What’s their secret?

Business models for successful webpublications:10 Dutch cases

Erik Stevens, Phaff & PartnersAntoine van den Berg, Next Level

Tools of Change. February 11th 2008 1© phaff & partners / next level

What can you expect?

Content of Presentation:

• Introduction• The basic model• Findings of the research• Elaboration of the value proposition• Questions

Tools of Change. February 11th 2008 © phaff & partners / next level 2

Our Background

Phaff & Partners:- Operates mainly in The Netherlands (Europe…)- Specialized in the Publishing & Printing Industry- Consultancy topics:

- Strategic planning of companies- Marketing & Sales development- Organizational development- Empowerment

Next Level:- is a strategic partner and specialized in online

publishing and online marketing

Tools of Change. February 11th 2008 © phaff & partners / next level 3

Why this study?

Research was commissioned by The Netherlands Press Fund:

• Advisory board for the Dutch Government• Main goal: stimulate press diversity in The

Netherlands (democratic necessity)

Main reasons for commissioning study:• Publishers losing ground in information

dissemination • Turnover goes down: less paying readers, smaller

volumes of advertisements• Webpublishing: ‘strategic investment’… (sic)

Tools of Change. February 11th 2008 © phaff & partners / next level 4

Focus

Main questions:

What are successful business models for publishers active on the internet?

What are key elements of these models which explain this success?

Success is defined as:Generating turnoverPositive resultIndirect positive effect on brand and image

Tools of Change. February 11th 2008 © phaff & partners / next level 5

10 cases studied

Newspapers Electronic Publishers Special Interest (print)

-Wegener.nl (regional newspapers)

-Telegraaf.nl (largest national newspaper)

-Surined.nl (first Surinam paper)

-Cobouw.nl (for construction & building industry)

-MarketingFacts.nl (e-marketing professionals)

-Documentwereld.nl (professionals in corporate document production)

-VI.nl (soccer, soccer & soccer)

- Bright.nl (techno lifestyle)

-Zoom.nl (semi-pro fotography)

Tools of Change. February 11th 2008 © phaff & partners / next level 6

THE BASIC MODEL

Tools of Change. February 11th 2008 7© phaff & partners / next level

Tools of Change. February 11th 2008 © phaff & partners / next level 8

Analytical Framework: Alex Osterwalder’s model

CoreCapacities

Partner Network

Value Configuration

Value Proposition

Cost Structure

CustomerRelationship

DistributionChannel

CustomerSegment

RevenuStreams

RESEARCH FINDINGS

Tools of Change. February 11th 2008 9© phaff & partners / next level

Value proposition (WYSIWIG)

A successful webpublication creates a THEMATIC publishing SPACE with content for a well defined target group

Content is freeThe site has it’s own editorial format (even within a crossmedia setting): FOCUS & SIMPLICITYActuality (daily news) and interactivity are key elementsGrowing importance of multimedia (‘simple’ film productions)Emotional bond (passion) is strong and explicitSite tries to appeal to curiosity of target group …and tries to establish habitual behavior (e.g. daily check as you start up your computer)

Tools of Change. February 11th 2008 © phaff & partners / next level 10

Tools of Change. February 11th 2008 © phaff & partners / next level 11

CoreCapacities

Partner Network

Value Configuration

Value Proposition

Cost Structure

CustomerRelationship

DistributionChannel

CustomerSegment

RevenuStreams

Value Proposition

AuthorityAuthenticity

Editorial FormulaCommunity Space

StakeholdersBrandTheme

Value configuration

Webpublishing is more complex than ‘traditional’ print.

Traditional content production proces:

Tools of Change. February 11th 2008 © phaff & partners / next level 12

Furthermore: more or less strict separation of content and commerce (ads)

Value configuration

Web value creation: a ‘democratic’, simultaneous and continuous production of content by several stakeholders/community members

Tools of Change. February 11th 2008 © phaff & partners / next level 13

Tools of Change. February 11th 2008 © phaff & partners / next level 14

CoreCapacities

Partner Network

Value Configuration

Value Proposition

Cost Structure

CustomerRelationship

DistributionChannel

CustomerSegment

RevenuStreams

Value Configuration

Decentralised managedFuzzy

ContinuousSimultaneous

Prosuming

Partner Network

Technical partners:• Hosting• Open source application developers (CMS)

Commercial partners:• Google (AdSense): +/- (a ‘quick buck’ versus

‘depersonisation’ and ‘losing contact’)• In online specialised Ad Acquisition companies

Tools of Change. February 11th 2008 © phaff & partners / next level 15

Tools of Change. February 11th 2008 © phaff & partners / next level 16

CoreCapacities

Partner Network

Value Configuration

Value Proposition

Cost Structure

CustomerRelationship

DistributionChannel

CustomerSegment

RevenuStreams

Partner network

TechnologyOpen Source

Experts / BloggersUsers

Core Capacities

Management discipline:• Technology savvy: basic ICT knowledge• Giving room to experimentation• Sharp guarding of cost (low cost solutions,

barters, etc.)Editorial discipline:• Editor-in-chief = community manager (weighing

the interests of the different stakeholders)• Editor is multiskilled:

text writingfilm and photo shooting“live” presenting and interviewingEditing and sampling

Tools of Change. February 11th 2008 © phaff & partners / next level 17

Core Capacities

Commercial discipline:• Dedicated sales (even within crossmedia settings)• Skilled in detecting needs of (potential)

commercial parties:Reach (mass) for branding Interactivity (contact, communication, profiles)Direct sales

• Skilled in negotiating alternative paying models (CPM versus No Cure No Pay models)

Tools of Change. February 11th 2008 © phaff & partners / next level 18

Tools of Change. February 11th 2008 © phaff & partners / next level 19

CoreCapacities

Partner Network

Value Configuration

Value Proposition

Cost Structure

CustomerRelationship

DistributionChannel

CustomerSegment

RevenuStreams

Core Capacities

Multi taskingPassion

Technology SavvyCommunity management

ExperimentationalOnline marketing knowhow

Knowledgable about getting traffic, interactivity and online selling

Cost structure

• Small scale of operation, 5-6 people average• Strong focus on controlling costs to keep them

lowBartering for contentMultiple skills of employees lowers production costsMeans are low cost (‘open source’)Marketing costs are low, online marketing and viral effects are being used

Tools of Change. February 11th 2008 © phaff & partners / next level 20

Tools of Change. February 11th 2008 © phaff & partners / next level 21

CoreCapacities

Partner Network

Value Configuration

Value Proposition

Cost Structure

CustomerRelationship

DistributionChannel

CustomerSegment

RevenuStreams

Cost structure

Low cost operationsFlexible

Small scale

Customer Relationship

• Stakeholders: blogger, editor, publishers, commercial partners (ads and content)

• Web analytics leads to relevance• Commitment shows through comments• Ads are another type of content

Tools of Change. February 11th 2008 © phaff & partners / next level 22

Tools of Change. February 11th 2008 © phaff & partners / next level 23

CoreCapacities

Partner Network

Value Configuration

Value Proposition

Cost Structure

CustomerRelationship

DistributionChannel

CustomerSegment

RevenuStreams

Customer Relationship

InteractiveCo-creation

Management of interest

Distribution Channels

• Marketing and deliveryWebsiteRSSE-mailSearchSocial bookmarkingMobile internetOffline media

Tools of Change. February 11th 2008 © phaff & partners / next level 24

Tools of Change. February 11th 2008 © phaff & partners / next level 25

Analytical Framework: Alex Osterwalder’s model

CoreCapacities

Partner Network

Value Configuration

Value Proposition

Cost Structure

CustomerRelationship

DistributionChannel

CustomerSegment

RevenuStreams

Distribution Channels

Multi channelAlways everywhere

Customer choicePush and Pull

Customer Segment

• Again: stakeholdersProfessionals/special interest: readersCommercial partners, theme oriented: suppliersProfessional with theme knowledge: content suppliersEditorsChief-editor / community manager: manages and balances interests of all stakeholdersPublisher: supplies and exploits the platform

• Theme is based on strong vision / branding and on PASSION

Tools of Change. February 11th 2008 © phaff & partners / next level 26

Tools of Change. February 11th 2008 © phaff & partners / next level 27

Analytical Framework: Alex Osterwalder’s model

CoreCapacities

Partner Network

Value Configuration

Value Proposition

Cost Structure

CustomerRelationship

DistributionChannel

CustomerSegment

RevenuStreams

Customer Segment

StakeholdersProsumers

Passion

Revenue Streams

• Ads (90%, cpm, cpc)

• Subscriptions (fixed / variable / combination)

• Commision on transactions (webshop)

• Spin-offs

Annual reviews in print (‘yearbook’)

Conferences, seminars

Training, courses, workshops

Tools of Change. February 11th 2008 © phaff & partners / next level 28

Tools of Change. February 11th 2008 © phaff & partners / next level 29

Analytical Framework: Alex Osterwalder’s model

CoreCapacities

Partner Network

Value Configuration

Value Proposition

Cost Structure

CustomerRelationship

DistributionChannel

CustomerSegment

RevenuStreams

Revenu Streams

Ads (cpm)Subscriptions

Transaction Commisions(CPL/CPS)Spin-offs (cross media & brandbuilding)

Tools of Change. February 11th 2008 © phaff & partners / next level 30

Analytical Framework: Alex Osterwalder’s model

CoreCapacities

Partner Network

Value Configuration

Value Proposition

Cost Structure

CustomerRelationship

DistributionChannel

CustomerSegment

RevenuStreams

VALUE PROPOSITION ELABORATED

Tools of Change. February 11th 2008 31© phaff & partners / next level

Value proposition elaborated

Value = Effect * Reach

Tools of Change. February 11th 2008 © phaff & partners / next level 32

Effect – Reach matrix

Tools of Change. February 11th 2008 © phaff & partners / next level 33

BrandingCommunication

CPM

High rewardsContent

suppliers pay

SUBSCRIPTIONS

No proposition (yet)

START / EXIT

Transactional targets

CPL/CPA/CTR

Effect

Reach

L

L

H

H

Effect – Reach matrix

Tools of Change. February 11th 2008 © phaff & partners / next level 34

General interestNon-theme

Involvement:interaction

Special interest:Thematic spin-offs

Effect

Reach

L

L

H

H

Authority

Authority &Authenticity

Effect – Reach matrix

Tools of Change. February 11th 2008 © phaff & partners / next level 35

General interestNon-theme

Involvement:interaction

Special interest:Thematic spin-offs

Effect

Reach

L

L

H

H

Add user generated content and blogging

Offer options for content from

comm

ercial stakeholders

Closing remarks:

• General interest sites (in combination with editorial independance/authority) have less possibilities for creating a commercial publication space

• Quality of information as asset for branding (print)titles: marketing versus commercial succes

• Do themes fit with your brand and within your cross-media publishing strategy?

<Naam project / klant> <datum> 36

Questions and Remarks?

Tools of Change. February 11th 2008 37© phaff & partners / next level