Digital Media Strategies 2013 - Full Report from TheMediaBriefing

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Digital Media Strategies 2013: Paywalls, advertising,
mobile and marketing

Insight and intelligence from TheMediaBriefing’s Digital Media Strategies conference,
February 19 & 20 2013.

© Briefing Media 2013 TheMediaBriefing.com

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Editor’s note

Welcome to the collection of TheMediaBriefing’s coverage from Digital Media Strategies 2013. We wanted to
put all our coverage in one place as a research aid and memento for what was a great event.

Since 2006, while I’ve been chronicling the troubles besetting big and small publishers for various trade
press outlets, despite some slightly misguided optimism, the mood has been mostly bleak.

This was reflected in many industry conferences, where the mood alternated between printbased publishers
arguing all was not lost and others explaining if things didn’t change quickly... it would be.

But the conversation has moved on. Our Digital Media Strategies 2013 showcased scores of case studies
and examples of publishers building new revenue streams and exuding confidence about their future. What
was once a theoretical opportunity such as tablets and mobile is now delivering real revenue. People do
pay for content. Advertisers are increasing digital spend.

TheMediaBriefing was founded in 2010 to showcase the best ideas and strategies for revenue growth and
reaching profitability; the question we’re always trying to answer is: “How can professional publishers stay
relevant, sustainable and profitable for next 10 years?”

That, I feel, is what this event was about. Thanks again to all the speakers, delegates and sponsors who
made it happen.

Patrick Smith
Editor and chief analyst
TheMediaBriefing.com

p.s. If you’d like more insight on the global media industry, sign up for our weekly newsletters at
TheMediaBriefing.com/newsletters.


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About TheMediaBriefing
TheMediaBriefing started as a publishing experiment in 2010. Founders Neil Thackray and Rory Brown
wanted to build a new usercentric business media company that combined curated articles with indepth
opinion, analysis and personality.

We set out to use semantic technology to intelligently thread content together and provide a deeper
meaning to topics, companies and key personalities in a very specific niche the media industry itself.

Patrick Smith joined the company from day one as our lead analyst. We now send out nearly 50,000
individually requested emails each month covering the major strategic issues in Newspapers; B2B Media;
Magazines; Mobile; Broadcast: Digital Media and Media Finance. These newsletters are read by key
opinion leaders around the globe.

As TheMediaBriefing has grown over the years we have hosted a range of influential strategy events in
London. Each has in some way set the agenda for the industry and allowed teams to network and share
ideas with their peer group. TheMediaBriefing is also the organiser of The British Media Awards held in April
each year. A gala event to showcase innovation and excellence across all sectors of the UK's dynamic
media business.

This event is perhaps the greatest embodiment of our community. We aim to appeal to all parts of the media
industry from large multinational publishing empires to small digital startups experimenting at the bleeding
edge and creating new business models. Our industry is in the midst of disruption but opportunities abound
and TheMediaBriefing looks forward to being your guide to that brave new world.

If you don't already get our free newsletters you can sign up to be part of TheMediaBriefing community here:
www.TheMediaBriefing.com/newsletters.

We have a new version of the site coming soon and are also working on a range of additional 'Briefing' sites
for other industries. You can find out a little more about us corporately at www.BriefingMedia.com.


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1. A digital, datadriven media landscape Mark Read, CEO, WPP
Digital and WPP Strategy Director
By Patrick Smith

Professional publishers have to execute on several fronts to stay relevant and profitable in a
digital world: social media, data management, ecommerce and generating and leveraging a
committed audience. Just in case you thought it was going to be easy...

That's the word from Mark Read, CEO of WPP - also WPP's head of strategy - who opened
our Digital Media Strategies 2013 conference, taking place in London on Tuesday and
Wednesday.

He told the gathered throng of senior media professionals that the global tides of mobile,
digital consumption and device proliferation will leave no one untouched.

"I don't know, for the print publishers in the room, I'm going to cheer you up," he says,
before showing the latest WPP stats on the shrinkage of print from a global adspend
perspective; from 37 percent in 2007 to 18 percent in 2017.


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-- Shift to mobile: But mobile ads are growing right? Yes, but "it will be deflationary in
general," warns Read.

"If you go from pounds to pennies in digital pennies to when it's even tougher."

-- Low cost vs niche publishing: Read draws a distinction between low-cost, mass appeal
sites, the shining example being Mail Online, and more in-depth niche content destinations,
where "not many people can win at this end of the spectrum."

But why, he asks, haven’t magazines - the traditional entertainment publishers in print -
taken on the online entertainment mantel online, as Mail Online has?

"Magazines particularly have passionate readers with narrow interests and I've always been
perplexed why they haven't built stronger presence online. You would have thought they
would - maybe it's the difference in the publishing cycle.

"Why has the Daily Mail built a position as an entertainment site that Hello!, Grazia, any other
supposedly better-qualified publishers could and should have done?"

-- Ecommerce: Be in no doubt - getting this right is crucial. Read points out that
Net-a-Porter now employs more journalists than Harpers Bazaar. "When you look at this are
looking at an ecommerce site or a magazine site?" he asks.

-- Data-driven buying: Forget the jargon around real-time bidding ad exchanges - all you
need to know is that the world's biggest advertising agency holding company wants to add
more efficiency to he ad buying process - and it needs your help.
"We've decided to invest in tech to drive the buying side of the business. Agencies used to
deal with things through faxes and manual process - that's no longer enough. we need to
deal with publishers more directly and I would urge publishers to work with on us on this.

"There are a lot of people there whose job is to take margin out of the process. Our job
is to share that margin back."

2. Douglas McCabe of Enders Analysis on online audience
convergence and ARPU
By Jasper Jackson


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Audience fragmentation has long been associated with the transition to digital - but what if
online actually makes your audience converge?

That's what is happening to newspaper audiences online, according to Enders Analysis COO
Douglas McCabe.

Why? Well, McCabe told TheMediaBriefing's Digital Media Strategies conference in London
today that it's a simple matter of scale.

Newspapers audiences in print have relatively predictable demographics; Sun readers tend to
be younger and less affluent than Telegraph readers. But online, audiences are so large
they cluster around mid-income, young(ish) users.

"All the websites of those news business are competing for the same demographic," says
McCabe. "There is an enormous convergence of audience because reach is so much larger."

That not surprisingly makes user data especially important and McCabe says publishers need
to be much more aware of what data they can collect on their users. They should also be
aware how much of that information is being collected by other companies.
But it also means publishers need to measure the success of their business differently by
taking into account average revenue per user (ARPU) - not just profits and total
revenues.

"Publishing traditionally hasn't focussed on ARPU," says McCabe. "But increasingly in a world
with massive audience potential (and scale), ARPU is something that needs to be understood
and be at the heart of service provision itself."

Earlier in the day, WPP Digital CEO Mark Read told the conference mobile usage would
experience huge growth, but would have a deflationary impact on ad rates. However,
McCabe offered some reasons to be positive for traditional publishers.

"Quite a big proportion of online news consumption is happening on websites built by
newspaper businesses,but on mobile they fare even better and get an even larger
proportion of time."


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"Every mobile has 30-40 apps on its screen. Those are the sites I use all the time, and that
type of behaviour benefits print brands.

"That should mean for traditional publishing business that get their strategy right will be in a
position to monetise mobile effectively."

3. WSJ digital managing editor Raju Narisetti on the intersection
between tech and content
By Jasper Jackson

What should newspaper publishing in the digital age look like ? It's the intersection of
technology and content - with developers embedded in the newsroom and a platform-neutral
subscription strategy.

That's the vision of Raju Narisetti, the head of the Wall Street Journal Digital Network who is
putting this new way of working into practice.

Narisetti told the Digital Media Strategies conference in London on Tuesday, in an in-stage


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interview with TheMediaBriefing editor and chief analyst, that great content is no longer
enough to differentiate the WSJ from competitors like the Times or Telegraph.

"Most big news rooms have focussed on creating great content, and thinking the audience
will come and hopefully they'll pay," says Narisetti.

"But having great content is no longer enough - everybody gets the same news."

"The experience the audience are getting from the content is what will differentiate
us from competition and all experience only come at intersection of content and
tech."

That, says Narisetti means taking on the difficult task of bringing new technology and new
expertise into the newsroom. In his previous role at the Washington Post, Narisetti saw the
editorial staff reduced from 850 to around 600 - but also 100 new roles were created.

"Try putting your newsrooms and tech together it can be a nightmare. You have to embrace
your CIO and CTO."

"I'm a big advocate of embedding developers in the newsroom."
Narisetti shared some stats on how the WSJ is moving to a platform-neutral approach to its
subscribers.

-- Print vs Online: The Wall Street Journal has 2.3 million readers in print, but a whopping
60 million online.

-- Mobile: "Last month, 32 percent of my traffic came from mobile," says Narisetti A year
ago it was 20 percent and a year from now it will be 50 percent."

-- iPad: WSJ has 130,000 readers who just subscribe to the iPad app.
Though the WSJ has increased print subscriptions - online is where the real growth is.
However, Narisetti says the demarcation between print and online is fading.

"Audiences are blending together. We are starting to take the approach of WSJ everywhere
as the business model - a subscription model where you can acess in any way."

Narisetti says the device that currently makes up the largest proportion of WSJ's traffic is
the smartphone - which is the platform providing the fastest growth - especially from Android
handsets.

4. Gated access: The headaches of customer service, technology
and tax


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By Jasper Jackson

Persuading people to pay for content is the biggest challenge you face if you're putting up a
paywall, right?

Well, for most publishers that's only the start. As the panel on gated access models told the
Digital Media Strategies conference in London, customer service, technology platforms
and even tax can cause you just as many headaches.

Customer Service
Phil Clark, digital and audience director at UBM Built Environment, says digital access
massively increases the complexity of actually delivering content to your audience.
"Customer service fulfilment, whether it is around existing subs base or through to new
customers coming in is the biggest hurdle," says Clark.

"It's an area we didn't consider enough - when you are sending out print you have some
occasional issues, but our fulfilment provider Dovetail services say 90 percent of their
complaints are about online access."

Nat Knight, group publishing director at Incisive Media's Risk Management division, adds:
"People say our search function doesn't work in 2.5 seconds or whatever - they have these
expectations of a website (to be like Google or Amazon.
"If Google starts providing exactly what we provide then we'll have a problem."

Technology
For Knight, finding and implementing the right technology to operate a gated access model is
an equally tough challenge.

"I never thought I would have so many dull meetings about tech," says Knight.
"If you work with a good team, you don't have to integrate entirely as a publisher. But you
need to work very closely with them, that's the biggest issue with any digital product."

Bronwen Auret, general manager for South African business publisher BDFM, says that while
someone with the resources of the Financial Times might be able to develop their own tech


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platforms, smaller publishers have to work with partners to keep up.

"When you are a traditional business, to innovate quickly is quite difficult. I have a developer
team of four, and a building full of very clever traditional people but what we have tried to do
is partner with people who are better."

Tax
Another major challenge - one which applies to any paid for digital content - is VAT. While
print media is exempt from VAT in the UK - digital products are subject to the full 20 percent
rate.

The problem becomes particularly challenging when bundling together print and digital
access - often requiring publishers to assign an arbitrary value to digital which a subscriber
is rarely aware of.

"There's no set rule on tax," points out Clark. "The way we've done it is to account for a
digital price, so we've split a subscription into a certain amount being print, and a certain
amount digital. Overall you end up paying approximately six to eight percent on the digital
and print bundle."

For Knight the calculation is easier, as Risk splits the nominal valuation of its digital and print
subscriptions 50-50. However, that isn't something the publisher discusses with its
customers, and it leaves a huge degree of uncertainty about the legal status of the
arrangement.

He says: "We never talk about VAT when we talk about pricing. We shouldn't be setting what
the tax levels are. I'm sure the government would like us to do it more in their favour."

"I'm sure the government would like us to do more in their favour."

5. The Economist: Unbundling and global expansion
By Jasper Jackson


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How do you get your customers to pay more and be happy about it? The answer could be as
simple as offering them a wider range of products to choose from.

That's the approach that is working for The Economist - which last year persuaded half its
US subscribers to pay 25 percent more for a digital and print bundle.

Nick Blunden, The Economist's global digital publisher told the Digital Media Strategies
Conference in London that the key had been unbundling its subscription package, which
previously had only offered either digital only or the print magazine combined with digital
access.

Blunden says: "We now have three options - print, digital and bundle. That may not seem like
a huge change, but it has given us greater flexibility and given us opp to highlight value of
each.

"It reflects the fact people are very comfortable paying more for bundle. Previously the price
for both digital and print was $127. Now print-only is $127 dollars, digital-only is $127 and
the bundle is $160 dollars. That's a 25 percent increase.

"The mix is now that 25 percent pay for digital only, 25 percent pay for print only, and 50
percent pay for the bundle.

"In a world where we are all struggling to monetise our content, that's had a significant
impact."
Blunden says the Economist is looking at expanding the range of different formats the
Economist offers - including potentially making the audio versions of its articles which are
currently free to subscribers part of the bundle.

Global Expansion
Though The Economist only comes in an English language version, Blunden says China and
India are the fourth and fifth largest sources of traffic to The Economist online, and they sell
more digital editions in Asia-Pacific than they do in EMEA.

He says there are no plans to produce The Economist in any language other than English or
produce regional editions. However, localised sales efforts have been vital to its success
outside Europe and the US.

"The regional structure of the commercial side has been critical," he says. "Localised pricing,
marketing and social media has been critical to generating user demand.

"Trying to be a global business without having feet on the ground is almost
impossible."


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6. Evening Standard MD: Circulationchasing newspapers have
been 'in denial'
By Patrick Smith

Newspapers have been "in denial" as they tried tricks and gimmicks to increase or maintain
their circulation, and are guilty of pressing the "digital panic button" according to the man in
charge of the London Evening Standard and Independent newspapers.

Speaking at our Digital Media Strategies 2013 conference in London on Wednesday, Andrew
Mullins, MD of Independent Print Ltd, the holding company owned by Alexander Lebedev, said
that newspapers have been run like loss-making football clubs.

"You had editorial who were creating products not for consumers but for themselves and
were measuring success by ABC audited numbers," he said.

"When you have a business driven by this topline number, you get low price content and
promotions, as most newspapers companies were. They were in denial - putting copies into
airlines and hotels and protecting that top line figure."

Mullins isn't himself in denial about the advance of digital media, but he's a realist: "Ultimately
we will go digital and it will be quality digital but how do you get there?'"

Standard reinvention
Mullins explained how the Standard went from losing £12 million in 2006-7 to losing as much
as £26 million before going free in 2011.

"Instead of pushing the digital button we thought: 'newspapers - is there a future for it?'

The answer, of course, was to go free: "When we looked at the Standard we thought we
had a unique opp which is the commute home. We thought if we can get this right maybe we
can stop people going over to digital."

And the results are staggering:

-- Average daily distribution has risen from 260,000 a day as a paid-for title to 700,000 as a
freebie (ABC).

-- Total readership is up from 490,000 to 1.6 million (NRS)

-- Costs are way down: from 9,000 newspaper stands and outlets across the capital to just
300. Instead of three editions a day - immortalised in the Cockney street-cry of "final!" -
there is now just one.


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-- And from a huge loss to the first profit in 12 years.

At the same time, the paper knew it needed to change its perception. Anyone Googling
Evening Standard a few years ago, Mullins says, would have found sandwich board headlines
mentioning death, cancer, bombs, terrorism and crime.

"A big part of the solution was to change that... It was making people ashamed and not
proud of the city they lived in. They had had a hard day at work, they didn't want disaster."

The Independent and i
From 1996 to 2011 the story of the Indie was one of decline. With a short reprieve from
going tabloid, and from ubiquitous covermount giveaways, which Mullins calls "desperate
attempts to keep circulation alive".

"You can't get to profitability by cutting costs," he says. "You have to have growth.
Promotions don't work... all the bulks and foreign (distribution) was hiding the truth that you
were in decline.

As for the i, people were buying quality newspapers but not buying them, Mullins says. They
were long, verbose even, and were a result was products that journalists wanted to see but
readers weren't so sure.

As Mullins puts it: "Don't let editors decide what the product is, why not create something
that readers want?"

In the i all articles apart from a handful of opinion and feature pieces are 350 words in length.
And the best bit from a media business point of view? The i needs six editorial positions to
function - most of whom reformat content from The Independent.

The result? A combined cross-sell proposition across Independent and i of 340,000 purchases
a day - the highest circulation the Independent brand(s) has enjoyed since 1996.

Mullins's talk was full of little common-sense actions that were for some reason out of reach
of previous generations of publishers, such as publishing in foreign territories.

Online questions
"In truth, if your business model is based on banners and buttons ... are you really going to
make money? Are you going to be profitable?" asks Mullins, with a refreshing break from the
common orthodoxy on online advertising.

"We have not spent millions on our digital stuff, we've improved our website... but we haven't
lost any money ever on it," he says.

And what of London Live, the forthcoming local TV service provided by the Standard's parent
company from early 2014? Mullins says the service will have cumulative losses of £15 million
and will take four years to recoup that investment.


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Putting it mildly, Mullins says "local TV is not a huge money spinner - anyone who put in their
bid they were going to make lots of money probably lost their bid."

But making the TV station part of a wider media empire, that might have a chance.

7. IPC head of subscription marketing on the stairway to data
heaven
By Jasper Jackson

Digital has made selling subscriptions a lot more complex, but it's also provided many more
marketing tools that can help publishers gain new subscribers and upsell to existing ones.

That was the focus of a presentation by IPC Media head of subscription marketing Beatriz
Montoya at Digital Media Strategies in London. Her advice? Be obsessed with data and use
all the marketing channels at your command.

Stairway to data heaven
IPC reaches a total of 26 million UK adults, and has 900,000 subscribers
Montoya describes how IPC ranks potential and existing customers by how much opportunity
there is to market to them - something she calls the "stairway to data heaven".

-- Coldest prospects: These are people who may visit an IPC site, but don't leave any
information. IPC may know they have visited, but they don't even have an email address to
contact them on. That means they need to....

-- Engage them: The first step for IPC is to get an email address. that's mainly done by
persuading them to sign up to newsletters or offering competitions. However, Beatriz says
IPC may start requiring users to provide an email address to read certain content.
then they can begin marketing to turn them into an...

-- Entry level: This is the process of getting someone to take out their first subscription.
That's done through email and social media marketing, but also traditional marketing in print
and mail. But the marketing process doesn't stop there...

-- Super users: Obviously the process doesn't stop there. Once users have one subscription
they have shown a willingness to pay for IPC content and provided data that can be used to
tailor marketing messages. "We are obsessed with getting more and more money from our
customers," says Montoya.

Testing
Key to the whole approach is testing what works and what doesn't - and that has become a


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lot easier with the wealth of data available from online activity.

As an example, she describes how IPC tested a new subscription purchasing page which
prioritised the buy button - a call to action - compared to its existing page which displayed
more prominently a description of the publication and what benefits subscribing would bring.

The raw results showed the existing page performing more effectively. But when they delved
deeper into the data, they found the new page was actually more effective at driving
sales from existing customers and people visiting from IPC sites, while the traditional
page was better at selling to consumers who were less familiar with what was on sale.

Montoya says that sort of analytical approach is increasingly important at IPC and across the
media industry.

"Teams within IPC are changing," she says. "We are starting to hire a lot more analysts
and our marketers have to be analytical. The creative stuff is not as important.

"We have new roles merging technical people and an understand of marketing. Having that
hybrid role sitting between tech and marketing is essential."

8. Is online advertising broken? Panel discussion weighs the
adtech questions
By Jasper Jackson

Is online advertising broken? For publishers the answer is yes - the shift to online with its
low CPMs, the shift to mobile and its lower mobile CPMs and the widespread adoption
of programmatic buying, are all making it riskier for publishers to rely on and survive on an
ad funded model.

But according to the panel on advertising at our Digital Media Strategies conference in
London those changes are opening opportunities - they're just difficult to take advantage of.

Online: Value shift
Don Amboyer, Europe managing director at adtech firm Operative, describes the suggestion
from Google's Nikesh Arora that half of all advertising will be online in 2018 as "terrifying" for
online publishers.


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He says that while traditional broadcasters will rack up delivery costs of around five percent
of a campaign's value, costs can reach 30 percent online.

Fabien Magalon, managing director of French media co-operative La Place Media, says there
is a "value transfer from publisher to advertiser" involved in ads moving online, but
described it as a challenge rather than a threat.

He says: "When you create your own content you have the opportunity to create tons of
value from quality data. Publishers need to find ways to extract new value from their unique
proposition which is content."

Duncan Tickell, commercial director at Immediate Media, says for publishers who don't
measure their impressions in the billions the opportunity lies at the premium end of the ad
market.

"There is a commoditised space at the bottom, and there's a space in the middle where we
have traditionally operated with banner ads," he says. "But at the top end there is an
opportunity which requires deeper integration."

"It's about saying where can you make the most impact. I do think publishers have it within
their control, but they need to think how you can respond to a clients' complex commercial
problems with integrated editorial, design and all the parts of your business. You have to
invest in the infrastructure to respond when opportunities come up."

Mobile: Publishers and advertisers lag audience
Tickell says no one has got to grips with mobile effectively yet: "There's an awful lot of
desktop inventory sold on mobile. The industry is behind users. we've got these terribly low
CPMs for mobile specific - almost to the point of being meaningless. It's up to us to come up
with some creative solutions."

Noel Penzer, MD of Huffington Post Media Company in the UK, says publishers need to catch
up with where users are.

"We are increasingly looking to put mobile and tablet at the heart," he says. "We've got to
make it simple for ourselves - whether it be ad formats. It's not an extension, it is the
audience."

Programmatic: Not all upside
The panel had quite differing views on programmatic buying and it's similar-but-not-the-same
partner real-time bidding (RTB). Magalon says programmatic should cut out the friction in
delivering online campaigns - potentially reducing the added cost of delivering them.

"It will reduce significantly the cost - on indirect cost RTB is just so brilliant," says Magalon.
"It's also driving significant value to advertisers so theoretically it should drive value for
publishers. It is also a great feed for driving audience data and better results for advertisers
and ultimately publishers."


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However, Tickell warned that programmatic could also drive up costs: "If the publishers are
having to manage the yield, the costs associated with the planning is suddenly going to
publishers. But it is the way the market is moving and you need to have a strategy in place."

9. Dennis Publishing and New Scientist on evolving consumer
publishing

Last year PwC heralded what it described as "the end of the digital beginning" for media
companies. The challenge for most is no longer making the leap to digital - it's about
developing and fine tuning digital products to build a successful business.

That quote was repeated by Google's Madhav Chinnappa at Digital Media Strategies in
London, where delegates also got to hear two real-life examples of successful digital
publishing operations that are still evolving.

The New Scientist
John MacFarlane, publisher of Reed Business Information-owned The New Scientist shared
some key stats from the publication's digital operation.

-- Digital subscribers: The New Scientist has 10,000 paying digital subscribers through the
Zinio platform. It also has 100,000 people signed up to its Google Currents feed.

-- Print vs Digital: MacFarlane says around 10 percent of The New Scientist's
subscribers pay for the most costly print and digital bundle. Globally 25 percent take the
digital-only subscription, but that figure falls to 18 percent in the UK.

MacFarlane describes The New Scientist's approach to pricing as "aggressive", but constantly
evolving: "The real expense still resides in content creation, digital costs are not far off print.

"You can't give your content away for free and expect your business to survive.
Experimentation has given us confidence to take a premium priced product to market."

The Week

Alex Watson, head of app development at Dennis Publishing, explained to the audience that
while Dennis' The Week app has been a success (recognisedat the PPA awards), it is still
dwarfed by its print counterpart.

-- Editions: 1 million issues of The Week have been downloaded to date, but that pales in
comparison to the 11 million copies Dennis prints each year.

-- Ad revenue: Digital accounts for 20 percent of The Week's ad revenue - around half of


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which comes from the app.

The Week app for Google's Nexus 7 was launched three weeks ago, and only accounted for 1
percent of sessions over the last 30 days. However, Watson says Dennis is looking at how to
promote the app on Google tablets.

A service, not an artifact
Of course, putting out an app on many platforms takes a lot of work, but Watson says there
are a few things you can do to make the process easier including making your editorial team
work with templates, and scrapping InDesign-based production which leaves you having
to redesign each page for a different screen size.

Watson says those changes are part of a wider ethos at Dennis: "Don't focus on what you
want to produce, think about what a product does.

"The Week is a service, not an artifact," he says. "You don't have a favourite bit of water as
it comes out of the tap."

10. ZEIT ONLINE MD on building an online business out of a weekly
print brand
By Jasper Jackson

Dragging a print focussed business into the digital world is difficult in the best of
circumstances - but it's even harder when you've been slow out of the blocks. That's the
problem German weekly Die Zeit faced - but one it is overcoming through major investment
and innovative thinking.

Christian Röpke, managing director of Die Zeit's digital arm ZEIT ONLINE, described the
process to TheMediaBriefing editor and chief analyst Patrick Smith at the Digital Media
Strategies conference.

Röpke says: "The newspaper was doing well, we've even increased subscribers and there was
a feeling of we don't have to change anything.

"Then four years ago we decided to invest but because we had neglected online, it meant
we really had to invest heavily and we are still paying that off."

"The business plan says they will be profitable in two years, we are making eight digit
revenue on digital and in terms of revenue we already make up about 18-19 percent of whole
company."

-- Classifieds: "Others were leaving classifieds to online only businesses like Monster," says
Röpke. "We decided to build a digital classifieds business with our own sales and platform. We


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target niche markets because we see groups like doctors visit us. When you add up these
niche markets they make up quite a big market."

-- University courses: ZEIT realised it had a large audience of potential students and
decided to take advantage of that fact, coupled with Germany's Excellence initiative, to
create database of all 16,500 university courses in the country.

"We then made money by offering them the chance to upgrade their listing for €3,000," says
Röpke. "That may not seem much, but with 16,500 courses, the market is worth €50m. If I
get 10 percent of that I'd be happy."

-- Ebooks: Röpke says: "Someone from our business development unit said lets generate an
ePub out of the newspaper. I thought who would buy it? Now we have as many ePub
downloads as apps.Innovation needs to be driven by every single employee and you need to
give people the room to innovate."

"But once we try an idea out and see they work, you need to work on them to make them
sustainable."


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