The Online Market

Gruppo Editoriale L’Espresso: Online Positioning and Digital Strategy
Milano – April 22, 2013
Head of Internet Division – Pierpaolo Cervi
Investor Relations Manager – Stefano Canu
Disclaimer
»
This document has been prepared by Espresso Group for information purpose only and is to be
used for presentation of the Group’s results and strategies.
»
For further details on Espresso Group, reference should be made to publicly available
information, including the Annual Report, the Semi-Annual Report and Quarterly Reports.
»
Statements contained in this document, particularly those regarding any potential or future
performance of Espresso Group, are to be regarded as forecasts and as such may involve some
uncertainties.
»
Any reference to past performance of Espresso Group shall not be taken as an indication of
future performance.
»
This document does not constitute an offer or invitation to purchase or subscribe any share and
no part of it shall form the basis of or be relied upon in connection with any contract or
commitment whatsoever.
2
Index
» The Online Market
» The Digital Division
» The Digital Strategy
3
The online advertising market in Italy and in Europe
Italy - online advertising market (1)
Benchmarking - online advertising market (1)
€m
€m
In 4 years
market X2
Of which
Display (2)
37%
2012, including
search expected
up 5-6%
32%
• The online advertising industry in Italy has experienced
a strong growth with online adv as % of total market up
from 7% to 15%
• Display ads is our main reference market
(1) Source: IAB Europe report 2011 and 2007
(2) Source: FCP Internet
Online adv.
on total
adv. market
15%
21%
21%
36%
The online advertising market in Italy (including search
and classified) is still underdeveloped compared to
Continental Europe (Total Europe average is 22%)
4
The online advertising market in Italy: Our reference market and market
share (advertising and usage)
Italy – Online Advertising Display Market (1)
Italy – Online Advertising Video Display Market (1)
2010 = Index 100
€m
~10%
Market share
~14%
Market share
~17%
Italy – Online Usage Key assets (2)
Italy – Online Reach Traditional Newspaper (2)
• 12° online property in Italy, among the top 4
excluding the global international players
• Usage growth +7% in 2012
• Higher reach than traditional newspapers and TV
• “Real time news” positioning
• Strong in social network activities
• Well balanced direct vs. indirect traffic
• Leadership in the video market in terms of usage
(1) Source FCP Internet
(2) Source: Audiweb December 2012
5
The digital subscriptions market in Italy: Our reference market and
market share
Gruppo Espresso - Tablet Active Subscribers (1)
Others
As of December 2012
Local
La Repubblica
Not
including
20K
mobile
# of
iPad/Tablets (2)
Penetration on
iPad/Tablets
~1M
~3.2%
~2.8M
~2.2%
• The high penetration on iPad / Tablet devices of
la Repubblica readers accounts for the fact that
most early adopters are likely to be newspaper
readers. However such penetration will
decrease as tablets/smartphones become massmarket devices.
• New actions expected in 2013 to promote digital
subscriptions:
1. Launch of L’Edicola Italiana (digital newsstand)
a consortium of six media groups (L’Espresso,
Rcs Mediagroup Caltagirone Editore, Il Sole 24
Ore, La Stampa and Mondadori)
2. From January, ADS is providing a certified
monthly digital subscription data (like for the
printed version). The rules to certify digital
copies are the following:
• Digital copies are to be the replica of the
printed version (plus additional online
features)
• Price must be at least 30% of the printed
edition
(1) Excluding mobile (2) Internal estimates based on GFK data (640K in 2011 and 2.2M in 2012)
6
Index
» The Online Market
» The Digital Division
» The Digital Strategy
7
Digital division: Snapshot
• Mission: the Digital Division has the responsibility to manage all Group’s digital
businesses, to fully exploit the brands’ huge potential on all media platforms
and to develop new exclusively digital activities
• Established in 2009 with full responsibility on online strategy across all media
(newspaper, magazines, radio..)
• About 170 staff (of which 75 journalists)
• First 24H coverage online-news service
• Fully integrated system in the new 4-screen world (TV, desktop/laptop, tablet
and mobile)
Head of
Division
P. CERVI
Repubblica
Free
Premium
Real time
&
news
Mobile
TV
Local
Verticals
Free
News
Premium
&
Mobile
Classified
Entertainment
Radio
Movies
Self
&
Publish.
TV
Gaming
&
Services
Manzoni: A dedicated online-only National sales force
(~30 accounts) plus the Local sales force (>300)
Generalist
Verticals
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Digital division: 2012 results and positioning
Repubblica
CONTRIBUTION TO RESULTS
€m
FY 11
FY 12
Revenues
45,2
52,6
- Advertising
37,8
43,7
7,4
8,9
EBITDA
12,3
14,2
EBIT
12,0
13,8
27,2%
27,0%
- Others
EBITDA Margin
Revenues break down:
• ~ 60 % national, ~ 15% local ~ 25%
other
• ~85% Adv ~ 15% subscriptions &
others
Cost break down (as of % of
revenues):
• ~ 30 % contents, ~ 15% IT platform ~
12% other
• Direct cost allocation approach as % of
print contents is limited
• Rep.it is a product conceived to be fully “digital” with a very limited
contribution (<10%) of printed contents, focusing on “real time” news
and video (from “content to be read” to “content to be seen”)
• Focus on brand extension (i.e. integration between Internet and TV),
vertical strategy (i.e. D lifestyle, Finance, Sport) and partnership (i.e.
Huffpost)
Local
• New restyling with the same look and feel introduce in all the 18
local web sites with strong web traffic growth in 2012
• Leadership in local community news, focusing on real time, video,
sport and user generated community contents
Entertainment
• Broad and diversified entertainment media portfolio with interesting
potentials in revenues other than advertising (i.e. video on demand, self
publishing)
Classified
• Main focus on job,B2B and local
9
Digital division: 2012 results vs market
Jan. – Sept. 12
Market
Oct. – Dec. 12
FY 12
-5.3%
+5.3%
+9.8%
In 2012 (especially in 4Q ’12), thanks to our
positioning, we strongly outperformed the market
as advertisers shifted their budget to stronger
brands and to websites with:
• growing and segmented user base
• high-end video display and innovative formats
• special events
• best customer services (i.e. Manzoni)
Espresso
+19.0%
Source: FCP Internet and internal data
+8.6%
+15.6%
10
Index
» The Online Market
» The Digital Division
» The Digital Strategy
11
La Repubblica: Print vs online positioning
2012: Daily pay circulation
2012: Daily Readers/Browsers
~340K
~3,0M
~1,5M
~45K
(Dic ‘12)
Print (2)
Online(1)
FY ‘12 - Advertising
>25% in
December
100%=~180M€
Online(5)
20%
Within La Repubblica
core asset, the online
business has the best
product positioning
and provides further
earning opportunities
as the number of
online
users/subscribers
grows
Print (4)
Up ~85%
from Dic. ‘11
Online(3)
FY ‘12 – Subscribers revenues
100%=~120M€
Online(3) 5%
Revenues
based on
monthly
average
number of
subscribers
Print (5)
80%
Source: (1) AWDB – Audiweb – Unique Browser; (2) Audipress 2012 / III readers (3) Online Active subscribers (4) Kiosk sales 2012 (5) La Repubblica advertising only
Print (4)
95%
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La Repubblica: International benchmark – Online newspaper and TV
Online Newspaper
In countries like
Germany/
Italy/France/Spain
newspapers have
been the first
entrants in the
“real time news”
online market
High
domestic
reach
TV and broadcaster
In countries like UK
and USA the “real
time news” online
market has been
mainly developed by
the existing TV
broadcasters (with
the exception of
Daily Mail in UK)
Low
domestic
reach
13
La Repubblica.it: International benchmarking – Online newspaper
Thanks to its specific positioning Rep.it has a higher reach in its own country than most of its
international peers
Rep.it is a product conceived to be fully “digital” with a very limited contribution (>10%)
of printed contents, focusing on “real time” news and video (from “content to be read”
to “content to be seen”)
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La Repubblica.it: “Real time news” strategy
Main Actions
Italy – Online Reach vs TV (1)
• Strengthening of the news video production
both in terms of quality and quantity
• Focus on sub-brand strategy (thematic areas):
― Lifestyle and fashion
― Sport
― Business and finance (Bloomberg Agreement)
― Auto
― Technologies
• New advertising formats
Main strategic drivers
•
•
In Italy Rep.it is perceived more as a «real time news» online
site than an «online newspaper» and has a brand awareness
that is higher than the traditional TV news sites.
(1) Source: Audiweb Dicember 2012
Take advantage in the expected integration
between Internet and TV (Repubblica TV is part
of the Digital Division)
Repubblica.it on the PC «real time news» has
a separate positioning than Mobile (freemium
model) and Tablet (pay model)
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La Repubblica.it: Relationship with global player
Social positioning(1)
Traffic (1)
Facebook:
1° newspaper in Italy, with over 1m fans. Repubblica
Blu facebook application has 396K registered users and
and 86k daily interactions
(‘000)
Twitter:
770k Followers
• Steady growth (20% CAGR) in the traffic
overtime
• Well balanced traffic positioning with:
― 61% direct traffic (Repubblica.it home page)
― 24% search engines
― 8% social networks
― 7% other (link, partnership)
Source: Nielsen SiteCensus - Feb 2013
16
La Repubblica.it: “metered pay-wall” options
• The introduction of a “metered pay-wall ” system is an
option that supports in-depth news vs. real-time
contents.
High
1
• Today, less than 10% (vs 100% of NYT) of the La
Repubblica printed contents are available online (i.e.
“real time news” positioning)
Tomorrow
2
Today
Focus on
online-only
contents (i.e.
real time,
video)
• “Soft" metered pay-wall approach is the benchmark
(i.e. NYT introduction in 2011 with 20 free articles a
month, now down to 10 articles)
3
• According to Press+ (provider of pay-wall tools):
50%
10%
“Traffic loss from implementing paid model has ranged
from 0%-20% of page views and 0%-7% of monthly
unique visitors.
100%
% of printed contents available in the
desktop/laptop version
1
Focus on
photos
videos,
everyday
day life,
showbiz
and gossip
No publisher has reported any decline in advertising
revenue. This is because most publishers do not sell all
of their available inventory
2
Focus on
real timenews and
comments
with video
and rich-info
bundled
3
Focus on
politics and
in-depth
contents (i.e.
opinion)
17
La Repubblica.it – Mobile and Tablet application: positioning and
strategy
Mobile
(m-site / App)
Mobile is positioned
as a «freemium»
product (subscription
to fully access all
contents)
Tablet
(App)
Tablet is positioned
as «pay» with
“replica” of the print
version + additional
features)
(1) Dec 2012, (2) Nielsen Site Census mobile
Main data and strategic drivers
(1)
Main Data
• Mobile generating 8.5% of La Repubblica users (1)
• Pay: ~20K subscribers. Automatic renewal approach. Only
~20% buying with iTunes
• Pricing (Avg): iTunes 1Week €1.99 - 1Month €4.49 - 1Year
€44.99;
Strategic drivers
• Testing of a freemium model with subscription to access
newspaper and /or original contents
• 205 premium articles per week included
Combined > 1.6M downloads (+66% YOY)
• >58% Apple, 20% Android, 22% other mobile platforms (BB,
W8, Symbian)
Main Data
• Pay: ~45K subscribers. Automatic renewal approach. Only
~30% buying with Itunes Pricing (Avg): 1Week: €4,49 –
~0.39 euro per day net of
1Month: €19,99 - 1Year: €179,99
VAT and sales cost
• Product: multi access: Tablet Mobile PC including inserts
(i.e. D)
Strategic drivers
• Tablet version mainly a “replica” of the printed version
(maintaining a similar user experience) + additional features
(video, photogallery etc) + Special edition at 7 PM
Bundle strategy
Bundle package
available:
• Repubblica &
Local Newspaper
• Repubblica &
Espresso
• Repubblica &
Espresso &
&Local
Newspaper
• Repubblica &
Tablet device
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La Repubblica.it: Verticals - Restyling D (lifestyle and fashion vertical)
Wedding
Horoscope
Cooking
Health
2012:
165K Unique
users (+24%)
Jan. ‘12
May.‘12
Jul. ‘12
Sept. ‘12
• D is the Group lifestyle and fashion vertical
with:
― 1.7M monthly users (165K daily)
― 32M monthly page views (1.1M daily)
― Very strong social network positioning
(over 2M likes for cooking section,
horoscope and fashion and beauty
pages)
― Medium-high target
• Position # 4 in Italy in the reference market
with an English version available
(1) Source: Audiweb December 2012
New D
March. ‘13
• March 2013 total restyling of the website (together
with the printed version) with:
― Improved contents (increase of devoted
journalists from 4 to 12)
― Introduction of new sections (now up to 9)
― Improved services (i.e. video tutorial, experts
comments, look simulation tools)
― Social and community focus
• Target:
― Becoming market leader in the “lifestyle and
fashion” verticals
― “Must have” for the fashion and luxury advertisers
― Leverage the strong “made in Italy” fashion and
lifestyle contents in order to develop the site
internationally (i.e. partnership)
19
Local: online is a big opportunity
Online
(PC, Mobile Tablet)
18 Daily Local Newspaper
La Provincia
Pavese
In 2012 restyling of
all sites with the
same look and feel
(brand GE Local)
Il Piccolo
Messaggero Veneto
La Nuova Venezia
Alto Adige
Il Mattino di Padova
Trentino
La Tribuna di Treviso
Mobile
(m-site / App)
Within 2013 roll-out
for all 18 sites of a
dedicated mobile
site and app
Corriere delle Alpi
La Sentinella
La Gazzetta di Mantova
La Gazzetta di Reggio
La Gazzetta di Modena
Il Tirreno
La Nuova Ferrara
Il Centro
La Nuova
Sardegna
Manzoni Local sales
force (>300 sales
agents)
La Città di
Salerno
Tablet
(App)
Within 2013 roll-out
for all 18 newspapers
of a version with full
functionality
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Local: online is a big opportunity
Italy – Usage Growth (1)
Main data and strategic drivers
(‘000)
CAGR ~30%
Traffic growth mainly related to news
News
Journalistic approach:
Leadership in local news
Not Journalistic approach:
External information, UGC, community
Main Data
• In 2012 restyling of all sites with the same look and feel
introduced in all the 18 local web sites
• Strong usage growth in 2012 (1) . 13 out of 18 local web
sites grow more that 30% yoy
• Leadership in local community news
• Growing (+38%) digital subscriptions (~10K)
Strategic drivers
• Fostering leadership in local community news with focus
on real time, video, sport and user generated community
contents
• Introduction of new local sections (i.e. ongoing roll out on
all 18 local sites of a new brand “trovaserata” with focus
on local events, cinema, sport, restaurants)
• Further area of development are local classified and
obituaries
Local Life
Local Sport
(1) Source: Audiweb December 2012
21
Entertainment: Overall strategy
Online
radio
Online reach of over 70K daily unique users (+18% vs competitor ) and >1m download
for the mobile application
Entertainment
2013
Movies
and TV
guide
Leader in movies and cinema contents
(with 3 million monthly unique users, a community with over
200,000 users' reviews, database with over 1 million pages,
complete coverage of cinema screenings). 2010 launch of
MYMOVIESLIVE!, and in December 2012 of MYMOVIESWIDE!
(VOD)
Community
2010
Multimedia
2005
Information
2004
Services
2003
Database
2000
A vertical entertainment site with a reach of 130K daily unique users and
24mln monthly page views
Gaming
Self
Publishing
Social gaming (fantasy soccer) with a community of over 300K registered
users
Social self publishing platform with a community of almost 200K registered
writers and over 20K published books)
Broad and diversified entertainment media portfolio with interesting potentials in revenues
other than advertising (i.e. video on demand, self publishing)
(1) Source: Audiweb December 2012 and internal data
22
Partnership: Huffington Post and Bloomberg
• Joint venture between AOL (51%) and Gruppo Espresso (49%)
online from 25 September 2012
• In just a few months Huffington Post Italia is already perceived
as an influential source of information:
― Regular daily unique users > 100K and already higher
than some other traditional newspapers web sites.
― Strong social network positioning (over 100K
Facebook fans on Facebook, 40K Twitter followers)
adding considerable content to the website.
― Bloggers community is also expanding, now with more
than 300 participants
Daily unique users (avg)
(‘000)
• In 2011 re-launch and restyling of the Repubblica.it
economy and finance section in cooperation with
Bloomberg
(1)
Daily unique users (avg)
(2)
150
(‘000)
+35%
111
Oct '10 - Sept ' 11
(1) Source: Audiweb
(2) Source: Nielsen Site Census
Oct '11 - To date
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Strategic Priorities and Key Actions
Strategic Priorities
» In the long term, growth perspectives are unquestionable as
the Italian market is still underdeveloped
» Market share is the real focus and the main challenge
» The key drivers to success will be:
― Larger scale/leveraging on strong brands
― Ability to integrate Digital DNA and skills with the traditional
core know how
― Convergence between “written” information and video (i.e.
from “content to be read” to “content to be seen”)
― Real multiplatform convergence (web, mobile, tablets, smart
TV)
― Vertical strategy on specific segments
― “Big Data”
― Content monetization strategy
― Local:
2013 Key Actions:
• Restyling of Repubblica.it with further focus on video,
contents (digital and from print), usability,
engagement and user profiling
• Continuous focus on verticals (i.e. D launch in March,
Repubblica Entertainment in Q2)
• Introduction on all platform (including PC) of new
“modular” payments form adapted to users’ needs
and profile
• Leveraging leadership in local community news with
focus on real time, video, sport and user generated
community contents
• Further focus on the revenue other than advertising
(i.e. video on demand, self publishing)
• Building further partnership opportunities (i.e. Huff
Post) and small scale M&A (i.e. Mymovies)
“System” approach
Content production will be split between traditional
newsrooms and new production units
Introduction of new models in advertising collection
― Adding “pure digital” activities
― International partnership (bidirectional)
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