Better value propositions across all media

In 2014, Sanoma Media Netherlands rationalised its portfolio, launched 17 projects to increase top and bottom line growth, invested heavily in TV and integrated the Sanoma and SBS offerings more closely. New value propositions that combine TV, digital, print and events across four powerful domains, will help us to monetise growing interest from consumers and advertisers.

When Peter de Mönnink became CEO of Sanoma Media Netherlands in January 2014, the decision to rationalise the company’s portfolio had already been made. De Mönnink accelerated the divestment process and by August, 15 titles had been sold and around 500 FTEs had left the company. "We now have a stronger cost base and are in a better position to grow the key brands that remain. What’s more, the divestment process was done with integrity and openness, allowing us to safeguard the commitment of our people,"  De Mönnink says.

"We see an opportunity to create new cross-media formats that build on the strong positions that these brands have already secured in entertainment and beauty"

Four glossy titles originally slated for divestment were retained and transferred to the buildings of SBS Broadcasting, where a link with TV makes sense. "We see an opportunity to create new cross-media formats that build on the strong positions that these brands have already secured in entertainment and beauty." Sanoma Media Belgium was also under strategic review, but after careful consideration Sanoma decided to merge the Belgian and Dutch operations. "This combination will generate the greatest strategic and financial value in both markets, enhancing Sanoma’s overall strategic position."

To speed up the return to organic growth, De Mönnink also launched 17 projects designed to impact the top and bottom lines. These are known as Big Oak projects and they include efforts to improve pricing strategies, strengthen internal communications and enhance cross-media marketing. "Our efforts to combine TV, digital, print and events in order to drive the top-line growth of our brands has worked well. Revenues are no longer declining and we expect growth in 2015."


Underlining this result is the strengthening relationship between Sanoma and SBS Broadcasting, which owns TV channels Net5, SBS6, Veronica, and newcomer SBS9, as well as some digital assets. Back in 2011, Sanoma and minority shareholder Talpa purchased SBS, and all parties are co-operating to channel the cross-media power of the Sanoma-SBS combination. A joint marketing and media solutions department was set up as a one-stop-shop for large advertisers, and Sanoma and SBS are working with large advertising agencies to develop new value propositions. In a clear demonstration of this closer alignment, De Mönnink also became CEO of SBS in September.

Sanoma and SBS are also moving away from managing individual brands and towards growing market-driven domains. By combining their portfolios, the two companies occupy the number one position in the home deco, automotive, kids and teens, and women domains. With more than €200 million in revenues and a large percentage of EBITDA, women is the largest domain. The cross-media position reaches 5.8 million 18+ women, out of a total of 6.6 million in the Netherlands.

"We are building value propositions that link digital, TV, print and events across the domains, we appointed a Domain Director Women in 2014 and we did the same for the other domains in early 2015,"  De Mönnink explains. We are also testing the water to see if entertainment would be viable as a fifth domain. A decision will be made in 2015.

The power of TV

vtwonen, a brand from the home deco domain, illustrates the potential of this domain strategy. Originally a website and a magazine only, vtwonen is now expanding into a true multi-channel brand. SB Commerce, an online home deco retailer, was acquired, – a platform with 20,000 home deco products from over 140 brands - was relaunched. A TV format was also launched on early prime time Sunday.

vtwonen illustrates the potential of this domain strategy

The new formula really took off. Circulation of the magazine increased, the online retail shop boosted revenues, site traffic went up and viewer share increased. Overall, this had a positive effect on the brand’s revenues. In 2015, vtwonen will return to TV with even more episodes and, De Mönnink says, sponsors are already lining up.

"Sport is a game changer, as 38 of the country’s 40 most watched programmes relate to sports"

Another sign of the blossoming relationship between Sanoma and SBS is the acquisition of the TV and online rights for the Champions League for the period 2015-2018. SBS will broadcast a selection of the 134 matches that are to be played over 34 nights in each season, and, which boasts an average reach of 2.7 million unique visitors per day, will offer match highlights.
De Mönnink is very enthusiastic about this opportunity.
 "Sport is a game changer, as 38 of the country’s 40 most watched programmes relate to sports. We are now working with sponsors to create value propositions in preparation for the start of the football season in August."

And as if all this were not enough, SBS also launched a fourth TV channel called SBS9 in January 2015. Its relatively simple format of a movie every night at 20:30 and a top series is beating all expectations, according to De Mönnink. In addition, the video-on-demand platform KIJK was revamped, and clocked up close to 100 million stream starts in 2014. KIJK provides access to all SBS content and the team is currently studying whether to monetise it through advertisements or subscriptions.

Year of oppurtunties

In 2015, De Mönnink wants to deliver on top and bottom line results by growing Sanoma Media Netherlands’ premium brands and adding TV and video-on-demand wherever possible. Marketing spend is stable and consumer confidence seems to be improving, so provided the Eurozone remains undisturbed by a Grexit or some similar upset, "2015 will be a year of opportunities. We will continue to work on our Big Oak projects and our domain strategy, and also to cooperate closely with media agencies to build new propositions for advertisers."

Video will take a front seat in 2015. Video on demand and multi-channel networks, which would enable free-to-air TV to evolve into different models, are interesting markets. Sanoma is also laying the groundwork for Hybrid Broadcast Broadband TV, which combines TV with internet services. "HBB TV will take another two years to go mainstream, but we have begun experiments with a media agency to get the learning in so that we are ready when it takes off." HBB TV also hints at the increasing value of data. De Mönnink foresees that Gross Rating Points, the main KPI for TV, will soon become GRP + data, and over time that will become data + GRP. "Data will eventually become the predominant element in the value proposition for advertisers."  For this reason, 2015 will also be the year of big data, as Sanoma and SBS try to turn sales data into better value propositions. "We are well on the way to enabling a single sign-in for all Sanoma and SBS channels, which could become the glue between all our assets," De Mönnink concludes.