Not all readers are equal” – elevate expert users and selected members of the community should be elevated. Again, it is not about the money – it is prestige and peer recognition that play the most important role.

3. Media is about quality, and media companies should always keep this in minds.

4. Partnership. Media can do more by making readers a part of publishing process. They should be flexible about copyrights. Share ad revenue and and traffic with contributors.

Matthew Buckland finished with a statement that it is not the citizen journalism that has failed, it is the media implementation of it that was improper.

Naspers experiments with new revenue models, as traditional advertising was not enough. Mr. Buckland suggest trying a shared-revenue blog sponsorship (shared 50-50 to the blogger). Also “Bloggertorials” are considered as blogs for companies and CEO’s, as another way to get advertising message across the platform.

Learning from competitors.

Martha Stone gave an overview of WAN’s research that only underlines what previous speakers said. WAN recently studied a body they called GYM (Google, Yahoo, and Microsoft). What WAN learned is:

1. GYM wants to steal newspapers’ best assets:

• content
• relationship with advertisers

2. Newspaper business can no longer be a one product business – it is all about the long term strategy

3. GYM has excellent enabling technology.

The key potential areas in digital revenue making according to WAN, are:

1. Online / mobile advertising. Till 2012 key digital will be channels: search engines, online displays, and online videos as the channel with the biggest potential. There are new pricing models emerging: advertiser demand accountability – cost per click, and cost per action. The examples of prices that different newspapers charge for one-day display ad on their websites are:

• Aftonbladet.se (Swedish daily) – 30.000 Euros
• VG.no (Norwegian daily) – 35.000 Euros
• WSJ.com (Wall Street Journal) – 25.000 US Dollars
• NYTimes.com (New York Times) – 30.000 US Dollars

More and more accountability is also demanded for print. And mobile advertising will become a real business in few years.

2. Video advertising. News is now the most popular online video content in the US, news is also the main products that newspapers sell. Why not use that information?

3. User generated content.

Martha Stone finished her presentation with a simple model: the better the site is, the more traffic it receives. Next to be seen is the increased effect of ads, and therefore – increased revenue.

Caroline Little

Caroline Little is a  a former CEO of Washingtonpost.newsweek Interactive (US) and now serves as the special adviser at Guardian News & Media (UK).

She gave her keynote speech on monetizing digital amid marketplace challenges at the 3rd World Digital Publishing Conference, organised in Amsterdam on October 15-16 by the World Association of Newspapers.

”We now live in the best times for journalism – people have never been so much interested in news, and the web has no boundaries”, said Ms. Little.

She added that it is important for newsmedia companies to change their core products according to the changing audience (and that does not mean putting more information on Britney Spears).

The readers do not need news from yesterday, and that is what they get mostly from printed newspapers. The next day they want the context and analysis of a described event. Newsrooms have to change how they gather and how they distribute the news. And this is the main change of the core product.

As Ms. Little said, the publishers should think about the assets and how to use them in the best way. If their audience is getting the similar content from somewhere else, the advertisers may in the future search for those media which have better reach.  What to do with it? Sell your products on different platforms. Advertisers nowadays need different platforms to advertise their products and services. The newsmedia companies should keep one foot rooted in the core journalism product (print newspaper), and one in the new emerging market (new platforms).

Mrs. Little gave advice on 4 top ways to make online projects more profitable:

• Multimedia storytelling (video, audio, blogs, etc.). The question is what is the best way to tell a story. Just because publishers have all the tools does not mean they have to use them all at once. Sometimes picture speak louder than words, sometimes the words are not enough. And just for comparison, as Caroline Little said, a cost preparation and running video on TV costs about 300.000 US dollars – on the other site, the cost of preparing and running video on the net is about 140 US dollars.
• Database journalism. Databases are useful to the readers (searchable lists: for example – numbers of death toll in Iraq, local crime, sports recruiting numbers). When such tools are repeated in a smart way, they will attract the readers so they not only read the news but keep returning.
• Readers’ engagement. Working with readers is not easy, quite often the angrier they are, the more active on the website they can become. But instead of asking a reader hwether he is loyal or not, it is enough to check his posts and comments. Readers are not only consumers but could be resources as well (commenting and giving ideas to the reporters at the same time). Washingtonpost.com for example in every article publishes links to blogs that talk about it. Even though some blogs are critical, this linking proves the transparency of the newspaper.
• Distribution. Publishers should use the oportunity – it is now possible to reach the reader anytime. Everybody knows how hard it is to invite a reader the site. Getting him back is even harder, so it is neccessary to throw as many fishing lines as possible (publishing on various platforms).

Caroline Little said there is a long way ahead before declaring the victory. When digital revenues sum up to 20% of the entire revenues of the newsmedia company, it is already a good achievement. But all publishers should be aware that this shift towards the internet will continue, and the percentage of digital revenues will grow.

So far, it is critical to understand the digital audience: how they come in, what they read, what kind of content they look at, how much time they spent on the site, and in what direction they are leaving the site. Understanding the audience will help giving them the product they are expecting.

Mr. Haagerup spoke about change in media companies at the INMA Outlook 2009: European conference in Vienna in October 1-3, 2008. Before joining the television and radio company, he edited Nordjyske, a local newspaper in Aalborg in Denmark and the best selling Danish nation-wide daily Jyllands-Posten.

Nordjyske has often been lauded as “the most futuristic newspaper in the world.” The company founded in the 18th century at the beginning of this millennium was facing a crisis. Revenue was falling, staff morale was low.

“What did Darwin really say?,” asked Ulrik Haagerup his staff at Nordjyske in 2002 and repeated the same question to the INMA audience in 2008. As Mr. Haagerup predicted, people always answered: “The strongest survive”. “No,” he corrected. ” Darwin actually said that those with the ability to adapt to change in their environment would survive”.

Nordjyske started a restructuring in 2002 that entailed launching new services like 24-hour local news channel, a website, a radio station and a mobile news service and teaching editorial and advertising sales staff to work across all media.

For example: they no longer have newspaper reporters or radio reporters. They just have reporters who create stories for all media. (However, not all stories are created for all media, as they have different strengths: TV is rather for emotions, and the net is searchable and can provide deeper information).

The transformation is believed to be very successful. Between 2002 and 2006, revenues of Nordjyske Medier rose from about $54 million to about $100 million. In 2000 the newspaper generated 62% of company’s revenue and in 2007 this share dropped to 46% (they predict that in 2015 it will go down to 25%). People from all over the world come to Aarlborg for tours and training sessions and they even pay a couple of thousands dollars per visit.

An interview with Ulrik Haagerup

(Here is a short and edited version of this interview made by Artur Karda, multimedia reporter at Media Regionalne, Polish part of Mecom Group.)

Artur Karda: What is the hardest thing to transform a newspaper into a multi-media house?

Ulrik Haagerup: To tell people that they have to change and why. Habits are extremally powerful. So people have to understand why and have to go through the change process and try to make mistakes and dare to be a failer which you always are when you start something new.

Does you believe that all newspaper reporters can become good TV or radio journalists?

No, not all of them, but 90 per cent of them can. It is not difficult. Don’t make it a rocket science.

What is the next step that newsmedia companies have to make after changing its one-medium focused organisation into a multi-media house?

The next step is to recognize that there is a paradigm shift. We have lost a monopoly to tell stories to people. Now everybody can do it and we have to make sure that all these people who come up with videos, sound, blogs, will be involved with our news factory in order to make that content available to people.

More information about Nordjyske transformation and its organisation

• Read Ulrik Haagerup’s article for Nieman Report: Media convergence: “Just do it.”
• Read Newspaper Association of America and American Society of Newspaper Editors‘ case study written by Katherine Goldstein and Paul Berger: Growing audience: innovation in action (in PDF).
• Read an analysis by Dietmar Schantin of IFRA Newsplex about “Organisational types of newsrooms in a media convergent environment“

A former Daily Telegraph and Evening Standard editor Max Hastings delivered a lecture at the City University in London that was reported by the Press Gazette.

He said he was concerned journalists were not being given time to do this job properly in modern newspaper set-ups:

“Many reporters are now required to deliver news to readers and viewers through multiple outlets – podcasts, blogging, TV soundbites. Yet their proper role is surely to gather information and translate it into publishable prose…

They should be trawling Britain, lunching and dining. One of the most important parts of doing our job is simply to hang around. Ignorant proprietors dismiss this as sloth…

Yet talking, listening, watching are our lifeblood…

If newspaper reporters and, worse still, specialist writers are instead chained to a 24-hour, seven-day treadmill, servicing their organisation’s customers by land sea and air, or rather by print and blog and broadcast, devoting hours of each day to technical delivery functions, it seems as if they were being required to cook dinner in a restaurant’s kitchens, then hasten out in waiter’s aprons to serve it at table.

Hastings who edited the Telegraph for 11 years from 1985 and then the Evening Standard for five, recalled:

“When I became an editor and set about interviewing job candidates, I was chiefly interested in discovering whether they possessed that fanatical craving for a career in print which is much more important than brains. Newspapers need a quota of normal, balanced human beings; but a larger number of definitely unbalanced people, who believe that getting the story is the most important thing in the world. At 23, my own prose was pretty dire. I sought to compensate with a manic commitment to producing splashes.”

Hastings condemned also many of the current crop of national newspaper owners for seeming to hate journalists.

“They want the power and influence which possession of a newspaper confers, the access to political leaders and sense of owning a private rifle range, while regarding their journalists as mere trained circus animals who should jump hoops to order…

They fail to understand that in the media, as everywhere else in life, mutual respect is indispensable between those who pay the bills and those who deliver the goods.”

Praising the Daily Mail-owning Rothermeres as the “most enlightened owners I have ever worked for”, he said: “They believe in journalism. They invest generously in their titles. They give editors extraordinary latitude.”

“The Rothermeres like journalists. Rather than make or break governments, or pursue self-aggrandisement, they simply want to own successful titles. As an industry, we would be in much better shape if there were more like them…

The proprietors and managements which lack regard for journalists and bound to fail. It is bewildering that so many people aspire to own newspapers, while despising those who produce them.”