Globalization of media in B2B-publishing 05-09-02 Ruud Bakker Chairman & CEO.

Globalization of media inB2B-publishing

05-09-02Ruud Bakker

Chairman & CEO

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Overview

VNU – introduction

Globalisation: some observations

Mission statement of business information

The cross media concept

Strategic opportunities

Tactical opportunities

Reality check

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VNU: an introduction

Active in over 100 countries Market leader with premium brands Top 25 Euronext Exchange Amsterdam Media and information for professional use

– marketing information

– media measurement & information

– business information

– directories Based in Haarlem, The Netherlands Worldwide 38,000 employees Revenues over EUR 4.3 billion

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Business information through 3 channels:- Print: 140 trade magazines and directories- Face to face: 150 trade shows and events- Internet: 250 related sites

Insight in business and trade

Media that connect buyers and sellers

VNU Business InformationVNU Business Information

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VNU Business InformationFirst half year 2002 results

Fall in advertising revenues in the US has bottomed out,continued decline in Europe, cost savings will off set declinein US, further round of cost savings in Europe implemented,as exposed to IT-publishing and recruitment advertising markets.

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Key messages

Exhibit 6

Traditionally (Business) media & information ranked “low” in terms of “readiness” for globalization

Electronic media & information and competitive forces are now gearing up the (business) media space;

Sources of competitive advantage will be based on business intelligence resulting from a database publishing model.

VNU’s Cross-media Strategy

builds on this “globalization” trend

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PRINTPUBLISHINGLittle Growth

Reduced ProfitabilityLow Share holder valuePoor Customer focus

No services

INFORMATIONPUBLISHING

GrowthProfitability

Share holder valueCustomer focus

Enhanced services

Pressures for change

The dynamic publishing model has changed the value chain It is strongly influencing users views of how to best access information It is changing the way users subscribe to publications It is affecting the Brand Print identity It is transforming the content supply chain, the finances, the marketing, the customer

relationships, the distribution paths, the kinds of publications and the business strategies within publishing

Global slowdownGlobalisation

‘Free’ web contentNew models

ROS

Economics

Self ServiceOn Demand

Multi ChannelPersonalisation

Added value

Customers

DigitisationInternet Growth

e-delivery channelsCTP

Technology

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Business information strategy

Central to VNU’s strategy is the connection of our Central to VNU’s strategy is the connection of our core activities and competencies to provide a core activities and competencies to provide a

deeper insight of b2b and b2c consumer’ behaviour deeper insight of b2b and b2c consumer’ behaviour to clientsto clients

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Cross media strategy: The Concept

Key is dynamic relation between brand and community; Core elements of that relation are:

Circulation database; Content database; Media platforms.

B2B publishing is an information business: Defined communities of professionals; Deep knowledge of community:

targeting data on demographic and professional profiles combining content-data with profile data;

Providing business intelligence in multi-platform distribution: Print publishing; Conferences and exhibitions: face to face media; Online electronic media; Offline electronic media; Print and electronic direct mail; Research.

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Cross media strategy: The Value of the Concept

Central strategy: the connection of VNU’s core activities and competencies to provide a deeper insight of b2b and b2c ‘consumer’ behaviour to clients;

The past was about building media brands, the future is about strategically leveraging their assets to offer information based solutions to clients;

Objective: open up new and more profitable revenues by: providing a one stop media and information resource from

research and planning through to delivery, encompassing pre and post awareness research and offering

analysis of results and buyer behaviour.

Critical success factor: a menu of information products and services by: combining databases with data mining tools, to deliver better results and unique data to our clients through our

media channels.

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Top level view of business components

Paper publications

Research

Shows

Conferences

Digital publications

Direct Marketing

Warehouse

Symbiotic relationship should exist between all businesses and platforms linked by an information ring main and having a warehouse at it’s core to feed a CRM tool which serves to track and build

Revenue contribution of each name in the warehouse

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Publish

What do we want for Cross media?

Create Sub Edit Paper

Web

Email

PDA

SMS

Workflow

Ownership, rights management, NDA, Embargoes, Platforms, recharges,

Paid/Unpaid, Manual classification

Central repositorydb

Automatic classification & Indexing

XML

Storage

Thesaurus

Denotes re-use

WAP

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Future media information business model

Content Input

News, Pics, ListingsAds, Prices, LabsReviews,classified

Urls, etc

Publishingdb

Data Output

Syndication intelligence, directoriesResearch, list rental,

etc

Content Output

Paper, Web, EmailPDA, PDF, ebookSMS, Events, etc

Listdb

Data Input

Registration personalisation digital usage,

orders, etc

Intelligencedb

14Integrated Workflow

European Architecture

LocalWorkflow

AUTOMATED

Word PhotoShop

Quark

Live db Server

Staging db Server

ISDNServer

Paper PDA WebemailSyndication ebook

AUTOMATED UPLOAD

Metadata

ExplorerNetscape Java BasedWeb CMS

(Spanish)

Media Portal

Ads PR

PDFText Images

Edit

Quark DMS Server

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This is the way we managed – in traditional publishing - our products

OriginalProductPaper

Productebook

ProductSMS

Productweb

ProductExhibition

ProductList rental

ProductPDA

Product email

In the past product tactics have driven

platform strategy which limited the development of new products as we tried to protect position of original at expense of

the new

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Key for the future is how we manage and perceive our brands

Productebook

ProductSMS

Productweb

ProductExhibition

ProductList rental

ProductPDA

Product email

ProductPaper

ProductPaperBrand

StrategyBrand strategy drives product

tactics maximising

potential of all and limiting none

TacticsWhat to publish?

To which audience?On what platform?

Which revenue models?How much ROI

What level of marketing?

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Which will define and drive our reader information collection strategy

BrandCRMdb

ebookEdition

sub

EmailAlert reg

WebPassword

reg

Research:Planning &awareness

List rentalOpt incheck

Exhibition:Interactive

Client/Visitor marketing

PDADownload

sub

PaperSubsform

Each platform has different Reg requirements.

The Brand CRM collects all

records for each user, building up a better picture of cross media use

The user submits less info for each

registration. But we collect more for

each individual. All can be managed from one point.

Making registration easier and more

efficient

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How do we realise this

Requires a fundamental shift in our thinking….

Our Key assets are: Brand & communities Readers = Circulation databases Advertisers = Client Databases Content = Databases of media assets

As a magazine publisher we did not need to treat editorial as a collection of assets;

As an information provider with multiple platforms we need to combine the media assets of our core brands with our customer databases;

Therefore we must not think platforms but assets.

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Strategic opportunities

One content production system for many platforms, cross border production;

Central cross border editorial production units (news, specials product-testing);

Re-using media assets across borders in flexible way (text, data, images);

Creating once, (re-)producing many times; Direct syndication of content; Efficient (optimal) delivery of content on different platforms; Generating more revenues from the same readers (adding

premium services on different platforms); Selling business intelligence/information solutions to customers:

targeting, research.

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Categorical cost overview print publishing VNU BME

Total Direct Costs 37%

Gross margin 63%

Editorial 15%

Sales 8%

Other Operating Costs 2%

Marketing costs 7%

Contribution to overhead 31%

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Tactical opportunities:optimising the cross media model

Reduce production costs (paper,print, distribution); Reduce editorial costs; Increase revenues:

Higher ad-yields; Paid for premium services; Targeting data; Research;

Higher investments: Infrastructure; Sales; Marketing.

Total Direct Costs 37% 35%

Gross margin 63% 65%

Editorial 15% 13%

Sales 8% 9%

Other Operating Costs 2% 3%

Marketing costs 7% 8%

Contribution to overhead 31% 32%

Increased revenue potential 5%@ 80% incremental margin

Potential margin improvement 5 points

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Reality check

VNU Business Media Europe is current rolling out the European architecture to facilitate the cross media database information model;

In the year 2003 we will have central publishing units operational in London (Newswire), Munich (European special unit) and a networked product-testing Lab (London/Munich/Paris);

All European publications are now computer to plate-produced (CTP) and we are considering having part of the portfolio (monthlies) produced centrally;

European wide and local syndication shows accelerated growth;

Main Challenges: Combining the many circulation databases, integrity of data; Generating more reader-revenues by exploiting the database

information; Creating premium services to readers, increasing revenues per

subscriber.

Thank you!