Johnston Press' trasformation strategy

Johnston Press

TOWARDS 2020: TRANSFORMING LOCAL MEDIA
ACROSS THE UNITED KINGDOM & REPUBLIC OF IRELAND
VISION, STRATEGY AND EXECUTION PLAN
APRIL 2012

25 April 2012 Towards 2020 www.johnstonpress.co.uk

Towards 2020

1. VISION

MIDLANDS THURSDAY 16 FEBRUARY 2012 13:58
Anna James looks through the Peterborough Telegraph

25 April 2012 Towards 2020 1 www.johnstonpress.co.uk

Vision 2020

VISION
 Fundamental consumer needs remain  It will be much more of a partnership
consistent: knowing what's happening with the communities we serve
in your local community and having a
trusted platform to engage in the debate  Building deeper relationships with our
audience and advertisers will enable us to
 Reaching an engaged audience with move beyond publishing and our traditional
services of interest to them remains footprint into providing services that make
a key marketing goal of local and the lives of our audiences and advertisers
national businesses easier, more efficient, better informed,
and more fun, whether they live in,
 Serving both these communities, audiences commute to, or visit our communities
and advertisers, in a trusted, quality, and
authentic way, will remain the core focus
of Johnston Press
 The future of local media will however
be very different in its delivery. It will
be predominantly digital on a daily and
hourly basis with most print editions
being a weekly, in-depth, read


Vision 2020

WHAT WILL LOCAL
MEDIA BE LIKE IN 2020?
Community is becoming more,
REMAINING not less, important
RELEVANT AND TRULY PAN-
Continue to focus on news, business,
MEDIA WITH
REMAINING sport, entertainment, and community SIGNIFICANT
POPULAR SHIFTS IN
REMAINING
Advertising will continue to be a mix of Property, PRODUCTION AND
EFFECTIVE
Autos, Jobs, Classifieds and run of page,
complemented by large increase in behavioural CONSUMPTION…
targeted advertising and genuine national advertising

Journalists and ad-sales staff on
REMAINING the ground, in the heart of the
PRODUCED BY community - our continuing USP

LOCAL PEOPLE

Vision 2020

WHAT WILL OUR BUSINESS
MODEL BE LIKE IN 2020?
AUDIENCE CONTENT CREATORS MEDIA CONSUMPTION

2011

2020

DIGITAL PRINT USERS JOURNALISTS DIGITAL PRINT


Vision 2020

WHAT WILL OUR BUSINESS
MODEL BE LIKE IN 2020?
BUSINESS MODEL 2012 2020

220 paid-weekly titles All titles will lead with digital first, few
Product
18 dailies daily print

75 free titles Fewer free printed papers, integrated
Portfolio
238 paid print/online subscription bundles

50% subscription - business run on ARPU
Subscription 3% subscription
basis

Local brands still core, but 20% or
99% value tied to more contribution from local/ national
Brand value
local brands services, e.g., DealMonster, SME portal,
entertainment listings service


Vision 2020

WHAT WILL THIS
MEAN FINANCIALLY?
REVENUE ARPU TURNOVER AND PROFIT
PRINT V DIGITAL (ANNUAL) (£M)

2011

2020

DIGITAL PRINT DIGITAL PRINT PROFIT TURNOVER


Vision 2020

A BUSINESS
BASED ON ARPU INCREASING ONLINE ARPU DRIVES PROFITABILITY

PRINT & DIGITAL
REVENUE & ARPU £0.70
(EXCLUDES OTHER JP 500 (£1.4m/
2m users)
REVENUE STREAMS) £452.4m £10.00
(£200m/
£2.00 £4.41 20m users)
(£53m/ £400m
400 (£10m/ £2.87 12m users)
5m users) (£23m/ £353m
£343m 8m users)
£318m

TURNOVER (£M) 300
Digital

200 £32.00 £30.00 £29.50 £30.00 £25.00
Print (£451m (£333m (£295m (£300m (£200m
revenue/ revenue/ revenue/ revenue/ revenue/
15m users) 11m users) 10m users) 10m users) 8m users)

100

2008 2010 2011 2015 2020
£ GROSS PROFIT/£’m/ OVER DOUBLE
MARGIN ASPIRATION 128 72 N/A CURRENT MARGIN+ CURRENT MARGIN

Note: Future revenue, profit, and margin numbers are not forecasts


Vision 2020

WHAT WILL THIS MEAN
ORGANISATIONALLY?
ORGANISATION 2012 2020

Mostly journalists Many more community
Staff Mix
or ad sales contributors

Regional and Flatter and more functionally
Staff Layers
hierarchical organised

Functional Multiple printing Consolidated print sites
Centres sites and call centres and call centres

Centre v High degree of More central templating, regional
Local local autonomy editorial hubs where relevant

People Journalists on the ground in every town (it’s our USP)


To 2015

2. STRATEGY

NORTH TUESDAY 21 FEBRUARY 2012 10:45
Tom and Owen Smith check out what’s on at the weekend with the Halifax Courier


Strategy to 2015

WELL POSITIONED
FOR FUTURE GROWTH

STRONG CORE ON THE GROUND STRONG COMPETITIVE INCREASINGLY
COMPETENCIES PRESENCE POSITIONS DIGITAL BUSINESS
 Focused on core  2000 local  Leading positions  Rapidly growing
business – local journalists – throughout the UK digital audience
media – unrivalled (changing and Ireland – No 1
understanding of mix towards brand in most of  Pipeline of digital
our local markets citizen/freel our markets developments
and customers ance)
 Majority of weekly
 Industry leading  1500 local products
investment in sales staff
process (moving up
technologies the value
chain)


Strategy to 2015
AGGREGATE

OUR AGGREGATE
30
AUDIENCE
(ALL MEDIA) 25

AUDIENCE IS GROWING
AUDIENCE
(millions of 20
unique users)

SIGNIFICANTLY
15

2010 2011 2012 2020

ONLINE
 Newspapers continue to be AUDIENCE
25
a core element of media mix, 20
weekly declines can be arrested 15
through relaunch – world class 10
design and content 5

 Online will become dominant 2010 2011 2012 2020

medium for local news & services NEWSPAPER
AUDIENCE 20
 Combined audience changes are 15
significantly positive for us and -6%
-5%
10 -2%
represent a fundamental driver
of our future growth 5

2010 2011 2012 2020


Strategy to 2015

MULTIPLE REVENUE STREAMS
FROM DIGITAL PUSH
MON TUES WEDS FRI SAT/SUN THURS

Daily Digital Daily Digital Daily Digital Daily Digital Daily Digital Daily Digital
Newspaper Newspaper Newspaper Newspaper Newspaper Newspaper

IPAD/TABLET APP: APP FEE AND BUNDLED SUBSCRIPTION REVENUES

News updates News updates News updates News updates News updates News updates
Social media Social media Social media Social media Social media Social media

WEBSITE: ADVERTISING REVENUES

Smart phone Smart phone Smart phone Smart phone Smart phone Smart phone

SMART PHONE: ADVERTISING REVENUES, TASK ORIENTED E-COMMERCE Weekly Paper:
REVENUES AND MICROPAYMENTS Newspaper
Cover price
& advertising
revenues


Strategy to 2015

MOBILE WILL BE THE
KEY GROWTH CHANNEL
 Mobile services reach  Mobile users are  These consumers access
a new demography task oriented and our content because it
who may not buy our have a high propensity provides the utility
newspaper or live inside to purchase they need (e.g. football
our franchise area results) and they trust
the brand

USER PERFORMS JP TITLES USE SEO AND SEM TO USER CLICKS THROUGH AND
LOCAL SEARCH RANK HIGH IN SEARCH RESULTS COMPLETES TASK/ MAKES
PURCHASE ON JP SITE


Strategy to 2015

MOBILE WILL BE THE
KEY GROWTH CHANNEL
Announcing today the launch of free football smartphone apps for 10 titles


Strategy to 2015
GROWTH WILL ALSO COME FROM LEVERAGING
AGGREGATE OUR LOCAL CONTENT ASSETS TO CREATE NATIONAL
CONTENT TO BUSINESSES WITH DIVERSIFIED REVENUES

CREATE VERTICALS 250+ JOHNSTON PRESS
LOCAL CONTENT FEEDS,
UK AND IRELAND

+SOCIAL MEDIA CONTENT
+SYNDICATED CONTENT

+COMMERCE AND
PARTNER SERVICES

+ADVERTISER CONTENT
FROM OUR SME CRM
DATABASE


Strategy to 2015

FIRST 90 DAYS

SET NEW VISION RETAINING
RAPID PROGRESS AUDIENCE LOYALTY
AND STRATEGY
 Engaged top 130  Management delayered  Weekly newspaper
management sales performance
 Finance function best in class
 Prepared vision, strategy centralised
and execution plan  Year-on-year growth of
 Print press closed almost 50% in monthly
 Increased communication unique browsers
with all staff  Business processes
standardised
 Relaunch initiative
started


Strategy to 2015

TURNING THE CORNER
 Local display advertising resilient JOHNSTON PRESS PUBLISHES

9 OF THE 25
 50% increase year-on-year
digital audience
 Online inventory up…
monetization improving
UK WEEKLY NEWSPAPER TITLES
 Non-advertising revenues THAT REPORTED A YEAR-ON-YEAR
flat/increasing
SALES GROWTH IN 2011
 Investments in central
(ABC circulation data)
technology enabling growth
 Pricing and productivity
benefits identified – further
scope for value creation in 2012


Strategy to 2015

SUMMARY
ASPIRATION BY 2020  Sustainable print audience,
rapidly growing online audience
SALES
£400m  Margins driven by lower input costs,
lower customer acquisition costs
(increased ARPU) and higher margin
PROFIT OVER DOUBLE digital businesses
2011 MARGIN  Continuous product leadership
in local print, mobile and online
50/50
REVENUE
SPLIT
 Leverage local content assets
PRINT/ONLINE to create national verticals with
diversified revenue streams
 On-going productivity improvement,
process excellence and cost reduction


Towards 2020

3. EXECUTION
PLAN

SOUTH FRIDAY 17 FEBRUARY 2012 16:25
Tom James updates his company’s advertising in the Hastings Observer


Execution Plan

OVERVIEW

1. BUILDING OUR BRANDS
Extend local trusted brands
across platforms

2. RE-LAUNCH ALL TITLES
Increase margin, grow
circulation and audience

3. ACCELERATE DIGITAL STRATEGY
Build out online classifieds, create
new vertical content businesses

4. EXPLOIT TECHNOLOGY
Increase productivity and scale


Execution Plan Step One

BUILDING
OUR BRANDS

SOUTH WEDNESDAY 7 MARCH 2012 12:30
Alan Jones catches up on the local news during his lunch break


Execution Plan Step One: Building Our Brands

BUILDING
OUR BRANDS 18 PAID-DAILY
NEWSPAPERS
Even greater relevance

SIGNIFICANT LOCAL
220 PAID-WEEKLY
NEWSPAPERS
BRAND PORTFOLIO
HIGH LEVEL OF
COMMUNITY LEGITIMACY
238 LOCAL
WEBSITES
AND CONSUMER TRUST

UNQIUE CONTENT:
100,000+ ARTICLES
ANNUALLY
30 FREE-WEELKY
NEWSPAPERS

7 MAGAZINE
TITLES


MORE RELEVANT
IN DIGITAL AGE

PEOPLE HAVE 85% 81% AGREE
BECOME “ The recession has
INCREASINGLY 81% made supporting

SUPPORTIVE 50% your local community
more important.”

OF THEIR LOCAL 80%
84%
COMMUNITY
83%
83% 79%
71%
78%
83%
90%
Source: NS/Loving Local Survey 2011


PEOPLE ARE SPENDING TIME
LOCAL AND MONEY LOCALLY
FOCUS
Opportunity for advertisers to reap benefit

LOCAL MEDIA IS TRUSTED AND
INFORMS PEOPLE ABOUT LOCAL AREA
Which of these contains content that you trust? 80% TIME 92% TIME
Which of these is relevant to know that the area is improving? I spend half or more of my I spend half or more of my
time within 5 miles of home time within 10 miles of home

74% MONEY 89% MONEY
I spend half or more of my I spend half or more of my
Source: NS/Loving Local Survey 2011
money within 5 miles of home money within 10 miles of home



LOCAL AND MOBILE LOCAL MEDIA IS AN ACTION BASED MEDIUM

– ACTION BASED
Opportunity for advertisers to reap benefit

45% USED A PRODUCT/ 50% VISITED A STORE/
CAPITALISE ON GROWING UK’S LEADING SEARCH SERVICE DUE TO AD OUTLET DUE TO AD
TREND TO ‘LIVE LIFE LOCALLY’ ENGINES SEE STRONG
 Trend to mobile searches TREND TOWARDS ‘LOCAL’
and immediate  Google has seen mobile
fulfilment search increase five-fold
 Uniquely positioned to worldwide in past two
capitalise on the years
migration to ‘social’,  Bing report that 50% of
51% USED COUPON/ 64% LIKE TO SEE NATIONAL
‘local’, ‘mobile’ mobile search queries MONEY-OFF VOUCHER BRANDS ADVERTISING IN
have local intent THEIR LOCAL PAPER
 Bing report that 70% of
task completion happens
within one hour

60% TAKE ACTION
AS A RESULT OF AN AD
Source: mashable.com/2011/07/12/mobile-search-trends-google-bing/ Source: NS/Loving Local Survey 2011



BUILDING
OUR BRANDS
Relaunch mobile news websites

ALREADY OVERHAULED
WEB CONTENT
MANAGEMENT SYSTEM
AND NOW STARTING TO
ROLL OUT MOBILE (IPAD
AND SMARTPHONE) APPS
Examples of the re-launched
mobile news websites:


BUILDING OUR BRANDS



BUILDING
OUR BRANDS Since launch of Scotsman app on 23rd Jan….
Even greater relevance

10,000 DOWNLOADS
(To 25 April)

750 SUBSCRIBERS
(since subscription period for
first users 22 Feb to date)

2400 TARGET
SUBSCRIBERS
FOR YEAR 1


Execution Plan Step Two

RE-LAUNCH

SOUTH TUESDAY 6 MARCH 2012 11:00
Kate and Sarah check out the fashion pages in etc during their break at work


Execution Plan Step Two: Re-Launch

RELAUNCH IMPLEMENTATION PROGRAMME 2012
RELAUNCH

WHY RELAUNCH?
 Increase margin
 Align pricing PHASE 4
 Increase circulation 60 titles
Nov 2012
 Increase aggregate audience
 Cross promote PHASE 3
 Drive online traffic 37 titles
Sept 2012

WHAT WILL RELAUNCH INCLUDE? PHASE 2
 Newspaper redesign 53 titles
 Format changes (5 daily-to-weekly, July 2012
& broadsheet to compact) PHASE 1
 New editorial workflow 18 titles
 Best practice content May 2012
 Enhanced advertiser proposition


WEEKLY NEWSPAPER CIRCULATION AND COVER PRICE CHANGES
WHY RELAUNCH? (JANUARY TO JUNE 2011)

INCREASE MARGIN
IND NC NQ TM JP
10%
5%
0%
(5)%

Change in circulation
(10)%
(15)%

INCREASE COVER PRICES WITHOUT
(20)%
(25)%

ADVERSELY IMPACTING CIRCULATION
(30)%
(35)%

TO MAXIMISE REVENUES FROM
(40)%
0% 5% 10% 15% 20% 25%

NEWSPAPER SALES
Cover price increase

 No direct correlation between weekly WEEKLY NEWSPAPER COVER PRICE AND CIRCULATION CHANGES
newspaper circulation and cover price (JANUARY TO JUNE 2011)
changes 10%
IND NC NQ TM JP

5%
 No direct correlation between actual 0%

cover price and circulation change (5)%

Change in circulation
(10)%

 Coleraine Times: cover price £1 but
(15)%
(20)%
circulation declines were limited to 2% (25)%
(30)%
(35)%
(40)%
£0.00 £0.20 £0.40 £0.60 £0.80 £1.00 £1.20 £1.40 £1.60
June 2011 Cover price



WHY RELAUNCH?
ALIGN PRICING

HORSHAM AND
HARROGATE – £1  Anomalies of high socio-demographic
readership in strong local economies
with lower cover prices than low socio-
BOTH UPMARKET demographic readership in relatively
BROADSHEET weaker local economies
NEWSPAPERS, YET:
 Price realignment addressed at
re-launches/repositioning
65p



WHY RELAUNCH?
INCREASE CIRCULATION

CAPITALISE ON POSITIVE Sales performance of reformatted titles
IMPACT TITLE RE-LAUNCHES Title
Date Sales trend Sales trend
% improvement
HAVE ON AUDIENCE changed pre Change post change

Lancaster Guardian May-11 (8.8)% 6.8% 15.6%
 Positive circulation impact
on all re-launches to date Falkirk Herald Nov-11 (8.6)% 2.7% 11.3%

Hemel Gazette Sep-11 (12.0)% (2.2)% 9.8%
 Opportunity to increase
audience impact - improve Isle of Man Examiner May-11 (9.2)% (0.5)% 8.7%
cross-promotion, content Brighouse Echo Oct-10 (16.4)% (9.8)% 6.6%
and print/online integration
Fife Free Press Nov-10 (4.7)% 1.0% 5.7%
and use of social media
Banbury Guardian Mar-10 (3.8)% (2.4)% 1.4%
 A 10% net change in
circulation sales, sustained Averages (9.1)% (0.6)% 8.4%
for 6 months post re-launch Note: The pre- and post- sales performance is based on a period that changes from title to title.
could yield up to £5m For most, it's about 8 weeks; Based on internal sales data



WHY RELAUNCH? IN LAST 10 YEARS, SOME PAPERS HAVE INCREASED TOTAL
INCREASE AGGREGATE REACH BY MOVING AGGRESSIVELY INTO DIGITAL (EVEN IF
AUDIENCE MONETISATION HAS BEEN CHALLENGING). MANY OTHERS
NOW HAVE THE POTENTIAL TO DO SO.

 REDUCE DISPARITY SAMPLE OF DAILY TITLES AGGREGATED AUDIENCE GROWTH/DECLINE
OF AUDIENCE REACH Title Newspaper 2001 Newspaper
and online 2011
% Difference
 Wide disparity in the
The Scotsman 212,277 553,492 160.7%
Group’s total audience
reach (print and online) The Yorkshire Post 217,392 316,665 45.7%

over last 10 years The Halifax Courier 69,807 62,932 (9.8)%
Northants Ev.Telegraph 94,913 76,208 (19.7)%
 Best practice/
benchmarking to reduce SAMPLE OF WEEKLY TITLES AGGREGATED AUDIENCE GROWTH/DECLINE
disparity across portfolio
Title Newspaper 2001 Newspaper % Difference
and online 2011
Lynn News 69,926 77,407 10.7%
Bury Free Press 77,664 81,562 5.0%
Print audience represents average issue readership The Burnley Express 53,167 52,807 (0.7)%
Online audience represents non-duplicated print and
local online audience. N.B. Local online audience Stamford Mercury 55,620 50,340 (9.5)%
typically represents c.50% of website trafficTotal
Audience Study 2010; JICREG Dec 2011 and Oct 2001 Milton Keynes Citizen 164,012 117,950 (28.1)%



WHY RELAUNCH? Extend best practice consistently across

CROSS PROMOTE the portfolio through the re-launch of all
titles.

RE-LAUNCH WILL FACILITATE
INCREASED CROSS PROMOTION
FROM PRINT TO ONLINE THROUGH
EXTENSION OF BEST PRACTICE
Cross promotion plans include:
 Use of social media including
Facebook and Twitter
 Own blogs and forums
 Driving traffic to increased
online photo content - for sale
(e.g. local football matches)
 Driving traffic to local offers
(e.g. DealMonster)



WHY RELAUNCH?
DRIVE ONLINE TRAFFIC
Web traffic: print circulation for daily titles
SIGNIFICANT OPPORTUNITY
TO INCREASE WEEKLY WEB
AUDIENCE THROUGH CROSS-
Average: 58%
PROMOTION OF DIGITAL
CONTENT AND SERVICES
0% 20% 40% 60% 80% 100% AND BY INCREASING USER-
Daily web unique users as a percentage of print circulation GENERATED CONTENT ON
Source: Daily web users represent Q3 2011 average; Print circulation represents January-June 2011 web statistics; ABC THE PLATFORM
Web traffic: print circulation for weekly titles
RELAUNCH INITIATIVE WILL
ALSO DRIVE CHANGES IN
WEEKLY EDITORIAL PROCESS
Averag e: 9%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% RESULTING IN INCREASED
Daily web un ique users as a p ercentage o f p rint circulation
VOLUME AND FREQUENCY
Note: Daily web users represents average daily web audience January-December 2011; Print circulation represents average weekly sales weeks 27-49
Source: 2011 Management; webtrends OF DIGITAL PUBLISHING



WHAT WILL RELAUNCH INCLUDE?
 New designs for all titles
NEWSPAPER REDSIGN  Working with a leading international newspaper
design agency: fresh, clean, strong web x-promotion
 5 daily titles due to relaunch as weekly publications
on May 28th 2012
FORMAT CHANGES

 Introduction of ‘digital first’ workflow
NEW EDITORIAL WORKFLOW  Editorial staff increasingly engaged with digital audience
 More central control over page design and production
 Resegmented portfolio based on socio-economic profile
BEST PRACTICE CONTENT  Tailored content according to segment
 Content guidelines based on best performing titles
 Align relaunches with Sales Effectiveness implementation
ENHANCED ADVERTISER  Improved national advertising capacity
PROPOSITION  New packaging of digital inventory with print display



RELAUNCH –
SIZE OF THE PRIZE
MARGIN OPPORTUNITY c.£6-8M
PRICING: 165 titles in Relaunch * circulation * price increase ranging from 5p-25p

VOLUME: 165 titles * average % circulation increase

COST SAVING: lower production costs and headcount in weekly formats

ADVERTISING SALES: new accounts and increase in national sales

ONE-OFF COSTS c.£2M
DESIGN: £250k

PROMOTION: investment relative to margin opportunity

38


RELAUNCH
– KPI’s
ADVERTISING
NEWSPAPER SALES AUDIENCE WORKFLOW EDITORIAL
SALES
 Circulation (volume,  Total sales  Aggregate audience  % of print content  UGC as a percentage
£ vs. budget) (£ v budget) (print readers + uploaded to digital of total content
 Print subscriptions  New accounts unique users)  % of editorial staff  Application of
(% of total sales) (% of total)  Digital traffic - engaged in direct content toolkit
 Bundle  Increased account number of unique digital audience
users interaction
subscriptions* value (% total)
(% of total sales)  Mobile traffic -  % of content that is
 Cross-platform sales
number of unique multimedia (photos,
*where sold /digital sales (%, £)
users audio, video)
 National sales
 % audience  Adoption of fixed
(£ vs. budget)
transacting beyond page templates
 Average online cover price
CPM (£)
 ARPU (Average
 Use of standardised revenue per user)
ad shapes (%)
 Customer churn (%)


Execution Plan Step 3: Accelerate Digital Strategies

ACCELERATE
DIGITAL
STRATEGIES

MIDLANDS THURSDAY 16 FEBRUARY 2012 13:58
Stacy Thomas looks through the Selby Times classifieds in her lunch hour



FOCUS
ON LOCAL

DIGITAL STRATEGY  135,000 local articles published
Local
Local
per week across JP portfolio
ANCHORED AROUND Classifieds
audience/
display
 Websites functioning as Local
UNIQUE LOCAL community portals – platform
(£££) Content, (£££)
CONTENT for community information News &
Sport
sharing, access to local
INCREASINGLY information and data
INCORPORATING  Depth of local content and
SOCIAL MEDIA AND trusted local media brands
Local
creates protection for local
LOCAL INFORMATION digital advertising: Offers &
UTILTIIES − Local classifieds Services
(£££)
− Local display advertising
− Local offers and commerce



FOCUS ON
MOBILE
OVER 20% OF ALL OUR
WEB SITE VISITS ARE
FROM MOBILE DEVICES MOBILE VISITS - % OF ALL VISITS
 Mobile users are typically
younger and heavy social
media users
 Rollout of mobile sites as part
of Relaunch programme will
significantly increase mobile
traffic
 Mobile searches are locally
focused and transaction-
oriented – offering excellent
location-based advertising
opportunities



FOCUS ON
SOCIAL SOCIAL MEDIA INTEGRATION – EXAMPLE OF PAGES
PER VISIT BEFORE AND AFTER IMPLEMENTATION
 Offering the facility for user content
and social media on local newspaper
websites enhances the value
proposition for the local consumer
 The social platform on our newspaper
websites will be integrated with
Facebook and Twitter:
– Increase volume of page impressions
by aggregating relevant content
from major social networks
 Implement Pluck social media to
establish active online communities



MAXIMISE
ONLINE YIELD
INCREASED ‘DWELL TIME’
ON INCREASED CONTENT =
INCREASED REVENUE

PV * STR * CPM = £ONLINE YIELD
PV: ‘PAGE VIEWS’, VIA WEB, MOBILE, APP – MORE CONTENT,
MORE SOCIAL ENGAGEMENT, MORE X-PROMOTION
STR: ‘SELL THROUGH RATE’ (PERCENTAGE OF PAGE
INVENTORY SOLD FOR ADVERTISING) – BETTER
PACKAGING WITH PRINT
CPM : ‘COST PER MILLE’ - CHARGE PER THOUSAND PAGE
VIEWS – BETTER ‘BRAND’ SELL, AND BETTER AUDIENCE
AND BEHAVIOURAL TARGETING (LOWER REMNANT %)



MAXIMISE
ONLINE YIELD
ONLINE DISPLAY  National display opportunities
INITIATIVES – Substantially increase revenue
ACCELERATED – Partnering opportunities for premium CPM – over double rate
 Display advertising targeting products
– Partnering with Grapeshot - develop content targeting
– Contextual advertising increases click through rates by 75%
and has 20% higher CPMs
– Develop comprehensive CRM database to record website usage
patterns for profiling
 Roll out mobile sites
– Partnering with YOC - the leading mobile technology and
media provider in Europe - typically achieves CPMs of £8-12


Strategic Review

BUILD OUT
ADVERTISING
VERTICALS
 Roll-out of DealMonster
– Online voucher model - leverage local
audience, media, sales forces and advertising
relationships – share of e-commerce

 Increased monetisation of jobstoday.co.uk
– launching online recruitment telesales unit
/online only field sales team

 Further partnering initiatives to extend
online classified business
– Partnerships in key classified verticals
established in recent years – advanced
negotiations on motors partnership



Reaching the tipping point

 Jobs may well reach 50% revenues from digital by end of 2012



CREATE CONTENT
VERTICALS
BUSINESS MODEL WHICH VERTICAL MARKETS?
HIGH CREATE MULTIPLE REVENUE
STREAMS THROUGH
▪ Annual UK consumer spend in
excess of £500m
MARGIN PARTNERSHIPS ▪ Significant secondary spend
(e.g., sports betting)
DRIVE BRAND AWARENESS ▪ High volume of differentiated
AND AUDIENCE THROUGH Johnston Press local content assets
OWN MEDIA
▪ High level of associated social
media activity
LOW AGGREGATE EXISTING
CONTENT ASSETS TO CREATE ▪ No existing dominant provider
COST LEADING VERTICAL SITE


Execution Plan Step 3: Accelerate Digital Strategies Currently running several successful small business awards schemes

EXAMPLE VERTICAL: PARTICIPANTS
ISLE OF MAN
1200
WIGAN
1400
SME PORTAL & AWARDS ANNUAL REPORT £100K £50K

SMALL BUSINESS
POTENTIAL TO CREATE ESTIMATE THE ANNUAL
AWARDS SCHEME
AWARDS SCHEMES INCREMENTAL PROFIT
IN 50 OTHER REGIONS POTENTIAL OF £5M
HIGH-MARGIN
ADVERTISING VALUE
ADDED SERVICES NETWORK OF LOCAL AWARDS


Long term relationships
Packaging online and print
50 CAN BE DEVELOPED INTO A
 Display advertising NATIONAL AWARDS SCHEME
Resell online search

 ‘Through-the-line’ ATTRACTING MAJOR SPONSORSHIP
marketing
WHY  Established commercial relationships with small
businesses
BUSINESS SERVICES US?  Marketing and events capability
(VIA PARTNERSHIPS)  High volume of small business content and coverage
 Legal services  Legitimacy:‘ orchestrator’ of local
 Accounting business community
 Software



HIGH
POTENTIAL WHY US?
VERTICALS  All our newspapers produce masses of
content across each of these areas,
every day and week of the year
 Already do competitions in print for
all these areas
 Already do wedding, pet, outdoor
pursuit, parent-to-be exhibitions
 Established commercial relationships
IN DEVELOPMENT… NEXT IN LINE… with small businesses

 Entertainment Guides  Wedding Events  Marketing and events capability
and Listings  Pet Shows  High volume of small business
 Local Football content and coverage
 Outdoor Pursuit
 Archive photos Expos  Legitimacy: ‘orchestrator’ of local
business community
 Mother & Baby shows
& competitions



IMPACT OF DIGITAL
ACCELERATION
ONLINE DIGITAL
25 200
AUDIENCE REVENUES
(millions) 20 150
15 100

10 50

5
2010 2011 2012 2020 2008 2011 2012 2015 2020

DIGITAL
10
ARPU (£)

5

1
2008 2011 2012 2015 2020


ExecutionReview
Strategic Plan Step 3: Accelerate digital strategies

WORLD CLASS DIGITAL
MANAGEMENT TEAM
Four key appointments in last 18 months:

DIGITAL & BUSINESS MANAGINGDIRECTOR, DIRECTOR, DIGITAL MANAGING DIRECTOR,
DEVELOPMENT DIRECTOR DIGITAL CLASSIFIEDS PLATFORMS DEALMONSTER
 Joined September 2010 -  Joined March 2011 -  Joined June 2011 - digital  Joined August 2011
previously acted as digital classified business - content across entire
General Manager of The particular focus on online portfolio - future  Held Managing Director
Scotsman Publications, recruitment development of mobile roles at Anglia
Managing Director of JP and other platforms Newspapers, Yorkshire
Ventures and Group  Over 15 years’ experience Regional Newspapers,
Business Development in online media space -  Previously at BBC - Social KCOM Group, Kingston
Manager formerly CEO of Media Editor BBC News, Communications. Former
fish4.co.uk and Managing BBC Sports - Interactive Head of Internet Strategy
 MBA from INSEAD Director of Monster.co.uk Sports News Editor, at BT Worldwide and IT
Development Editor, Manager and Head of IT
Sports Editor Business Innovation at IPC
Magazines


Execution Plan Step 4

EXPLOIT
TECHNOLOGY

SCOTLAND AND NORTH EAST MONDAY 13 FEBRUARY 2012 06:30
Andrew Stewart starts his commute reading the latest business news in The Yorkshire Post


Execution Plan Step 4: Exploit Technology

SYSTEMS AND TECHNOLOGY GREAT POSITION TO
REAP THE BENEFIT
INVESTMENT HAS
TRANSFORMED PRODUCTIVITY
INDUSTRY LEADING INVESTMENT CENTRALISATION WITHOUT WHILST ALWAYS
IN PROCESS TECHNOLOGIES UNDERMINING OUR LOCAL MAINTAINING LOCAL
 Single customer relationship CORE CAPABILITIES DISTINCTIVENESS
management system –
know every touch-point  Single call centre  Journalists on the
of the customer  Single editorial hub ground in every local
 Single templating system – market
allowing consistent  Local sales teams,
advertising placement complemented by
 Single content management national sales skills
system – providing ease of
content reuse, aggregation
and editorial hubbing


Execution Plan Step 4: Exploit Technology

SYSTEMS AND TECHNOLOGY AND THE JOURNEY
IS CONTINUING…
INVESTMENT HAS
TRANSFORMED PRODUCTIVITY
Announcing today new partnerships

 In addition to our established relationship with Microsoft


Towards 2020

SUMMARY

NORTH FRIDAY 9 MARCH 2012 14:00
Daniel Mayer catches up on the latest sport news whilst waiting for a train


Summary
COST LEADERSHIP AND
PRINT REVENUE
NEW
STRATEGY
Maintain industry
leading cost leadership ACCELERATE EXISTING
position
Remain profitable
DIGITAL STRATEGIES
Ensure the business Increased cross
remains agile and promotion and volume
flexible to take will provide an
advantage of future enhanced digital
Vision opportunities RESULTS IN offering, RESULTS IN
increasing page views
Johnston Press provides RE-LAUNCH ALL TITLES More valuable, relevant Content and social Transformed
trusted local media print proposition media revenue base
platforms serving the Synergistic web offering to also increase the Digital revenues
needs of consumers and Increase newspaper with increased content value of the online planned to increase
advertisers, delivered revenues via cover proposition, increasing from £19m in 2011
online and in print, price increases Mobile platforms e.g. consumption
iPad, Smart phone apps (5% share of the Group’s
improving the quality of Re-engage with revenue base) to £52m
local community, Transform CPM
audiences Other offerings e.g. by 2015
lifestyles and vouchers, discounts Maximise yield
commerce.  Improve understanding Sustained cost
of existing audiences leadership position
 Appeal to new CREATE NEW VERTICALS
audiences
Re-engage with
advertisers Generates new revenue
streams for low
Increase cross- incremental cost
promotion to digital
Diversifies out of core
Increase overall value
proposition local news &
information offering
Drive subscriptions


Summary

FINANCIAL PATH TO 2015
AUDIENCE Users (m) 20 PRINT 355
£’m 350
(PRINT & ONLINE) REVENUE 300
300
INCREASING 15 16
STABLISING

10
10 200

5 100

2011 2015 2011 2015

DIGITAL ARPU £ 5 5.00
DIGITAL £’M 80
RISING REVENUE 52
4
MULTIPLYING 60
3
2.30 40
2
18
20
1
2011 2015 2011 2015


CONCLUSION
1 2 3 4
INTEGRATED SUCCESSFULLY NEW GROWTH INDUSTRY
PRINT + DIGITAL COMMERCIALISING FROM NATIONAL LEADING COST
MEDIA: LOCAL, DIGITAL AUDIENCE VERTICAL BASE AND
SOCIAL, MOBILE (ARPU) BUSINESSES GROWING
MARKET VALUE
DIGITAL PRINT
£25.00
£10.00 (£200m
(£200m/ revenue/
20m users) 8m users)

2020


Johnston Press' trasformation strategy

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