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A proactive approach to digital transformation at Aller Media Finland

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A proactive approach to digital transformation at Aller Media Finland

WAN-IFRA is starting a series of case studies of digital transformation at media companies, to be published as reports in the coming year. This is an edited transcript of an interview that WAN-IFRA Director of Insights Dean Roper conducted for the first report in the series.

WAN-IFRA: Please describe Aller Media Finland's structure.

Elina Schüller: Aller Media Finland [2017-18 turnover: 44 million euros] is organized into two sectors: the marketing business and the media business. The latter includes our two magazines, both weeklies: Seiska, the biggest weekly and biggest magazine in Finland, and Katso, the TV guide. Seiska has a very large website that we focus heavily on. And then there is Suomi 24, which is a discussion forum, not directly related to publishing, and which is tied to our dating service, Suomi 24 dates. Responsibility for Suomi 24 is shared between the marketing and media business departments.

I also should mention that in our marketing services we have a data analytics operation that we have built ourselves. We sell it to our B2B customers but we also use it a lot in our media business.

What are your day-to-day responsibilities?

I'm in charge of the magazines. I also have a B2B sales department, and B2C customer acquisition and service. Then we also have development teams which are tied to our printed products.

Could you describe the magazines?

Seiska (in photo below) is an entertainment magazine, focused on gossip and paparazzi pictures, dealing with mostly domestic celebrities. It's somewhere between People magazine and National Enquirer. Katso is a weekly TV guide and of course includes editorial TV content.

You mentioned in an earlier conversation that some other magazines were sold. What were those?

We sold our four monthly magazines in the past year's time. The first one was called Fit, focused on fitness and well-being. We also had Home and Kitchen; Elle, which was licensed from Hearst; and My Time, which was focused on people aged 50-70. We first sold Fit to Fokus Media, a Finnish company focused exclusively on print magazines, and six months later sold them the rest of the titles.

Why were they sold?

Because we wanted to act before we were forced to make other drastic changes. All of those magazines were still profitable, but we saw that they didn't have a long future, and within the next couple of years some of them wouldn't be profitable anymore.

At Aller, we prefer to act before circumstances force us to do so.
– Elina Schüller, Director of Media Business, Aller Media Finland

So we sold them and got a reasonable price, instead of waiting two or three years and getting much less.

Is Aller Media a public company or a private company?

A private, family-owned company, with headquarters in Copenhagen and operations in all four Nordic countries. The operations are completely independent of one another and all quite different. I believe Aller Media Denmark is the biggest publisher in Denmark, with somewhere between 20 to 30 magazines. In Sweden also they have plenty of magazines – monthlies and weeklies. The operation in Norway is most similar to ours in that we both have made the most dramatic changes in the past couple of years.

You joined Aller Media Finland about two and half years ago – is that correct?

Yes. I started as content director and after we sold our monthlies, our board decided that because we had fewer print products, it would make sense to put them under one person's control. Then my colleague who was in charge of B2C and B2B sales left the company, and I became director of the entire media business. A key factor was the fact that I had worked for tabloids for my entire career before I came to Aller.

Had the company started on a digital transformation journey before you arrived?

Our CEO had recognized the need to take action, and had made acquisitions such as the discussion platform Suomi 24 and the digital marketing company Dingle. But we still had legacy media that, even though they continued to make lots of money, were clearly declining, along with the entire media market. So something had to be done to insure our future – a digital future – and work started at about that time. Seiska was the primary focus, since it is most likely one of the most profitable media brands in Finland.

What was your role in getting this journey under way?

From my experience in news media I brought ideas about how working methods needed to be revamped in order to build a digital future; about necessary developments in products and content; and about focusing on customers rather than products.

At that time Aller was very closely tied to its legacy. And most of the people who worked here had been here for somewhere around 20 years. There had been very few newcomers in the media business.

It was a bit difficult and it caused some pain to change the ways people work, since Seiska was still very profitable. But we had to do it, to inspire these people and show them the future beyond the next month's or year's time.
– Elina Schüller, Director of Media Business, Aller Media Finland

We needed to look five years down the road, to see where we were going and prepare for that.

How was the roadmap drawn up?

The vision came from our CEO, Pauli Aalto-Setälä, but he needed someone to bring it to life, so I, our COO, Teemu Puurunen, and our IT director, Juha Kuokka, started to work closely together. We set up cross-border teams. For instance, we have a digital media business team that includes experts from IT, from the editorial side, from B2B and from design, and they started to draw the roadmap and describe the tasks that they saw would help us on the way.

We hold steering meetings where we directors give the teams advice and make the decisions they cannot make. We have empowered the teams to make decisions that don't involve spending money or adding resources. For those kinds of decisions they have to ask us.

And everything they do has to be aimed in the direction we have envisioned. We of course evaluate everything, to see what works and what doesn't. We work in an agile way not only in IT but also in business. So we don't have a set of fixed plans – we experiment, evaluate, learn, take action, and then repeat the process. That's the way we started working.

You're talking about culture change, of course. Is there one thing that you can point to that's been a successful tactic in creating culture change? Is it a matter of communicating the vision you're talking about, spelling it out?

I think it was creating an overall strategy and common goals. At Aller, managers and staff were used to working toward their own specific goals – B2B goals, B2C goals, and editorial goals, such as increasing market share, for example. But I started setting common goals across my management team. Each team member was evaluated based on total growth and progress toward those common goals.

Managers started working together more and started to leave their comfort zones. They started to learn more about one another's work.
– Elina Schüller, Director of Media Business, Aller Media Finland

At first they thought this was just 'nice to know', but they gradually realized how everything they do affects other parts of the business.

Another big development was bringing data analytics to the forefront. We started making decisions and taking actions based on data rather than assumptions. We had built our own data capabilities, but they were used quite little in the media business. We started measuring how well our direct marketing campaigns worked in the long term, for instance – how many subscribers stuck with us for three or four months or longer. So the analysis went deeper.

How can you see the results of the changes reflected quantitatively, in the form of stronger KPIs or the like?

We can see three improvements in terms of measurable results. For one thing, Seiska is doing better than the overall market is doing – a lot better. We have managed to increase our subscriber numbers, which in the media landscape of 2019 is no small achievement. That's a good measure of our success.

The above slide from Schüller's presentation at Digital Media India 2019 documents Seiska's statistics.

Secondly, the development work we have put into Seiska's digital presence, the website, has paid off. We haven't stared at the statistics, because we know the numbers don't mean money. But we have turned the revenue graph into a 'hockey stick' form, and it has continued to rise for many months rather than peaking and then declining.

And the third factor is how satisfied people are with their work.

Staff motivation and work satisfaction are improving. People feel they are getting better at what they do and are creating more value for the company at the same time.
– Elina Schüller, Director of Media Business, Aller Media Finland

How much of your total revenue comes from digital operations?

In the media business we get 30 percent of our revenue from digital, the rest from print. Print revenue comes mostly from B2C but also from B2B.

Most of our digital revenue comes from advertising but some is from subscriptions, since it also includes our dating service, which is based on digital subscriptions. Ad revenue is mostly programmatic, from display ads, but branded content is starting to grow in importance.

The work on Seiska's development has increased its value, though, and in the past six months we have convinced a couple of the biggest advertisers in Finland that we are the place where they can reach the masses, where they can reach people who go to supermarkets and buy shopping carts full of things for their daily lives.

I assume that most of the traffic comes from mobile.

Yes, most of it comes from mobile. We have done a lot of development work on the mobile experience. Just two years ago desktop was still hugely important, but mobile has increased steadily.

Do you have dedicated apps for those brands you mentioned?

No, we don't. Only a beta version of an app for our dating service has gone live.

Our thinking is that we need to have enough direct traffic before we start building apps. Users need to be so heavily engaged with one of our products that they are actually willing to download the app.
– Elina Schüller, Director of Media Business, Aller Media Finland

We want to do apps, but we are taking a long-term approach to this – one step at a time.

Back to advertising for a moment. I assume your editorial structure needed to be revised as part of the digital transformation, but how about your ad sales teams?

Nowadays our sales teams are focused on certain brands. We made that change about four months ago. Previously, they were selling across brands, but that didn't work as well as we wanted it to. So we decided that it might be best to have focused sales teams for Seiska and Suomi 24, and that has brought us really good results. There are clear signs that it was a very good change.

Where does Aller Media Finland stand with regard to paid digital content? Do you envisage paid content for some parts of your online publications?

Yes, we do, which is why we have an experiment going on. We have started to put some of Seiska's biggest and most tempting news behind a 'registration wall' so users have to register, with their e-mail address, to read it. We see that as a first phase that will tell us what kinds of content and services users want so much that they are willing to give their e-mail address and sign in. In the next phase, once we see what they might be willing to pay for, we will start looking into payment for content. That might happen this year, or it might happen next year. At any rate, we definitely see that there are possibilities.

What is the biggest challenge you face at the moment?

What we were just talking about: how to get people to pay for content.

We know that ad revenues will not grow indefinitely, so looking at the future of media, we see that there must be a decision to charge users for content. But how will we do that?
– Elina Schüller, Director of Media Business, Aller Media Finland

That poses the biggest challenge, because Finland is a small market and language area, so we are a bit worried about whether there is enough money to go around for all the brands. Also, Seiska is working really well in print and will be one of the longest-living brands as a printed product, but for how long? So how can we monetize it digitally?

Could you describe some of your other operations and how they fit in to the overall picture at Aller Media Finland?

We had two lifestyle websites, but they were kind of left behind when we sold the monthly magazines, so we closed them down at the end of last year. They still exist but are no longer actively developed.

On the marketing side we have three units. One is Data Refinery, which is our data center. It serves our own media business in customer acquisition, building focus groups, and so on, to name just a couple of examples. They also sell their capabilities to external customers. Then we have Dingle, which creates marketing content for external companies, especially on social media. The third unit is Ideas, which is focused on producing magazines and website content for customers. For example, it publishes for K-chain, one of the largest groups of grocery stores in Finland, which is owned by Kesko Oyj. We create and publish their magazine. Another customer is the Vepsalainen chain of furniture stores. Quite a few of our magazine editors have moved to that department, because they have knowledge and expertise in that area.

Please comment on the staffing situation at Aller Media Finland. How many employees does the company have? Were there significant numbers of layoffs and departures in the past two years because of the transformation? And I assume that as part of your investment in data, you are hiring people with new skill sets.

We have 220 employees at this point and yes, we have had some layoffs, about 15 in total. Some of those were in our television content department, which was still kind of old-fashioned when I arrived. Since I had worked at tabloid newspapers that also had TV guides, I saw the ways we could run that operation more efficiently. We had a new CMS that automates a lot of the handling of the EPG [electronic program guide] data, so we didn't need so many people there.

About 25 people who were working at the four monthlies moved to the company that purchased those titles.

We are focusing on hiring the skills we need. We did not do those layoffs just to save money, but to invest in the skill sets we need for our future: data analysis, IT, architecture and product owners, for example.

Author

Dean Roper's picture

Dean Roper

Date

2019-02-26 17:00

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