Speed, agility and quickly changing course when needed

It has been an important and eventful first year for Sanoma Digital. The newly formed business unit is part of a matrix organisation, together with Sanoma Media Netherlands and Sanoma Media Finland, which oversees the pure-play digital businesses and their development, spearheading the digital transformation of Sanoma.


"The other roles for Sanoma Digital are to work closely with the country organisations on cross-media opportunities and in key areas such as mobile, video, and Big Data," says CEO Arthur Hoffman. "Additionally, the Sanoma Lab and our venture arm are part of Sanoma Digital, and both of these are very important company-wide innovation initiatives."

Hoffman joined Sanoma in August 2014 and brings 16 years of digital experience to the company. He is confident about the steps taken so far and sees great opportunities ahead. "The first steps were to introduce more focus into our portfolio of activities and make important decisions on where we want to position ourselves and place our bets. This included divesting some of the underperforming businesses which had lost relevance over the previous few years. At the same time, we doubled down our focus on developing and improving our most promising brands. The market is evolving very fast. Speed and the agility to respond and change course where needed are crucial in our transformative journey."

Digital portfolio highlights


Fashionchick saw strong revenue growth in its Dutch home market. NU.nl has further strengthened its leading market position as the largest Dutch news brand, with almost three million unique visitors daily and approximately one billion page views each month. NU.nl is also expanding into regional news.

Finnish classifieds site Oikotie.fi, which focuses on recruitment and real estate, price comparison site Kieskeurig.nl, and car classifieds platform Autotie.fi were overhauled to provide a better user experience and generate more value for consumers and advertisers. In addition, Sanoma Digital extended programmatic sales to mobile and began to offer video content on its mobile and digital platforms.

Sanoma Digital also increased the revenue and reach of its search assets in 2014. Sanoma Search, which offers curated search results, increased its market reach from 2% to 6% by integrating its search functionality into other Sanoma Digital sites. This led to a 73% increase in Startpagina Search revenues compared to 2013.

Sharing deep expertise

Sanoma Digital was not established only to grow Sanoma’s pure-play digital portfolio, but also to work closely with Sanoma Media Finland and Sanoma Media Netherlands. "Our assets form a substantial part of their portfolio, and we support their growth with our deep expertise in areas like paid search, profiling, targeting, user interfaces and LEAN methodology. This will allow offline brands to transition more quickly to a digital environment without needing to reinvent the wheel," says Hoffman. With data sometimes referred to as the new black gold, one of Sanoma Digital's achievements in 2014 was to secure a native big data capability. This will allow Sanoma to turn the vast amounts of data it accumulates across users, content, devices and brands into insights of practical value. "Our big data team is now at full strength. They have begun to support the entire group with better profiling of consumers, better targeting for advertisers and more up-selling and cross-selling capabilities," Hoffman enthuses.

"Our big data team is now at full strength. They have begun to support the entire group with better profiling of consumers, better targeting for advertisers and more up-selling and cross-selling capabilities"

Sanoma Lab

Sanoma takes the need for innovation very seriously, and realises that rapid changes in technology, business models and consumer expectations are driving a constant demand for investment in the latest ideas and business models, both internally and externally. The Sanoma Lab is one of the ways in which Sanoma is catalysing its own innovations. The lab is an internal incubator that can test the business potential of an idea quickly – even within a matter of weeks. One of the Lab’s successful concepts is Swipe & Shop, which allows users to take a picture of the clothes someone is wearing, and ask the community where these can be purchased. The Sanoma Lab is also Sanoma’s LEAN expert centre. The Lab has trained 1,400 people across the company in the LEAN development method and helped them embed this into their new business development efforts. Sanoma Ventures is investing in external start-up companies, mainly in the Netherlands and Finland, just as venture capitalists do. "To date we have invested in 15 promising tech start-ups, which represent the beginnings of a sizable and attractive new revenue base. In return for capital, media coverage and our expertise, we take an equity stake and support their growth journey. This can take many different forms, from rapid international expansion to very close coordination with Sanoma’s businesses in its core markets. Sanoma Ventures has invested in a very broad range of start-ups, including Peerby (a social sharing platform that is now being launched in the US), Locals United (an e-commerce platform for local fashion stores), and Scoupy (offering discount coupons). The video-on-demand portal WappZapp was recently closed down, but its two founders now work for Sanoma."

Goals for 2015

Sanoma Digital will continue along the path it set out in 2014. Hoffman sees many opportunities ahead, but is also aware that international digital giants like Facebook, Google, Twitter and Netflix create disruptive forces in the media industry and will inevitably lead some of the global trends. "While these players have massive reach and are good at targeting, we can differentiate ourselves by providing a relevant context with quality content. We offer unique cross-media target-ability across our leading digital, TV, and offline media brands."

For Sanoma, mobile will be a key theme in 2015. "Currently, smartphone and tablet media consumption account for 60% of our traffic but their revenue share is still lagging behind. Like many other companies, our challenge is to close this gap by delivering an even better customer experience, adopting the latest thinking on products, and tapping into new forms of monetisation such as video, native advertising and m-commerce."


Video will be a second key theme in 2015. TV-on-demand services Ruutu.fi in Finland and KIJK in the Netherlands, which was revamped in 2014, are already successful in long-format video. Hoffman argues that short-format video, used frequently on news sites and increasingly by any digital business, are becoming more and more popular. "We are looking to make a big push in this area,"  Hoffman says. "Sanoma has acquired the rights to the Champions League in 2014 and we will complement SBS’s TV offering with short video clips on sites like NU.nl, including match recaps and interviews with players."

Execution

Beyond mobile and video, Sanoma Digital will deploy its big data and analytics expertise more deeply within the organisation and take Sanoma Ventures and the Sanoma Lab to the next level. "We will expand our activities, learn from our successes and failures and be more focused on our goals,"  Hoffman states. "We will also need to leverage our leadership skills and ensure that we attract and retain the right capabilities. As a result, Sanoma Digital will build itself a winning workforce ready to face and overcome new challenges swiftly. Agility and technological capability are the keys to innovation and growth for us." "Ultimately," Hoffman summarises, "it all comes down to execution. Ideas are good, but what really makes the difference is focus, speed, quick decision-making, evaluating what is happening, learning fast and having the courage to take risks."

"Ideas are good, but what really makes the difference is focus, speed, quick decision-making, evaluating what is happening, learning fast and having the courage to take risks"