INTERNATIONAL

A Publisher’s Internet Strategy

Bert Wiggers

Director New Media

Sanoma Magazines International

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