By April 19, 2016Uncategorized

MittMedia is one of Sweden’s most progressive local media houses, operating 28 newspapers, 13 free papers, digital media and commercial radio. Over the last few years they’ve implemented major changes to turn the business more digital. We grabbed a coffee with CEO Thomas Peterssohn to discuss the future for local news media.

You’ve been CEO at MittMedia almost 5 years – which was your toughest decision so far?

Needs for rationalization and the transition to digital have required fairly extensive cutbacks in staffing, predominantly on the editorial side. In total we’re talking about 200 people, mainly in 2013 and in 2016. Such decisions are always difficult, for everyone, but it was simply necessary due the shift in media consumption.

Mittmedia seems to be quite strategy driven, what is it that you want to achieve?

Our overall operational goal is to be number one in terms of daily local reach in the digital space. To get there we need to double our daily reach from the today’s 30%. I know it can be done. Västerbottens-Kuriren for instance reaches over 50% in their region. The way to get there is to define and then live up to a long-term product promise. In our case this means constantly updated local news online. Our brands must be as natural destinations for the local users as Facebook or Aftonbladet; indispensable if you want to know what’s happening in your neighborhood.

Still, growing from 30% to 50% reach is aggressive. Audience extension is at the heart of what Strossle does, but what other traffic strategies do you have?

During the first quarter 2016 we launched a personalized news app with push notifications, with the goal to drive up visits and transform low frequency users to high frequency users.

We’re also testing newsletters in one of our regions, and this will be rolled out across the group during the autumn. The idea is also to increase loyalty by pushing news to users.

Finally, we will also segment and personalize our article recommendations by referrers. If you visit our site from a Facebook post you will get article recommendations that social traffic are more likely to visit, and if you visit our local website directly you will get local recommendations.

From a commercial perspective – what’s on top of your “change” agenda right now?

We’re in the middle of an important shift where we’re moving from selling reach to selling target groups. Print was historically a reach media, whereas digital can offer advertisers highly specific demographies or interest groups. We’ve already seen small advertisers switch to Google and other sales-driving marketing tools. Large companies still buy print for branding purposes, but the trend is downwards

To handle this shift we’ve introduced a new ad buying tool called Reacher. It allows us to sell not only our own channels but also external channels, like social or national media. The vision is that we should able to help advertisers reach a certain target group on almost any platform, based on geography, demography and interests.

Right now we’re trying to represent both reach and targeting, and that can be confusing. I believe we might have to separate the digital business from the print business even more. The offerings are so fundamentally different and you need highly specialized skillsets to be competitive.

What digital revenues do you see coming, beyond the traditional display ads?

Native ads, video and lead generation are all interesting. We haven’t come that far yet but we’re working on it.

Yesterday, I registered at one of your newspapers and was surprised to see how little information you required from me. Not least because user data has become hard currency for marketers. What’s your view on this?

Firstly, we have a very clear strategy to personalize our offerings. It’s important for advertisers, asking for better precision, and for users wanting a more personalized content mix. Hence, collecting user data is crucial, but I think you have to do it step by step. If you ask people to give away tons of information the first time, they’ll likely refrain from signing up.

But we’re not experts yet. I think the media industry in general has a lot to learn when it comes to digital sales funneling and user experience. We should look at best practice in e-commerce.

Your trials with robot journalism generated massive attention when you launched last year. How is it going so far?

Rosalinda [editor’s note: the name of the sport robot] allows us to produce sports reports at a scope historically unseen. From the end of April we will cover thousands of football matches, also from the lowest divisions, and this resonates very well with our personalization strategy. If the cost for producing a short match report is close to zero, it still makes sense to do it even if it only engages 40 readers, but they find it super relevant. The aggregated readership of such content makes it worthwhile.

Last year we saw the launch of a number of “digital-only” news publishers, like 24Kalmar and News55. How long will you keep the printed newspaper?

We have absolutely no intention to close the printed newspaper prematurely. It still represents 90% of our revenues. But also 90% of our costs, and a large chunk of these costs are fixed. So far we’ve been able to compensate declining print circulation and advertising with higher prices – we actually made an all time high in 2015 – but if the paper starts showing red numbers we’ll have to act accordingly.

What kind of measures are we talking about then?

It could for instance be to lower the distribution frequency, but again: the problem is that a large share of our print costs are fixed. And maybe even more importantly, nobody knows exactly what the effects will be on the revenue side. There are a couple of cases where very small news publishers have reduced the frequency, but there’s not enough data to draw any general conclusions.

What was the main objective with the planned – but later called off – merger with Svenska Dagbladet?

In that case the rational was two-fold: merging with a solid news publishers who’s owner Schibsted would continue investing in the digital transition. The second was technical synergies. SvD has invested heavily in their new media platform, something that we could have used.

So why was the deal called off?

At the end we dropped out because Schibsted weren’t prepared to invest enough to motivate their relative valuation and share of the joint company.

Do you think we’ll see other mergers and an accelerated consolidation of the newspaper industry?

Yes. Right now there’s a number of media owners contemplating whether to stay in the media industry at all. This has been accentuated by the structural changes, and they know it’s going to be an even bumpier ride over the next 4-5 years. If you’re owned by a foundation, like MittMedia and Gota, there’s often a clearly stated mission, which can’t be changed easily. These companies will continue to invest in media. But if you’re privately owned, chances are that you’re not willing to take the risk, and prefer to sell.

By Dan Willstrand