Category Archives: Data science

Sanoma’s digital transformation gains momentum

Sanoma House in Helsinki

Sanoma House in Helsinki

Last week Sanoma announced the FY2013 results. To be frank they were mixed, with online and mobile sales growing but print media in decline. The vocabulary turned classical: annus horribilis, Utopia, and per angusta ad augusta, could be heard in English, Finnish and Dutch conversations during the week. As is often the case with mixed signals, the good news has been somewhat drowned out by the more negative headlines throughout the year.  Yet Learning had a good 2013. And after a slow start to the year the overall digital platform has gained momentum and performed particularly strongly in the final quarter.

I always find it tricky blogging about financial results given that Sanoma is a listed company. But now that we have announced the results, I’d like to call out a handful of highlights on digital in Finland, The Netherlands, Learning and early stage innovation at Sanoma in 2013, drawing on the published materials.

As a reminder, the core strategy of Sanoma rests on three pillars: i) connecting consumers with content and brands, anywhere, anytime; ii) delivering powerful marketing opportunities to advertisers through our reach and consumer insight; and iii) providing personalized digital learning solutions to pupils and teachers.  Digital is clearly an integral part of that strategy.

Finland

Our share of the online media market grew by 5%-points to almost 40%.  Our online advertising revenues grew by 18% over the previous year and digital consumer sales grew by almost 30%. Digital subscriptions at Sanoma’s single biggest brand, the newspaper Helsingin Sanomat, grew by almost 40% to 160,000 (on a total of about 355,000). Furthermore, digital sales at our second biggest brand Ilta-Sanomat grew by about 40%, whereby digital revenue gains now appear to be exceeding print losses; this terrific performance also secured a lead for Ilta-Sanomat over Iltalehti in terms of visitors. We also saw early success at magazines with the Donald Duck library reaching 12,000 subscribers.

Our market-leading position in recruitment got even stronger and we regained leadership in terms of visitors in real estate.  Finally, we made a great start with e-commerce service MSO.fi with more than 120 retailers already on board.

We have seen strong growth in usage via mobile devices and of online video and this is where we have registered our fastest growth.  By the end of 2013, over 50% of all pageviews on our Finnish network came from mobile devices, with mobile visitors growing by over 100% and pageviews by close to 150%.  Correspondingly, mobile advertising sales grew by around 180%Online video advertising sales grew by over 30% and the weekly reach of video platform ruutu.fi by 25%.

The Netherlands

comScore ranks Sanoma #4 of the big 5 in The Netherlands with 8.1 M unique visitors (MUV) in December 2013  – behind Google, Microsoft and Facebook (12.7, 10.7 and 9.9 MUV, respectively), but ahead of eBay (6.6 MUV). Other Dutch media groups are also represented in the top 20, but lack the reach of Sanoma. The state-subsidised NPO, and privately run TMG, De Persgroep and RTL Groep, registered a reach of 6.2, 5.3, 4.7 and 4.4 MUV respectively in December.

NU.nl, the leading news site by visitors and strongest media brand in The Netherlands and a cornerstone of Sanoma’s digital network, further strengthened this position in 2013 delighting readers with more than 10.000.000.000 pageviews, almost exactly 50 per inhabitant per month! Pageviews have more than doubled in the last three years and in the meantime more than 75% of views are made from mobile devices.  NU-apps have been downloaded more than 5 M times so far.

In common with Finland, video also grew strongly (about 40%) totalling 152 M at video platform zie.nl.

Lindanieuws.nl – an extension of the highly successful magazine brand Linda. – came with a new version that resulted in a tripling of the number of visitors to 1.2 M and a doubling of advertising sales.

Digital sales via automated trading increased by almost 25% – a serious money-maker for our digital network.  Our performance-based business had a solid year. In particular, sales at the recently acquired FashionChick doubled, partly driven by international expansion. The introduction of curated search at directory Startpagina.nl has been a runaway success and one of the most rapidly growing digital product innovations we have made in recent years. Net sales of e-commerce service SBC grew by 25%, with sales of home deco performing particularly well with a growth of nearly 50%, And soft launches of new brands leef.nl (health) and yixx.nl (jewellery) and of the international launch of price comparison site kieskeurig.nl in France and Poland have helped to ensure a healthy pipeline of new business lines that we expect will support the growth of the performance-based assets in the coming years.

Learning

At Learning, there are also good data to evidence our progress to a more digital future. Much of this relates to bringing content to life by making it more functional through digital. For example, in The Netherlands, more than 1,000,000 pupils in primary education work with Malmberg’s software, reaching 60% of all schools.  In a single week in November, more than 1,000,000 exercises were made on homework platform Bingel.be in Belgium. And in Finland, teachers and pupils logged into Sanoma Pro’s new learning environment 1,900,000 times, with 768,000 hours of active use. In the meantime 800 e-books have been published in Sanoma’s five Learning countries on the BookShelf platform provided by Young Digital Planet.

In addition to transforming its core business, Sanoma Learning is working on providing learning services to the home market with a new online tutoring proposition for mathematics: StudySteps. This has been soft launched in Belgium and The Netherlands, tested in Poland and Russia, and the first results are promising, with 110,000 exercises made in the test period.

Furthermore, Sanoma Learning is exploring the possibilities to build a position in emerging markets and has amongst others made an agreement with the People’s Education Press to provide digital services to support the provision of e-learning in China. It’s early days, but there is clear demand for Sanoma’s high quality Learning capabilities abroad.

Innovation

SanomaVentures had an exciting year, receiving over 400 requests from external startups, which ultimately resulted in 9 investments, bringing the total to 15 to date.  In aggregate the business/financial performance of this portfolio has been promising and these ventures currently employ over 161 people. We expect to make a similar number of new investments this year.

Building on the success of the series of in-house innovation accelerators, we have now launched an Innovation Lab to foster the ventures that are borne out of the accelerators and as a test ground for new ideas from the core business.  We currently have a full pipeline of concepts, prototypes and early stage ventures and have set ourselves the goal to have established five ventures in the next 3-5 years that have an annual revenue potential of € 10 M+. In 2013 we ran four accelerators (Content, Commerce, Talent and NU-lab), two of which were open to external participation. Through these accelerators we trained about 500 Sanoma employees on the lean development methodology and created 15 functional prototypes, about half of which have been given seed funding for further customer validation.

Finally, we have significantly increased our investments and human resourcing on data science including hiring a team of 20 data scientists last year to boost our analytics and insights capabilities across Sanoma. We are currently working on developing the common “big data” enablers, as well as specific cases on consumer sales, online advertising and new business models. We expect to make a quantum leap in our insights capabilities in the coming years.

Good progress on the journey

Overall, reflecting on the three pillars of Sanoma’s strategy i) connecting consumers with content and brands, anywhere, anytime, and ii) delivering powerful marketing opportunities to advertisers through our reach and consumer insight and iii) providing personalized digital learning solutions to pupils and teachers, I believe the highlights above show that digital has made a big contribution in 2013 to progressing this strategy. Respect to the teams who have made this happen and thanks for your hard work!

Advertisements

Sanoma Digital to boost transformation on three fronts: growth, innovation and capabilities

nu-labSanoma recently announced the planned launch of Sanoma Digital as part of an overall accelerated transformation program.

We see many opportunities in digital and have in the meantime built a substantial and growing digital business.  We intend to boost digital by creating this new business unit which will focus on pure-play digital assets in consumer media in Finland and The Netherlands, and will include brands such as oikotie.fi, NU.nl and kieskeurig.nl.  Digital brand extensions such as hs.fi and libelle.nl will be run directly by Sanoma Media Finland and The Netherlands. Sanoma Learning will drive all Learning activities.

Focus

A core element of the overall transformation program is to bring more focus to the business and to ensure that each part has a clear mandate and objectives.  This also holds true for Sanoma Digital.  Growing and innovating pure-play digital businesses in consumer media is a different assignment than transforming a portfolio of magazines, winning viewers for television, taking newspapers to their next level or building digital workflow solutions for learning.  Each of these assignments needs dedicated management attention to focus on making it happen.

Digital enjoys a unique role within the portfolio and will for that reason also work very closely with the other platforms to enable cross-media solutions for consumers and advertisers – shared sales, insights & analytics and ICT teams will help us to achieve that.

Goals

Sanoma Digital will have three main goals:

  1. The first goal is to growgrowthWe intend to significantly grow the digital consumer media business in the next 5 years. Part of that growth will come from working closely with the local business in Finland and the Netherlands, including adding new verticals, new media (mobile and video) and new services to our performance-based (lead-generation, e-commerce, online classifieds) and pure-play digital content businesses. Another part of the growth will come from scaling successful concepts created in The Netherlands and Finland to new markets.  We have been investing in the early part the product pipeline recently with quite some new launches in the final quarter this year.  We expect this to bear fruits during the course of the coming years.
  2. The second goal is to boost innovation and to strengthen skills across the organisation on lean development methods. Commerce-Accelerator-logo To achieve this we will establish a new innovation lab which will nurture the winning concepts borne out of our ongoing series of innovation accelerators.  Furthermore, we will continue to invest in external digital enterprises via Sanoma Ventures. We want to fill the pipeline with new business lines – to plant the seeds of the next generation Sanoma.
  3. The third goal is to strengthen our capabilities on data insights & analytics. We will bundle our resources on insights and analytics, boost them, and deploy them across Sanoma, to help the whole company to succeed in the digital transformation.

Positive outcomes

From the perspective of digital, we hope this will position us to better serve our customers. If we are successful, we will grow digital and this should help us to provide attractive new opportunities for employees and improved returns for shareholders.

Two passions

From a personal perspective, my next assignment is to establish Sanoma Digital. I’m excited about this and believe setting up Sanoma digital is a good step to boost the digital transformation. We’re now in the process of setting up a new team to drive this agenda.  I’m really proud of the talented people who are joining this team and who will work at Sanoma Digital!  During Q1 next year I will succeed Jacques Eijkens as CEO of Sanoma Learning.  My two passions are digital and learning.  Sanoma has a strong and successful international Learning business that is also going through a digital transformation.  I hope and believe that I will be able to contribute to the further success of Sanoma Learning by boosting the leadership of digital and innovation there.

Sexiest Job at Sanoma: Data Scientist

During a recent webinar I gave about our strategy, Lassi Kurkijärvi (Director of Innovation & Development) was voted to have the sexiest job at Sanoma. This victory was by a comfortable margin, getting about twice as many votes as the second placed “my own job”. I agree that our Mobile Superhero has got a hot job. However, in my view, the sexiest jobs at Sanoma in the next few years will be those of the Data Scientists.

I realize not everybody will share my view and I am arguably biased due to my background (a lot of Bioinformatics in my PhD). Yet I believe there’s a big opportunity for us to be even more relevant to our customers (and make more money) by providing them more accurately with the right content and functionality at the right time, on the right medium and device and for the right price. (By customers, I mean consumers of media, advertisers, learners and teachers).

To do this, we have to make a quantum leap forward in our insights and analytics capabilities. This week I caught up with our Queen of the Quants – Ulla Kruhse-Lehtonen (VP, Customer Insight and Analytics) about insights and big data at Sanoma. She’s a brilliant addition to my team, fun to work with, fast, determined and has the brain the size of a planet. She’s building our new team and co-developing the cases with the business owners.

Ulla Kruhse-Lehtonen, VP Customer Insight & Analytics and Queen of the Quants at Sanoma

Ulla Kruhse-Lehtonen, VP Customer Insight & Analytics and Queen of the Quants at Sanoma

Ulla, why did you decide to join Sanoma?

I was immediately intrigued when I heard about the opportunity. Having always been an avid reader and a magazine buff, I was fascinated by the chance to work for a company whose business is storytelling. At Sanoma, I can combine my love for stories with data science, which is my other passion.

I’m excited by Sanoma’s wealth of consumer data and the business opportunities it provides. The media industry is currently undergoing a fundamental transformation from print and broadcasting to digital. Consumer analytics is at the centre of the transformation. Modern data mining, visualization, and machine-learning techniques provide us with strategic and operational insights as well as targeting and personalization capabilities for our current and future products and businesses. Data science helps us create unique, relevant and exciting experiences for our customers.

How is Sanoma rolling out the new data science capabilities?

The new capabilities are used to optimize consumer sales, target digital advertising, personalize services, and create strategic consumer metrics and other data-driven insights. The data science team develops the capabilities in close collaboration with the respective business and IT functions. Roll-out happens in stages. Only after verifying the performance of the new analytics capability through a pilot, will it be rolled out further. This helps us ensure the success of the new capability before making large-scale investments into technology and training people. 

We also aim at creating a culture of sharing and communicating of successes and failures in order to share best practices and learnings across units.

What is the most critical factor for making a Big Data initiative successful?

The most critical factor is to closely align data, insights and analytics activities with the company’s business strategy. It’s easy for an analytics team to keep itself busy with interesting and challenging, yet irrelevant matters. Once Data Scientists thoroughly understand the business goals and logic, they will be able to translate them into data and analytics questions and come up with unexpected, sometimes unintuitive outcomes, which may have tremendous business opportunities.

At Sanoma, the executive-level support for analytics is extremely strong, which is one of the most pivotal matters for a successful analytics transformation of a company.

What are typical challenges in Big Data initiatives?

The technical effort related to the gathering, management and utilization of data should not be underestimated. The more silo’s there are, the longer it takes to gather and utilize data across the organization. It takes successful analytics companies several years to get it right. At Sanoma, our approach is to prioritize consumer and advertiser use cases and build up the technical enablers in a clear order. It is important to constantly deliver short-term business wins while building up the long-term infrastructure to support the company’s vision.

However, in the end, technology is money and hard work, but analytics is about people’s mindset and the willingness to do things differently. Unless analytics capabilities are taken into use and the results are acted upon, there is little point to build them in the first place.

You’re building a team of Data Scientists and other data experts. How’s it going?

First group of new recruits.  In the lift at Sanoma House.

First group of new recruits. In the lift at Sanoma House.

The recruitments are going quite well. We have signed on thirteen people in Helsinki and Amsterdam. Finding the right talent is critical for the successful execution of the analytics strategy. We need skilled people to create value out of data. In addition to Data Scientists, we have established the position of the Consumer Privacy Officer and the Head of Data Asset. We have also hired Big Data Developers and Database Administrators. The openings are no longer visible on our website as we are working through the applications, but if readers of this blog are interested in hearing more, feel free to drop me an email (ulla.kruhse-lehtonen@sanoma.com).

In September you will have been with Sanoma for a year. Still excited about the job?

Absolutely! It’s great to work with talented and skilled people and to develop the data science competency here. Data, analytics, and privacy are at the core of Sanoma’s transformation and reflect the consumers’ changing behavior. Data science is cool!

Looking forward >>

I’m with Ulla on that!  I love the creativity of a media and learning company. Putting insights to work is the next generation. This is what makes these jobs so sexy.

Looking further than Sanoma – the opportunity for societies to use insights derived from big data to improve quality of life (for example through better healthcare and education) and economic performance (for example through better allocation and targeting of resources and higher productivity) is substantial; the McKinsey Global Institute (MGI) estimates a potential for $ 300 bn of value creation per year in US healthcare alone.

USA is educating data scientists for the future

USA is educating data scientists for the future

However, the rate limiting factor in capturing this potential is in my view the availability of skilled Data Scientists. MGI estimates a shortage of 190,000 skilled data scientists and 1.5 m managers with sufficient analytics know-how in the USA by 2018. Probably the European challenge is of a similar magnitude.  In the USA we see Seattle (see e.g. the eScience Institute at the University of Washington and PhD program in Big Data) and New York (see e.g. the Institute for Data Sciences and Engineering at Columbia and Center for Data Science at NYU) contending with Silicon Valley to become the next hotbed for educating the data scientists of the future. 

We need more initiatives like this in Europe too. With a substantial opportunity gap on the one hand and European unemployment now estimated to be more than 26 m (with youth unemployment over 50% in some countries) data science is an area that should be prioritized for education and training. 

My advice to anyone considering education or training in data science as one of their options: go for it!  Not only will it be good for your chances of getting a job, it might even be a sexy one at a cool company like Sanoma!