How VG see their business modell in the future, and how and where they expect to earn money? - Rune Danielsen
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How VG see their business modell in the future, and how and where they expect to earn money? - Rune Danielsen
- 2. How VG see their business modell in the future, and how and where they expect to earn money? Rune Danielsen Commercial Director at VG
- 3. VG is a Media House A content provider across platforms
- 4. Biggest VG is the Nr. 1 newspaper in Norway, and we are nr. 1 online. We’re much bigger than our competitors
- 5. VG ‐ Readership 30,1% Kilde: Forbruker & Media.
- 6. Newspaper and online 51% • I 2007 VG had 1.191.000 print 33,2% readers, and 30,1% 1.316.000 online readers. • VGs Total daily readership (off and/or online) is 2.015.000 persons. Kilde: Forbruker & Media. Daglig antall tusen lesere
- 7. Total Daily Reach • NRK cover 75% of total populaBon every day. (TV, Radio, Online) Fom 2.Q 2008 inneholder NRK også yr.no. • TV 2 reach 60% • VG reach 52% of poulaBon on a daily basis Fom 1.Q 2008 inneholder VG også Nettby. • Dagbladet at 32% • AOenposten reach 29% Prosent Fom 1.Q 2008 inneholder TV 2 Gruppen ikke Kanal24, Kilde: Forbruker & Media. 2Q 2008. www.tns-gallup.no/medier Nettavisen og Side2.no.
- 8. Daily reach in age group 12 – 19 years Fom 1.Q 2008 inneholder TV 2 Gruppen ikke Kanal24, Nettavisen og Side2.no Fom 1.Q 2008 inneholder VG også Nettby. Fom 2.Q 2008 inneholder NRK også yr.no. % Kilde: Forbruker & Media. 2Q 2008. www.tns-gallup.no/medier
- 9. Daily reach in age group 20 – 39 years Fom 1.Q 2008 inneholder TV 2 Gruppen ikke Kanal24, Nettavisen og Side2.no Fom 1.Q 2008 inneholder VG også Nettby. Fom 2.Q 2008 inneholder NRK også yr.no. % Kilde: Forbruker & Media. 2Q 2008. www.tns-gallup.no/medier
- 10. 1994 - CIRCULATION: 386 137 Advertising revenue: Readership: 1 381 000 239 MILL NOK Profit: 218.5 MILL
- 11. 2002 - CIRCULATION : 390 510 Advertising revenue : Readership : 1 571 000 370 MILL NOK Profit: 270.3 MILL
- 12. 2007 - CIRCULATION : 309 610 Advertising revenue : Readership : 2 015 000 672 MILL NOK Profit: 365 MILL
- 14. Our Vision
- 15. Our Goal – Strong growth the next five years
- 18. VG Buyers Heavy Buyers Medium Buyers disappears Heavy buyers is geWng older
- 19. Problem number 2 ‐ circulaXon numbers ”De Streife?”
- 20. The Crucial QuesXon for the Newspaper • HOW TO SUSTAIN PROFIT IN A SHRINKING MARKET? FRONT END: PRODUCT INNOVATION BACK END : IMPROVED PRODUCTION EFFICIENCY
- 21. The Pillars for Newspaper Sale PRICE PROMOTION PLACE PRODUCT The classical 4 Ps of P. Kotler
- 22. The Pillars for Newspaper Sale PRICE PROMOTION PLACE PRODUCT Estimated increased profit: 48 MILL 14
- 23. New IniXaXves to sell more at higher price to core readers PRICE PROMOTION PLACE PRODUCT Specific themes, occasions or season
- 24. PRICE PRODUCT THE PRICE EQUATION 1990: 6.60 7.00 1997: 9.00 8.00 2007: 14.30 10.00 Source: McKinsey internal report VG
- 25. Consumption of Coca Cola
- 26. Reach new target Groups (Women) Problem – Other segments grow more
- 27. Reach the healty segment
- 28. Increase in revenue and profit An activ product- and price policy enabled Coca Cola to grow revenue despite the fact that ”The Real Thing”, their main product decrease
- 29. VGs sale at Statoil PRICE Effect of Price and Innovation for VG PRODUCT +28% *Revenue per Month
- 30. PROMOTION MarkeXng and Trade • VGs Branding has been amongst the most succesful adverXsing in Norway for the last 20 years and from our Sales Modelling we see that it sXll is profitable • Our Pay off is ”The day will not be the same” (witout VG). This is sXll relevant for our total offer as a Media House and for VG online, but it is a big quesXon wether this sXll is the case for the newspaper. • More and more people experience that the day is good enough witout buying the newspaper • I will not go deeper into this now, but we’re adapXng the markeXng concept to make it more relevant for the newspaper and we’re also trying to develop a becer markeXng concept for retail adverXsing as well as for our addiXonal products
- 31. PLACE Space Management • VG is one of the top 10 FMCG products in Norway • Our problem is that it’s a single product, and it’s based on commision sale – so there’s not many incenXves for the retailers to give our product acenXon • And Retailers ”only” care about growth
- 32. PLACE Space Management • We have the best place in the shop – at the cash desk, and we need to defend that place... • But we also need to expose our products at several places within the shop. • This is in parXcular the case for our addiXonal products. • To achieve this we have to adapt our retail busines model from the exisXng flat commission model, towards a model that’s more growt / volume oriented.
- 33. PLACE Space Management • I don’t know about any other adverXser that puts more money into ads for the product without exposing it in the shop (we hide our addiXonal products within the newspaper) • We can let some of our new products be availible more than one day, and we can give them their own exposure ‐ next to the newspaper • We consider changing the business model by giving the buyers an opXon with differensiated prices • A stronger focus on Space will force us to change our business model towards retailers.
- 34. PLACE New Sales Channels • VGs problem is not the prize of the product. It’s peoples Xme • We need to look for new situaXons were people have an extra minute, and we need to be able to put the product in front of them, there and then • At the moment we have appr. 12.000 places were we sell the product • In the summer and on sundays we increase this to 15.000 (door sale, boat sale, etc). • We constantly need to be looking for new places to sell / distribute the newspaper
- 35. Revenues from 2007 to 2012 • If we manage to work well with all of the 4 Ps, we believe it’s possible to keep circulaXon appr. on a 2008 level unXl 2012 • That will give us a golden opportunity to grow adverXsing revenue on print alone with 25% from 2008 ‐ 2012 • Best case ‐ Total revenue will be appr. 2.200 mill • If not, we sXll have to grow revenue, but it has to be in a mix between product prize and adverXsing growth, due to more and more paper to heavy users • It will be allmost impossible to reach our target for the Media House, if newspaper circulaXon ”collapse”. So the issue regarding circulaXon is our number one priority
- 36. Newspaper Busines Models International Newsmedia Marketing Association, R. Picard
- 37. VGs future Busines Model (on longer term) VG International Newsmedia Marketing Association, R. Picard
- 38. THE CRUCIAL QUESTION FOR VG ONLINE • HOW TO KEEP THE POSITION AND SECURE CONTINUED GROWTH? NEW PORTFOLIO INITIATIVES
- 39. IN POLE POSITION – WEEKLY USER SESSIONS
- 41. NEWS Prefered place to be updated for Norwegians 15 - 29 Source: SOON-project by Synovate jan 07
- 42. VGs product porBfolio Høy within the BCG matrix Sesam Nettby VG TV VG Nett VG Mobil Vektklubb Markedsvekst Møteplassen Dine Penger VG Helg VG 7 VG papiravis Matbilag Bilbilag Lav Høy Lav Markedsandel Size of circel indikates revenue
- 43. AN AMBITION TO BREED A LEADING NICHE PRODUCT YEARLY 2005 2006 2007 A NEW PRODUCT IDEA 2008 OPERATED IN SEPARATE COMPANY WILL BE LAUNCHED IN NOVEMBER
- 44. Nettby – Social Network Service The fastest growing ”city” in Norway More than 750.000 members since launch last year 70% coverage of all Norwegian teenagers
- 45. VG Vertical Cross Media content Cross Media Sale
- 46. VG ‐ Cross Media Sale Cross Media Team Established Strenghten focus on ”VG idéas” Started 1. januar 2008 Two customers (Orkla og Landbruket) VGTV + VG print Common team, one from online and one from print Tailormade ad concepts uXlizing Number of contacts increased from all VG plaqorms 25 to 130 persons! X‐media sucsesscases executed 125 % over budget aper six months Sale compared to last year for the two customers = 9,6 mill (+ 67 %) New cartoon + new ad space Neaby + VG print
- 47. We also provide Multi-Media respons administrasjon Order by mobil tlf. Order online Order with SMS Partner in logistics export of customer information
- 48. Summary • We aim to maintain revenue from circulaXon in the periode 2008 – 2012, and to grow adverXsing revenue from print due to growth in product volume • Price and InnovaXon is our soluXon • We will not change our business model totally , but we will adapt it and it will be much more adverXsing dependent • Online innovaXons will be launched every year and they will be totally adverXsing driven • We integrate some editorial departments across plaqorms and we integrate adverXsing sales towards the biggest adverXsers
- 49. THE 9X THEORY • The average person will underweight the prospecXve benefits of a replacement by about a factor of three • and overweight by the same factor everything they're being asked to give up John T. Gourville (John is a Havard professor in MarkeXng with a special focus on price and product innovaXon, and we strongly belive in his message)
- 51. INMA 36th European Conference Next: Horst Pirker