City Magazine was founded 1986 to tell stories about the great places
to visit and key events in big Cities. It focused very much on
restaurants, lifestyle and night life in the city of Helsinki,
Finland. It is a key part of Helsinki’s media history, an icon.
In 2012 I was on the board of the media company Lehtiyhtymä which was
publisher of 21 local news papers. City Magazine was offered to
Lehtiyhtymä to be bought but Lehtiyhtymä didn’t proceed for 2 reasons:
1) Print was not profitable and in decline
2) The digital side of the business was small (only 100k euros).
For me I saw the 100k digital revenue as a great platform and I knew
how I could accelerate the growth. It was clear there were unexplored
revenue streams and big opportunities to growth the brand. City
Magazine is very well known brand in Finland. I was really interested
so I asked if I could buy City Magazine and I was given the permission
to continue with the acquisition process privately. Only a few months
later I was the very proud owner of the legendary City Magazine. There
were so many rumors spinning about how long it would last, what would I do. My plan had three foundations:
- Focus 100% on the digital business
- The power of content
- Company culture.
Long story short, four years later, we were nominated on the Deloitte
Fast 500 as the 2nd fastest growing company in Finland and we were
recently listed 10th fastest growing Media Company in Deloitte Fast
500 EMEA competition. We are turning over 3 MEur revenue on a yearly
basis.
We have been working very hard with this turnaround case and now we
are back on our mission to tell stories about the awesome restaurants,
places and events in big cities and the growth speed continues
(revenue +2367%) and we are healthy and profitable too.
Was it a difficult decision to close the print element of the business? Was there any backlash?
The print business on City Magazine was not profitable so it was just
good business for me to make that decision. Naturally I really cared
about the brand, I love this brand (!) and of course I wanted to
ensure I listened to what people who also loved the brand wanted. Its
survival was and is based on digitization. This will allow the brand
to live on in the long term.
Originally, City Magazine’s print edition was delivered to restaurants
and key spaces in Helsinki so it was very visible for people. When we
moved to 100% digital, the brand was not that visible on physical
places anymore so we had to to underline that “we still exist” and we
are digital. We even changed name to City Digital Ltd to underline
that we are digital.
The strong print history had help build great brand awareness but the
same history had made City’s business culture quite difficult to
transform. This is in fact pretty usual when going through a
transformation of this kind.
We had to do lots of work internally and externally to convince that
this business could be a digital success. As part of that we employed
a research company to audit how our campaigns work because we wanted
to convince ourselves and our buyers that our mission of
transformation was right. We wanted to be absolutely sure. The
research came back really positively. So, we pushed forward with our
new full digital campaigns and through testing and experimentation we
finally learned that actually our new campaigns performed better and
we could track them carefully through digital data tools.
It was an incredible journey, but mostly I am grateful to our readers
and clients who came with us and are more engaged than ever.
What tactics did you use to grow the business digitally in terms of readers/subscribers etc?
In digital media being relevant and in the right place at the right
time is everything.
We believe in multi-channel marketing. For our digital teams this
means articles on city.fi – eat.fi – tableonline.fi – email – social
media
and data based advertisement network reach on desktop and mobile ads.
Sometimes we also use location based, in-restaurant advertisements
when we run events.
We are a “free to read” medium so we don’t charge customers a
subscription fee. Our business models are based on our business
strategy. We are a PaaS (Platform As A Service) company. This means
we:
– Measure € that we can generate for our customers.
– Track article read-time and native ad view-time because we want to
underline the quality of journalism and time spent.
– Look carefully at actions like payments, reservations and clicks to
optimize relevancy and improve the services.
– Forecast Customer Acquisition Cost vs Customer Lifetime Value
And what monetisation strategies do you adopt? Why do you think that they have been successful? What are the key issues you overcame?
City Magazine’s mission is to help people find awesome and
“relevant-to-me” experiences in the City. We have always been in touch
with restaurants so we have been looking continuously for new revenue
streams in the restaurant business. We looked and searched for new
revenue streams in a structured lean startup build-measure-learn
feedback loop.
– First we tried to sell more display ads but reaching more readers
did not scale fast enough so we learned that we have to scale up
impressions dramatically and we established an data based
advertisement network. The amount of impressions grew from 5M to 160M
monthly. It was amazing.
– Second lesson was that our restaurant customers wanted to see people
in restaurants so we had to deliver real results. We organized new
campaigns for restaurants, and that gleaned great results with some of
our restaurants being fully booked 6 months out!
– Thirdly, we realized that in the digital world we have to be
interactive. We recognized that we have to give voice to our readers.
So, we acquired a restaurant portal software which allowed our readers
to rate, review, interact and discuss their experiences. We have to be
the most relevant source for restaurant information and, of course,
while journalists bring big value to the review space, by giving this
power to our readers too, we can be super relevant and real time.
– A fourth and key finding in our build-measure-learn cycles was that
we need to be more interactive with the restaurants themselves.
Restaurant articles about “5 new restaurants in City” was just not
enough. We had to provide people tools to interact with restaurants
directly from these articles. As always, we moved fast and acquired
the leading table reservation
company in Finland. Now, we make the experience seamless for our
readers, by driving reservations to restaurants directly from
articles. We also combined this with our rating system so we receive
relevant reviews in real time.
Was adopting a startup like approach central to the renewal of the business? How did this work out in practice?
Lean Startup methodology is simple in my mind and I stay pure to two
foundations:
1. Build-measure-learn. We built many Minimum Viable Products and we
went quickly to learn from real buyers about our products to hear,
measure and act on feedback. With this feedback we:
a) either quickly closed down the product and evolved a new one.
b) or improved the product based on feedback and optimized.
2. Accept fast failure and be ready to try different product solutions
and learn constantly. For example, we noticed that even what we
thought were our best ideas can fail. We can never truly predict how
customers will react to new ideas and product so best way to find out
which product is successful is to go out there and talk with your
customers. Learning with real customers is best way to improve
business. Be humble, listen and react quickly.
Do you think it is difficult for established media companies to adopt a start up style approach? What advice would you give publishers in this situation?
This is what I call the “magnificent seven”. It is tough to stay true
to these, but in doing so it will help you transform:
1) Accept that failure is an awesome place to learn something
2) Invest fast and fail fast if investment does not bring you traction
3) Always improve and push forward. Don’t look back.
4) Be ready to leave old business models behind – new business models
may disrupt your old business and if you don’t do that, someone else
will
5) Show your team that you want growth. Empower them and take them with you.
6) Implement and accelerate build-measure-learn innovation cycle
7) Never give up
How important do you think acquisitions have been to the growth of your business? How have you integrated the businesses you have bought into your company?
We have successfully completed four acquisitions in four years. 50% of
those failed but it’s always important to remember:
– Failure is opportunity to learn something new.
– That for every failure there is a success; two of these
acquisitions have been very successful and our teams from the
original City plus acquired companies are more innovative together.
– Acquisition can be good source to find innovative people and
innovative business models.
– Our best integration brought one acquired company 109% growth
year-on-year through co-marketing.
What advice would you give to media entrepreneurs in other European cities? In other words what lessons have you learnt from City Magazine?
Digitalization is huge opportunity.
Now you can radically transform your media business into successful
global business. You don’t have to hold onto your traditional market.
There are billions of new people you can serve with smart
digitization.
Implement a build-measure-learn innovation loop and give new
businesses an opportunity to happen.
If you want to try our methods in the restaurant business, we can help
you to implement those with our findings and Restaurant advertisement
Platform for Media. We’d be delighted to help, because we are in the
innovation and digitization business. It’s our passion.
Read More: Eat And The City – PaaS for finding Pearls of your local City