SCHIBSTED MEDIA GROUP

FUTUREOUTLOOK 2015: CONSUMERS, TRENDS AND TECHNOLOGY REPORT

1 EMPOWERING PEOPLE IN THEIR DAILY LIFE

3 4 6,900 EMPLOYEES IN 29 COUNTRIES

SCHIBSTED AROUND ENGAGING ALMOST 200 MILLION PEOPLE* THE WORLD * Estimated total audience worldwide 5 6 8 Introduction: Rolv Erik Ryssdal, CEO at Schibsted Media Group DIGITAL TRANSFORMATION 12 Trend Report: The Internet of Things 24 Trend Report: Identified Web 16 Trend Report: The Democratisation of Smartphones 27 Trend Report: Advanced Data Analytics 20 Facts & Figures: Mobile World 30 Trend Report: Smart Devices 0010010010 22 Column Frode Eilertsen: At the Heart of the Future 32 Column Jens Hauglum: Champions of Innovation PUBLISHING 36 Column Jan Helin: Journalism – A Brave New Trade 46 Facts & Figures: Media Consumption 40 Some of our Successful Media Companies 48 Column Gard Steiro: Investigative Journalism 42 Trend Report: News Disrupted! 01010101134 44 Column Frida Lundh: Programmatic Buying CLASSIFIEDS 52 Column Alexandre Collinet: Sustainable Success 62 Column Valerie Coulton: Trends in Classifieds 54 Facts & Figures: Classifieds 64 Some of our Successful Classified Companies 56 Trend Report: The Next Billion Consumers 10011010150 60 Blocket: A More Sustainable World GROWTH 68 Trend Report: Most Enabled Entrepreneurs. Ever! 76 Some of our Successful Growth Companies 72 Facts & Figures: Entrepreneurship 78 Trend Report: The Sharing Economy 74 Column Miriam Grut Norrby: 82 Trend Report: Digital Natives Changing the World 00110101166 Partnering with Great Entrepreneurs

7 8 INTRODUCTION

WELCOME TO SCHIBSTED’S FUTURE REPORT

People have always tried to foresee or predict The Schibsted Future Report is an attempt the future. We are curious by nature. To always to gather and understand some of the digital look ahead, to gain knowledge, learn new trends we see today, and which we believe things and discover the world again and again will evolve further and impact users, readers is part of the big adventure of being human. and businesses in the years ahead. It’s also an From the very beginning, innovation and opportunity to get to know some of the great entrepreneurship have been defining features people of Schibsted and our companies. of the Schibsted Group. Today we are at the This year Schibsted marks its 175th anniver- very heart of the global digital transformation. sary. And what better way to celebrate, than What was once a Scandinavian media compa- to focus on the future and the opportunities it ny is today a truly international online player, can bring? Nobody can possibly know exactly creating and developing user experiences and what the future holds. Even wise Master Yoda business opportunities worldwide. We aim to from the iconic science fiction movie Star be a driving force in this transformation, in our Wars, admitted the difficulty of the task with industry and the societies in which we operate. his quote: “Impossible to see, the future is.” I believe that with this ambition comes a But we can have an idea. We can be curious. special responsibility, something born from We can embrace the change and express within our mission: “Empowering people in some thoughts and insight. their daily life,” to be a driving force in the And we would like to share those with you. digital transformation of society by providing digital consumers with innovative, high quality Welcome to the Schibsted Future Report. and user friendly products and knowledge. But also to realise that to succeed in the future we all have to be open, learn from ROLV ERIK RYSSDAL each other and share our insights CEO at Schibsted Media Group with partners and colleagues. YEARS IN SCHIBSTED: Since 1991 This is something that will em- FAVOURITE SAYING: I like Arsenals motto power not only us but also the “Victoria concordia crescit” (Victory through world around us. harmony).

9 10 Digital is everywhere: the Internet of Things, the rapid increase in smartphone use and big data are just a few of the developments that are fundamentally changing our world. DIGITAL TRANSFORMATION In this chapter, we take a look at this complex, rapidly changing landscape.

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Personal spaceships, intelligent robots, trips to the Moon and meals retrieved from a chute in the kitchen vending computer: there are few homes that currently enjoy this sort of Jetson lifestyle. But the Internet of Things (IoT) is taking us closer to this fantasy – and in ways the Jetson script writers could never have imagined. THE INTERNET OF THINGS While the Jetson house was packed with elaborate kit, all of it had to receive input from a person, and they could not communicate with each other. On this point, we’re already doing rather better than the Jetsons. Also, the Jetsons is set in 2062, so we have almost half a century to come up with personal spaceships. And when we do, they’ll be much smarter and connected than George Jetson’s was.

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The idea of the Internet of Things (IoT) is not new. It has been Such developments have made it possible to tag and recogni- or information – they’re based on things. You can’t eat bits, discussed for at least 15 years, when Radio Frequency Identi- se almost any object relatively cheaply, and have made pos- burn them to stay warm or put them in your gas tank. Ideas fication (RFID) pioneer, Kevin Ashton, posited the idea of using sible great advances in, for example, logistics and supply chain and information are important, but things matter much more. RFID tagging to optimise Procter & Gamble’s supply chain. management. And because smartphones contain near-field Yet today’s information technology is so dependent on data IoT refers to giving objects unique identifiers and organising communication reading capacity, it also has a large number of originated by people that our computers know more about them in an Internet structure. In everyday use, it is also often other applications. ideas than things. implied that these objects would have some sort of “smart” If we had computers that knew everything there was to quality, which captures, sends or receives information. When AN OLD FAVOURITE: FALLING COSTS know about things – using data they gathered without any help the IoT is covered in media, it is often following the launch of, Even more important for the development of the idea of the from us – we would be able to track and count everything, and for example, a smart light bulb that can be programmed (or smart home is the decreasing component costs that make it greatly reduce waste, loss and cost. We would know when learn) to switch on and off when you wake up/come home, or feasible to add connectivity to ever cheaper objects (such as a things needed replacing, repairing or recalling, and whether change hue according to time of day or your preferences. light bulb). Gartner predict that by 2020, component costs will they were fresh or past their best […]. We need to empower The idea of the smart home (also not exactly new) is pro- have come down to the point that connectivity will become a computers with their own means of gathering information, so bably the most pedagogically powerful example to illustrate standard feature, even for processors costing less than USD 1. they can see, hear and smell the world for themselves, in all the impact of the IoT. It is also an area where companies in Today, Philips Hue connected light bulbs retail at USD 60 each, its random glory. RFID and sensor technology enable compu- our industries invest. Before we consider their motivations for and most refrigerator manufacturers build connectivity into ters to observe, identify and understand the world – without this, it is useful to briefly look at the developments that have only their premium models. It seems reasonable to assume the limitations of human-entered data.” shaped the IoT and take a look at how it all works. that such costs will fall in the years ahead. Together, these downward cost developments in both ne- WHERE ARE WE HEADING? IoT AND NEAR-FIELD COMMUNICATION ar-field communication and Internet connectivity drive growth The application of IoT technologies will change the landscape One of the first technologies enabling the IoT is RFID – wire- in the IoT, which Gartner predicts to reach 26 billion units in in a number of industries. Companies are likely to make exten- less use of electromagnetic fields to transfer data to automa- 2020. The same year, they predict there will be approximately sive use of IoT technology, and there will be a wide range of tically identify and track tags attached to objects. When an 7.3 billion smartphones, tablets and PCs combined. What are products sold on various markets, such as advanced medical RFID tag enters an RF field, the radio signal powers the tag, the consequences of this number of connected devices – the devices, factory automation sensors and applications in indu- which therefore needs no power source of its own. The tag majority of which are on the web are not operated by humans? strial robotics, and sensor motes for increased agricultural then sends its ID plus a small amount of data (usually up to One explanation is provided by IoT pioneer Kevin Ashton: yields. There will almost certainly be automotive sensors and 128 bits). The reader will then send this data to a computer “Today, computers – and, therefore, the Internet – are infrastructure integrity monitoring systems for diverse areas, that processes it, determines an action, instructs the reader almost wholly dependent on human beings for information. such as road and railway transportation, water distribution and and sends the data back to the tag. Nearly all of the roughly 50 petabytes of data available on the electrical transmission. In consumer products, many catego- Over the past few years, RFID chips have become smaller Internet were initially captured and created by humans – by ries of connected things in 2020 do not yet exist. As product For marketers, the prospect of enriching the data available and much cheaper to make. An example is the Hitachi µ-chip typing, pressing a record button, taking a digital picture or designers dream up ways to exploit the inherent connectivity today with real physical data should be mouth-watering. What that is 0.4 X 0.4 millimetres square. It stores 128 bits, has a scanning a bar code. Conventional diagrams of the Internet that will be offered in intelligent products, we expect the data should be available to marketers will be an ethical and range of 1 foot, has an embedded antenna and is small enough include servers and routers and so on, but they leave out the variety of devices offered to explode. privacy discussion, but not a technical one – your refrigerator to put in currency. Something the European Central Bank most numerous and important routers of all: people. The pro- And all of these devices will create data streams. The IoT will know when you have run out of eggs, and your light bulb plans to do with its Euro notes, to replace serial numbers as blem is, people have limited time, attention and accuracy – all is set to vastly increase the volume, velocity and variety of will know when it needs to be replaced, your thermostat will an anti-counterfeit and traceability measure. The next genera- of which means they are not very good at capturing data about data available to us. If Ashton is right, removing the limit of know when you are away from home and when you plan to tion of “powder” RFID chips from Hitachi is 1/64th the size of things in the real world. having a human recording data that computers receive about return, your car will know where you have been and your cat the µ-chip. The µ-chip has been available at a cost of approx- And that’s a big deal. We’re physical, and so is our environ- the world means that we will, in practice, be able to track and flap will know how many pets you own (and of which kind) – imately 1 US cent for between five and ten years. ment. Our economy, society and survival aren’t based on ideas count everything. Humans cannot process everything. So one and these things will share this information with other things, of the most distinct features of the IoT is that computers will in most instances without you realising. Marketing done well become both producers and consumers of data, and that at through the IoT has the potential to feel seamless and valua- some point, the majority of data recorded will not be intended ble, or intrusive if done clumsily. Connected devices make the for a human end-user at all, i.e. computers will need not only way our data is used on us more important and obvious – so The Internet of Things refers to the intercon- to record, exchange and process data into information, but consumers’ control of, or input to, their data will be increa- also to understand the information and make choices on the singly important. nection of uniquely identifiable embedded basis of it. Most likely, opting in and giving permission will be even This is entirely feasible. Already in 2011, IBM’s Watson more critical aspects of our relationship with our data than computing-like devices within the existing computer, using approximately 200 million pages of structu- it is today. That said, we quickly got used to granting mobile Internet infrastructure. red and unstructured content (ca. 4 TB) defeated two human apps comprehensive access to our phones (or used to not champions at Jeopardy!, considered an exacting test of human reading terms and conditions) so we’d probably soon get used IoT intelligence and decision making. to that with the IoT as well.

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THE DEMOC RATIS ATION OF SMARTPHONES

The fact that most readers of this report, sees smart- phones as though they have been around for roughly as long as colour TV and Post-it notes underlines the extraordinary pace of smartphone adoption that is outpacing anything we have ever seen – that is until tablets came along.

17 18 DIGITAL TRANSFORMATION DIGITAL TRANSFORMATION

According to data the global active installation base of smart- to these developments, several factors are driving down unit phones will surpass that of PCs this year (Enders Analysis). costs for smartphones, which is likely to further fuel adoption Researcher eMarketer expects that the adoption will continue rates. Downward pressure on the cost of smartphones also at high pace through 2017: supports those arguing that eventually all mobile phones will “Nearly two-fifths of all mobile phone users—close to be ‘smart’. one-quarter of the worldwide population—will use a smart- Mozilla is taking steps to produce a USD 25 smartphone phone at least monthly in 2014. By the end of the forecast with chip and handset manufacturers in China and Indonesia. period, smartphone penetration among mobile phone users The goal is partly to provide its own Firefox OS a foothold globally will near 50%.” alongside iOS and Android; and partly to target the vast num- Estimates suggest that smartphone subscriptions world- ber of people for whom smartphones that cost hundreds of wide will total 1.75 billion in 2014. This is already a huge num- dollars are unaffordable. Demand for these handsets is likely ber, given that there are between 4.5 and five billion mobile to be significant among those with an average daily income phone subscriptions globally. That means there are still three of between USD 10 and 100 per day – the increasingly widely to 3.5 billion “stupid” mobile phone subscriptions. It’s easier to used definition of the global middle class. This is a group that argue that all phones will be “smart” sooner or later, than to is forecast to grow by around a billion in the next 15 years. argue that a lot of phones will stay “stupid” – but how fast will When Google sold Motorola to Lenovo, it retained Motoro- the migration be? And what are the potential benefits of so la’s Advanced Technology and Projects unit (ATAP). Headed many people using mobile phones? by Regina Dugan, the former director of the US Defense Department’s Defense Advanced Research Projects Agency (DARPA), ATAP seeks to bring the same approach to mobile gadget innovation that DARPA used to kick-start the Internet, satellite navigation, stealth fighter aircraft and other technologies that started small but eventually became extre- of around USD 160. In most Asian markets, including China, money using their mobile phone. The service is currently being 1.75 BILLION operator subsidised handsets are less prevalent than in the used by over 17 million Kenyans – more than two-thirds of the mely important. Estimates suggest that the number of smartphone subscriptions One of the first initiatives to emerge west, so being able to market a ‘good enough’ smartphone as adult population. Some 25% of the country’s gross national worldwide currently stands at 1.75 billion. from this unit is Project Ara, which aims cheaply as USD 80 (the new symbolic price point) will be a product flows through M-Pesa and, as a consequence, it is now to reinvent the smartphone by breaking it huge penetration driver in these markets. easier to use your mobile phone to pay for a taxi in Nairobi than down into modules that can be assemb- While the rate of adoption of smartphones in these markets in Oslo. M-Pesa is now also available in Afghanistan, where it is Both Facebook and Google have invested in companies that led and customised in a limitless number of configurations. is unclear, we can be certain that many more people will beco- used, for example, to pay salaries of the police force. use solar-powered drones to deliver Internet connectivity to Project Ara has also introduced its Developers Kit, which me smartphone users – although not all people, at least not poorly connected areas of the world. Project Loon (presen- essentially allows anyone to develop their own phone with its yet: 2.5 billion people live on less than USD 2 a day. For them, GREATER BANDWIDTH AND IMPROVED MONETISATION ted June 2013) is a research and development project being own configuration – extra battery capacity, higher resolution a USD 25 smartphone is still out of reach – and for hundreds Similarly, in richer parts of the world, mobile development is developed by Google with the aim of providing Internet access cameras etc. Users will also be able to create replacement of millions more whom either lack the infrastructure to use not standing still. Over the next five years, South Korea is set to rural and remote areas. The project uses high-altitude bal- parts using 3D printing. Ultimately, whoever has a 3D printer the Internet, or the financial resources to make it affordable. to invest USD 1.5 billion in network upgrades to enable mobile loons placed in the stratosphere to create an aerial wireless will be able to design and print large parts of their handset at Internet communication that is 1,000 times faster than today’s network with up to 3G speeds. “On Loon’s two-year birthday, I home. EXTENDING CONNECTIVITY 4G network. Until operators and devices follow, this will only be would hope, instead of running experiments, we’ll have a more Mobile phones that are not connected to the Internet are al- 1,000 times faster in theory. But as was the case when 3G and or less permanent set of balloons,” Google X leader Astro REINVENTING SMARTPHONES ready revolutionising the lives of farmers, educators and health- 4G were introduced, it is certain that they will. Teller told Wired this summer. “In one or several countries, Less spectacular, but at the moment something that’s having care providers in many parts of the developing world. Many Each generation of network technology has enabled new you will turn on your phone and talk to the balloons.” more impact is the innovation currently taking place in China’s emerging market consumers conserve their Internet activity functionality: 2G was voice, 3G was data and 4G is video. 5G Google has also invested in drone manufacturer Titan, very competitive and price-sensitive handset market. Domes- for opportunities when they have access to a wireless network, is expected to be about creating intelligent networks that can a New Mexico-based startup specialising in solar-powered tic manufacturers have, by making savings in every step of the which may be once a week or less. Even if they have access to a handle the billions of connected devices that will come online in drones, to work closely with Project Loon. This followed Face- value chain – 2.5G instead of 3G chipsets, 3.5-inch instead of wireless network, the high cost of data bars many people from the next few years. book’s acquisition of Ascenta, a five-person UK-based compa- 4-inch screens – and as a result of fierce competition in the accessing the Internet via their phone. Phones, rather than laptops, are the primary devices used ny whose founders were involved with the development of an components market, have been able to introduce good quality In parallel with reducing the cost of smartphones, we also to access content and products. Indeed, in many parts of the early version of a unmanned solar-powered aircraft. In parallel smartphones well below the previously symbolic price point have to tackle the critical issue of insufficient network infra- world, large numbers of users will only consume content on structure in the developing world, something that Google’s and mobile devices. There is a significant difference between a mo- Facebook’s drones and balloons, as well as money transfer and bile-first and a mobile-only mindset. To be relevant in emerging micro-financing initiatives such as M-Pesa will promote. markets, and to a generation of digital natives, businesses must M-Pesa users in Kenya easily transfer, withdraw and deposit have excellent mobile solutions.

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We live in an increasingly mobile 23% of all media content The mobile version of our Swedish news site, Aftonbladet, world, where the growth in the use in the US is now consumed on receives more page views in a week than all other mobile mobile devices, while 18 % is channels in Sweden put together. of mobile phones to consume and consumed on desktops. Digital FACEBOOK MORE channels account for more than generate content is spectacular. MOBILE THAN DESKTOP 47 % of media consumption in the Here we take a look at some figures 117 MILLION VIEWS Facebook reported that mobile MOBILE US. (TV 36.5 %, print 3.5 %). that highlight this growth - and advertising accounted for 59 % of its advertising revenue in some that venture to take a look at EVERYBODYELSE 111 MILLION VIEWS 1Q14. (Total revenue for the how mobile use might develop in 23% VS 18% period increased 72 % to the years ahead. USD 2.5 billion. WORLD MOBILE DESKTOP ONE WEEK (228 MILLION VIEWS)

BY SCHIBSTED’S INDIA JUST FIVE YEARS AGO, GLOBAL 20 MOBILE SITES MOBILE PHONE PENETRATION CHINA 18 GENERATE MORE THAN IN MYANMAR­ STOOD AT 1%. TIME SPENT FIXED HALF OF ALL MOBILE PAGE CONSUMING BY 2013, IT HAD ALREADY DAILY MEDIA PHONE MYANMAR 1,100,000 VIEWS IN SWEDEN. SHOT UP TO 13%. THE UNIQUE USERS ON VERDENS GANG’S MOBILE SITE (NORWAY) LINES WORLD MOBILE PHONE GOVERNMENT WANTS THAILAND 55% SUBSCRIPTIONS: BY 2018 of global Internet use will TO DRIVE THAT NUMBER be via mobile­ devices. NORTH OF 75%. SMARTPHONES % TABLETS 1,147 33% MILLIONS SHARES OF TRAFFIC Meanwhile, the price of a SIM card of all advertising 26 Swedes spend an average of dropped from USD 3,000 to about USD 260. will be digital. In Current annual 29 MINUTES a day consuming TO OUR NORWEGIAN 2009, this figure growth rate of mobile media on smartphones and 6.587 penetration in Africa. CLASSIFIEDS SITE: was 14%. 15 MINUTES on tablets.

ANNUAL GLOBAL 55% BILLION GROWTH IN DIGITAL GLOBAL MOBILE DATA 0R ADVERTISING OF GLOBAL MOBILE TRAFFIC WILL GROW GLOBAL MOBILE DATA TRAFFIC TO DATA TRAFFIC THREE TIMES FASTER THAN 45% 10.7% GROW 11-FOLD FROM 2013 TO 2018, will reach BILLION GLOBAL FIXED IP TRAFFIC 93.5% 2.3 A COMPOUND ANNUAL GROWTH 15.9 EXABYTES FROM 2013 TO 2018. OF WORLD POPULATION. ACTIVE MOBILE BROADBAND RATE OF 61 %. per month by 2018; equivalent to OF THESE, 26.6% ARE 3G OR SUBSCRIPTIONS 4G SUBSCRIPTIONS. ...WILL TAKE IT PASSED TV (AS AT JUNE 2013). ADVERTISING IN 2018 16 15.9 EB 60% of turnover 14 of our Swedish TV schedule site, TOTAL INTERNET TIME 12 10.8 EB SMARTPHONES­ ARE MORE 10 3,965 MILLION tv.nu, derived from IMPORTANT THAN DESKTOP 64% smartphone 36% other 711 8 7.0 EB DVDs each month mobile. FOR BUYING 6 4.4 EB US consumers spend 64% of their 4 2.6 EB time on the Internet on smart- 2 1.5 EB phones. However, two out of three MILLION FIXED BROAD- Month per Exabytes 0 smartphone-driven­ purchases are 2/3 PURCHASES STILL MADE BAND SUBSCRIPTIONS 2013 2014 2015 2016 2017 2018 43,709 MILLION DESKTOP MOBILE made in conventional stores. IN CONVENTIAL STORES (Global) text messages each second

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AT THE HEART OF THE

We truly live FUTUREin exciting times. The pace at which user behaviour, society and business are changing is mindblowing. Old truisms are increasingly challenged, new and engaging ideas rapidly emerge. Comple- tely new products, services and business models are developed in every corner of the world and made available to us all, relations between users and their services are deeper than ever, and the enabling tech is evolving at warp speed. You can call it a Digital Transformation. I say it’s simply Change. And I say “Change is the new constant.” And I like it!

To local players a new class of com- All this Change presents a deep need, dreams and a will to execute. That is ARE YOU LOGGED-IN? We are going sufficiently present in Users’ daily often faster than it takes for a team to petitors has emerged on the horizon and more importantly, offers a tre- an inspiring picture for anyone wanting from the era of Anonymity on the web lives can we actually be able to fully discuss the same issue without any data! – global internet giants like Google, mendous opportunity for us to reinvent to build an organisation for change in to the era of Identity on the web. This understand and anticipate their needs The result for us is fast innovation based Facebook, Yahoo and LinkedIn. The ourselves and rethink our products and the digital age! new world is all about data. More and interests. We call this combination on user insight and rapid iteration, inven- world has become flat, and competition services to better focus on and empow- This is why, for example, Schib- important, it’s about data’s linkage to of Global scale and Local ecosystems tion based on experimentation! And for is global. True. But Digital Transfor- er our Users and customers. sted’s strategy and change team is identity and about the smartest ways Glocal. our Users, great products! Henceforth mation – Change! – is not about that. As part of Schibsted, I am proud to cross-functional and based on diversity to use these identity data to provide a we call this Useiness. Rather, Change is all about the User. say that we and our companies have and expertise, such as data science better and more personalised experi- TECH AS AN ENABLER To meet the It is as simple as that. the relentless drive and the inspiring and analytics, product and pricing, ence for each individual User. We are challenge, we are making a coordinat- THE FUTURE IS TRULY NOW The During the last year Users have ability to do just that. We have uniquely and technology. They come from 13 seeing this trend towards logged-in ed effort and forceful investment in feature is happening while you read this changed their behaviour at an even strong positions in 29 countries, reach- different countries, they are based in across all types of services and it’s only technology, for example in building new article. And the exciting thing is that higher pace than ever before. They ing in total almost 200 million people. several locations, they master all the going to get stronger as Users expect global platforms for our media houses, we all, individually and as a global col- consume media in new ways and across We have great people, world class digital competencies needed and they tailor-made experiences. online marketplaces and digital advertis- lective, can shape the future, influence platforms, they expect online services expertise and tremendous resources. are passionately engaged and focused Improved data analytics will help us ing. This will increase our capability for how Change will continue to happen. to follow them seamlessly, they expect But that’s not enough. To truly on getting to know the user, helping understand and apply all the collected swift innovation and iteration, and make So while there are big challenges, the services to know them and not just Change you need to explore and em- build great products, and improving our user data to develop and deliver what us more agile in adapting to the changing opportunities are even greater. It’s adapt to them but also anticipate their brace new ideas and new ways. There business results. Users truly need and want, when they needs of our Users. truly a privilege to be part of such an needs, they seek one-click solutions and is no magic wand that can make such To change, you need the right want it. It is crucial to see and use tech as an adventure. immediate response, and they are more profound Change easy smooth and people on board, and you need to find Better technology allows us to enabler to increase speed and evolve qualified and adept as digital consum- predictable. But there are some ingre- them in your existing organisation as “create magic” by delivering services quickly for future success. Good tech- ers, expecting only the best from us. dients that can make the Change less well as through your networks and, in that help people in ways they never nology will allow you to prototype a new The same goes for our advertiser challenging. Keywords include Diversity our case, through global search. You dreamed possible. The new game of idea in a matter of just hours or days, businesses, for whom this User change & Expertise, Glocal and Useiness. will not change for real if you do not let logged-in, data analytics and sophisti- rather than months is profound. Any company wanting to new ideas and diverse people influence cated technology requires us to have or years. And good FRODE EILERTSEN have a long term relation with advertis- DIVERSITY & EXPERTISE Some the future of your company, big or global scale infrastructure and exper- data analytics will EVP Strategy and digital transformation ers has to make it really easy for adver- may claim it’s the great weather, small. tise – but it also requires local scale in let you run experi- at Schibsted Media Group – SDT tisers to reach Users in more specific but in truth Silicon Valley is built Change is the new constant, and all the form of a national ecosystems of ments and give you YEARS IN SCHIBSTED: 1,5 and targeted ways, across devices, upon networks, people with different of us must seek to find the right mix of sufficiently extensive and diverse sets quick and precise FAVOURITE SAYING: “Whether you with advanced content and innovative experiences and world class compe- people so that all teams and organisa- of contextually relevant products and user and market think you can, or think you can’t mobile solutions. tencies coming together, nurturing big tions become effective change agents! services for our Users. Only by being feedback and data, — you’re right.” Henry Ford.

23 24 DIGITAL TRANSFORMATION IDENTIFIED WEB The age of the anonymous web has given way to the Identified Web. Nowadays, all online activity leaves a data trail, which provides sufficient information for companies to build digital identities. For companies, this is incredibly useful. And it is for users too – personalised content, convenient payment, seamless cross-device experience – which is why we tend to accept it. The advent of the Identified Web has been a long journey with login proliferating in online industries, and it will also be a long journey onwards, as more offline industries move online and online industries penetrate further into our daily lives.

You were seldom asked to log in to anything in the early days time the browser requests a page from the server. If a cookie of the Internet. But you would often be asked to choose a is set by the same domain that the user is visiting, it is a “first username and a password – that was all. The username plus party cookie.” Otherwise, it is a “third party cookie.” password combination is merely a login ID for authentication The extensive use of cookies enables companies to track revealing little about a user’s characteristics, behavioural their users beyond their own websites to obtain a continuous history or persona. Everything changed when websites and data trail of user behaviours. This data was at the very core of mobile apps started to use that login ID to track us on all of web analytics from its inception and is still central to a lot of our devices and even to link our digital life to our identities in web analytics today. the physical world. The challenge to this cookie-based model comes from two In addition to traditional login-required services such as sides. On one hand, the user targeting precision of cookies is email, calendar, blog, social network, online banking, more and low, because a cookie is linked to a browser rather than to a more online services, from hotel booking to digital media, are person. On the other, the obtaining a continuous data trail of moving to log in. We are even required to provide our email user behaviours is becoming increasingly challenging due to address to use free WiFi services at the airport. The desire to increasing cross-device use and movement against third party know one’s users seems to have never been stronger. Why? cookies. Smartphones have moved a large part of our digital The fact that I need to log into Facebook and Gmail makes life away from computers to mobile devices. Cookies scatter in sense. But why does Dilbert.com want me to log in? Why do I multiple devices, and the data from them becomes fragmen- need to log in to play Angry Birds or search for a restaurant on ted. Services have to come up with new ways to track their TripAdvisor? users in cross-device scenarios. Moreover, the latest browsers have paid more attention to rising privacy concerns and have DISAPPEARING COOKIES made it harder to use third party cookies. Login is almost a During the first two decades of the Internet the key to recogni- no-brainer answer to both sides of the challenge – it naturally sing users were cookies. A cookie is a message given to a web ties cross-device user experiences together with explicit per- browser by a web server. The browser stores the message in mission from users to collect their data, and therefore achieve a text file. The message is then sent back to the server each better accuracy.

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In short, cookies will no longer serve as the user recognition For example, when we purchase and consume digital content solution that they were in the 1990s and 2000s. It is not your online, without login, inputting payment details each time saved cookies that make services greet you with your name, becomes time consuming. With popular subscription-based remember your settings, adapt to your preferences – it is your services such as Netflix and Spotify, the convenience benefit login. Our activities in the digital world are increasingly recor- of login becomes clearer. The demand for cross-device expe- ded by, and linked to, our login credentials. rience is further accelerating the decline of cookies and the proliferation of login. If you are logged in, Google Maps will DIGITAL IDENTITY IN ACTION let you check up on your phone the locations you marked in Several of the usual suspects are competing for leadership your desktop computer, Amazon will enable you to conti- positions in the digital identity space. nue reading where you left off last time on another device, ADVANCED On the user side, the change started with using email Duolingo will help you to learn new words from any device addresses as login names to ease creation of a unique account you have access to. The improvement of service quality we name, and to provide additional security steps such as sending will enjoy far outweighs the hassle of login, so we vote with a confirmation to thwart auto-registering bots. Then came the our feet. “social” login when Facebook pushed it one step further by Because of the huge advantages in advertising from offering Facebook login as authentication credential at third knowledge about users, companies are trying hard to party services instead of each service creating its own login encourage and even force their users to log in. However, account. Google soon followed suit with its Google+ login. the ability to provide quality, personalised services is more DATA Such “social” third party login drives conversions by sparing effective than marketing tactics to complete a successful users from filling in registration forms and leveraging the digital transformation of the whole industry. A user-centric social network they have already created with Facebook and view that takes into account the trade-off between the value Google. We have observed wide adoption of this approach in of data to the service provider and value of superior end-user new Internet startups. experience is crucial. WHY ARE COMPANIES SO ARDENT ABOUT LOGIN? DIGITAL IDENTITY – A WORK-IN-PROGRESS ANALYTICS Initially, the requirement of login and tracing users’ actions More and more information about everyone is becoming online came from security concerns to prevent cybercrime and available online. After a couple of quick searches on Google, illegal transactions, but that is clearly not the motivation for we can access a rich array of information about our friends, The topic of data analytics can be daunting. Not that long ago, data analytics was the domain of scien- companies such as Google and Facebook to provide their user colleagues, celebrities, or even random strangers we meet tists, statisticians, researchers and a limited number of data geeks with lab coats. Today, business leaders identities as a free service to other companies. on the plane. But this is only the tip of the iceberg. Through across a wide variety of sectors are aware that their industries are being transformed by “big data”: tera- Their motivation is knowledge about users. The statement login, companies have gathered far more data about us than bytes of volume, variety and velocity never seen before. This is a scary prospect. So in this article, we’ll try “knowledge is power” is also true in the digital realm. The what we can find on the Internet. We all have a much richer identity providers are competing to be the most knowledgea- digital identity than we may have imagined. to demystify data analytics a little. ble about users, businesses, products and their relationships. So far we have few direct means to use or manage the By offering third party login services, they are able to track rich information linked to our digital identity. Most of it is still their users even outside their own sites. The data from third scattered in the databases of various online service provi- Big data refers to datasets that are beyond the capability for the formation of hypotheses by analysts, (but you can let party services can greatly enrich their knowledge about users. ders. How to make digital identity more useful and easier of typical database software tools to store, manage and data shape hypotheses as well). There are many disciplines And then, they can use that knowledge to improve their other to use is still an open question for digital identity providers. analyse. There is no threshold to the number of bytes after within data analytics – statistics, machine learning, optimi- services and earn a premium. Digital identity in its current status is still a work in progress which data sets are defined as “big”. But there are some re- sation, business intelligence and predictive analytics, among The advertising industry is probably the industry most rather than a mature technology. cognisable features about big data. One is related to volume. many others – that have converged in recent years in the disrupted by digital identity so far. We have seen a steady shift We believe, going forward, that all online companies will We are simply able to capture and store more data than ever new discipline of Data Science. Making use of big data is a of advertising spending from traditional channels to digital strive to build stronger, richer and more complete digital before, (as a consumer, you can now buy a disk drive with the part of data analytics too, but it is important to stress that media – and from display and banner advertising to perfor- identities of their users. This will meet some pushback: de- capacity to store all of the world’s recorded music for less not all data qualify as “big”, nor do they have to in order to mance marketing where search and social are the two biggest mands for anonymity and better security measures against than USD 600), and more data is being generated. Another be useful. It is not only by using big data you can create value categories. digital identity theft are likely to grow as well. The demand is variety. Content is likely to be unstructured and unlikely for your business – there is likely to be a lot of smaller data Advertisers are becoming increasingly accustomed to the for improved security is driven by advances in authentication to be neatly labelled as we typically find in a database. And sets that we are not making adequate use of. Another part powerful combination of performance marketing-tracking and technologies as well as from richer data such as biometric thirdly: velocity. In big data, we integrate static information of the “art” aspect of data analytics is to make good use of target-audience segmentation that digital identity can provide, information. Data transparency is the reply to rising privacy with real-time updates to be able to predict and respond. the patterns and relationships found by data analytics to run and ad spending is shifting in this direction. concerns, and it will lead to a balance between anonymity Remember these three Vs (volume, variety and velocity) and your business. If experience and built-up know-how are and identity. you have a pretty good rule of thumb. the main drivers for decision making in your organisation, CONSUMERS LOG IN TO GET IMPROVED SERVICES Data analytics is the art and science of automatically ana- that can require a lot of getting used to. It can also be a Today, consumers can bundle their identity to contents and lysing large data sets to discover meaningful patterns and challenge for businesses to reduce their reliance on this transactions to get personalised and improved services. relationships. It requires methodology choices and allows sort of know-how.

27 28 DIGITAL TRANSFORMATION

Data analytics becomes “advanced” because we can finally We are able to record, store and query this data at an entirely however, is our ability to process data sets of great variety in process almost any data in real-time, which is a true game collect, store, analyse and apply big data in (near) real-time different scale than just a few years ago. As a result, esti- real-time or near real-time. changer for data analytics applications. The improvement using advanced methods such as machine learning and predic- mates say that we will reach 40 Zettabytes of data by 2020. The availability of cheap and scalable storage and compu- in velocity provides data in fine granularity with which we tive analytics. Data analytics has been used as a way to create Moreover, by the end of 2015, around two-thirds of the global ting capacity provides necessary infrastructure for going from can observe continuous changes over time, feed live input to value in business for hundreds of years already. For example, digital data stored, will have been produced between 2013 and sampling to big data. Without efficient storage and computing models and react to changes instantly. Velocity in data collec- insurance is a business based on predicting the likelihood and 2015. capacity, we would be stuck with expensive data warehouses tion provides data of higher quality from both larger volume impact of outcomes since the 18th century. Weather forecas- Let’s examine some examples of applications of big data and no real big data. The very nature of being able to store and improved freshness. This allows us to train models with ting and earthquake prediction have applied very large data that are already making a significant impact in several indu- and process the exponentially growing data is an impressive better accuracy and solve larger scale problems. Velocity in sets in prediction modelling for well several decades. And stries. technology progress. distribution enables applications in time-sensitive cases. For since the beginning of the 20th century, modern statistics IBM Smarter Cities is an initiative by IBM that use existing The variety of data is drawn from the variety of sources and example, when serving an ad to website visitors, the site must emerged and became applied to science, policy-making and IBM cloud computing and some purpose-built solutions to channels that we can collect data from. We have seen a great be able to collect data about the visitors, send the data to the business. The challenge is accuracy. Predicting that it will enable governments and agencies to use big data for public improvement in data variety in recent years. So far, we still models at back-end, retrieve insights from the models, and rain during the next year somewhere in Norway is something functions – public safety, health and human services, educa- see a line between offline and online – offline industries mainly match the visitors with suitable ads contents. All of this must everyone can say with confidence, but predicting if it will rain tion, infrastructure, energy, water, and the environment. This count on the data from their own sensors, and online compa- be done within milliseconds from when a visitor opens a page. at 1pm on the 17th of May in central Oslo requires advanced has brought changes to how traffic is directed in Lyon, how nies mainly use data tracked from their websites, but this line Real-time bidding further involves broadcasting the data about data analytics. Accuracy requires both sophisticated models police work in Taipei and how water management is evaluated is becoming increasingly blurred by the Internet of Things. the visit in an ads server and select among ads bids from mul- and simply more and richer data. in places as diverse as bone-dry Tulsa and the flood-wary When we say that we can process big data very “effi- tiple advertisers. Velocity is the key enabler of advanced data There are countless useful ways that data analysis is Netherlands. ciently”, it is important to stress how efficiency enables us to analytics in such time-sensitive applications. being applied. Splunk is maybe the name most associated with big data Let’s use subscriber churn as an example: it is better to – its main product is enterprise software that searches, mo- know how many subscribers churn than not knowing it, and nitors and analyses big “exhaust” data, visualising it to make pinpointing who it is that churns is also a necessity – descrip- it accessible across organisations. It was founded in 2003, went public in 2012, and today has a market capitalisation USD 6.7bn. Splunk’s has a growing customer base – more than 5,000 Estimates suggest that total digital data stored by 2020 will reach companies use it, including more than half of the Fortune 100. There is no shortage of exciting, younger, companies in this space as well: human-­ resource software Evolv examines skills, work experience, and personalities in ways 40 zettabytes similar to many other software suites. But it also examines more than 500 million data points on, for example, gas prices, tive statistics obviously still needs to be there. But predicting unemployment rates, and social media usage to help predict, who will churn is better than knowing who did churn, and say, when an employee is most likely to leave his job. being able to recommend with precision what can be done to But the most powerful examples of big data application prevent churning is obviously more useful. For that reason, are perhaps those that we experience daily without reflecting moving up the complexity ladder has great value. upon. When done well, big data analysis feels effortless to the We believe strongly that adding to one’s strengths in user. But we should not underestimate the data and analytics optimisation – in anything from conversion rate optimisation, power needed to bring you personalised recommendations traffic acquisition, ad inventory management, and churn ma- on Amazon, a personalised newsfeed on Facebook or Yahoo, nagement – has great value. an autocomplete suggestion on your Google search or the retargeted online advertising Criteo shows you after you BIG DATA IN BUSINESS have visited a site but not bought the product they hoped you Big data will often be “exhaust data”, i.e. data that are created would. as a by-product of other activities. Billions of networked sensors are being embedded in everything from mobile phones, tablets WHAT IS NEW – APART FROM THE “BIG” PART? and PCs, to energy metres, thermostats, cars, trains and planes The big volume aspect of data is actually not that new. The to closed-circuit TV cameras and refrigerators. We share more fact that the term “big data” was first presented in 2008 and via social networks and all kinds of content sharing sites, and governments are actively working on its regulations show web sites of all kinds log all sorts of behavioural patterns. how mainstream it is now. One thing that is genuinely new,

29 30 DIGITAL TRANSFORMATION SMART DEVICES Three platform changes – underway right now – are set to change people’s behaviour and pave the way for extensive product and service innovation in digital media. These developments are likely to disrupt many existing products and services. The next wave of wearable, “everywhere” computing will take shape alongside the adoption of smartphones and tablets in new markets. As wearable compu- ting becomes mainstream, it will produce more and new types of data available to companies that in turn will enable developers to create applications for new ecosystems. Over time, this will influence the consumption of content in ways that we can only imagine.

Smartphones were adopted at a rate studying in a classroom of students and retain their independence for longer, nu- With wearables, users are hands-free. believe that it will explode rather than where, all the time, it will be harder to never seen before – until tablets arrived teachers all over the world or consul- merous other applications in healthcare With eye-based equipment, products merely increase. This has implica- know when a picture is being taken or a and grew even faster. As companies ting with a doctor face-to-face – just by and surgical education are underway, are even being developed around con- tions for how we think about product video recorded. Swedish startup Narra- focus on the transition from desktop to putting on goggles in your home.” and apps for airline pilots to obtain tact lenses rather than glasses. Google development. A heads-up display, for tive Clip offers a tiny, automatic camera mobile and tablets, another platform Maybe. But probably, Google Glass, safety and flight information heads-up has, for example, filed for patents on example, means that we will not have that users wear on clothing. It takes change is poised to break: wearable and products like it, will augment instead of on paper reports. cameras to be embedded in contact the luxury of occupying a user’s full two photos a minute and later uploads computing. Because tablets were reality for more people even faster: the For advertisers, wearable compu- lenses. view, but we will have the opportunity them. These devices are being shipped adopted faster than phones and phones product is flying off shelves now, (or ting offers an opportunity to merge the There will be numerous interfaces, to enrich and interact with the rest of to their Kickstarter funders, and they faster than PCs, does not necessarily rather, they would be, if purchase was advantages with out-of-home adver- and data about both you and your sur- the physical world. have prompted debate in Sweden about mean that the next wave will be faster not invitation-only). Purchase codes for tising with those of online adverti- roundings will be gathered and supplied While critics say wearable compu- the legality and social norms surround- still. But the attention given to weara- Google Glass are for sale on eBay and sing. Already, applications for image by a wide range of sensors. The conse- ting is too geeky for the mass market, ing their use. bles suggests that many think it is time when Google had a one-day “anyone recognition and augmented reality quences of this will be momentous. we disagree. At one point, it sounded The parallels to the “camera fiend” to get into wearables. can buy one as long as supplies last” advertising (billboards and posters that strange that people would buy cameras debate in the 1890s, following the re- sale, interest was high. adapt to specific individuals) have been THE ALWAYS-ON TRANSFORMATION to put on their bicycle helmets, but they lease of Kodak’s popular folding pocket THE RISE OF WEARABLES? Google and Facebook have also rele- developed. The heads-up/hands-free factor will do: GoPro sold some USD 1bn worth of camera, are striking. Following their Facebook has announced a USD 2bn ased open APIs inviting third parties to Apple has filed numerous patents have a massive impact on the way personal action cameras and accessori- release, cameras were banned from agreement to acquire Oculus VR, innovate product development. Google for wearable heads-up displays, and we live our lives and consume media. es in last year; and it seemed odd that beaches, parks and the Washington makers of virtual reality goggles, who offers the Google Glass developer kit, recently launched its Apple Watch, and Always-on will really mean always on people would want to sync their running monument to prevent prowling camera just now in September presented a which allows developers to build apps both Samsung and Sony have launched and never off. Content can be accessed shoes with their iPods, but they do: owners photographing women. new model. On the face of it, these two with Google Glass. Users already have smart watches. without you having to reach for your Nike+ has 28 million users, and through Since then, however, we have learnt companies could not be more different. considerable freedom wearing Google The defining feature of wearables – phone or other device. The computing partner companies, this number could to live with Kodak foldable cameras The Oculus Rift headset is for ultra-im- Glass: Google Now, Google Maps and that you wear them on your body – is power of these devices is unlikely to be as high as 100 million. and the many cameras that have mersive, hard core video gaming and is Google Mail, as well as third-party a fundamental difference from smart- rival that of your smartphone or com- followed – as most of us have learnt still in development. applications such as news, Twitter, phones and tablets. Today, we reach puter – but they will be connected to NEW GADGETS, NEW SOCIAL NORMS when it is acceptable to use our mobile Gaming was not, however, Face- Facebook and Evernote. for our phones all the time to perform them. New technologies often spark deba- phones and when not to, and when we book’s key motivation for the acquisi- Real-time translation is also avai- all types of task. While it may not feel The amount of data that we collect te about whether people use them can sneak a peek at our Facebook feed tion. The statement accompanying the lable, as are fitness and cooking apps. like a hassle, we still have to physically and process about ourselves is also “properly”. Critics fear people using and when it’s better to leave the phone deal was full of optimism: “Imagine Researchers are developing applications reach for the phone in our pocket before likely to explode as a consequence of wearables will blur the lines of common face down. enjoying a court-side seat at a game, to help Parkinson’s disease patients we can use it. wearable computing. We at Schibsted decency. If we wear cameras every–

31 32 DIGITAL TRANSFORMATION CHAMPIONS FINN.NO’S GUIDING PRINCIPLES: OF INNOVATION ______Finn.no is Norway’s largest online marketplace and has a culture of disruption and innovation. Jens Hauglum, Product Director Innovation & Performance at Finn.no, shares some of the lessons learnt on embedding innovation in the company DNA. 1. Make goals visible, monitor results! Our goal is to be one of the most inno- problems and work with change mana- organisation should be encouraged to vative companies in the world. At Finn, gement to succeed in a rapidly chan- understand and support the conditions Prioritise actions that give value to users we believe innovation is about enabling ging market. Innovation is not always for innovation. We see a strong link 2. people and we have implemented tools, necessary, but problem solving gives the between values, principles and behavio- processes and behaviours to support our organisation skills and behaviours that urs. The principles we use to succeed goal. These are some of the key things can be used in the innovation process. with innovation are closely linked to Use facts and insight we have learnt: management behaviours. If managers 3. INNOVATION IS ENABLED don’t set direction, accept failure, take INNOVATION IS A RESULT BY TECHNOLOGY, BUT MUST risk, challenge truths and embrace new Innovation is a result that can be mea- BE ACHIEVED BY PEOPLE ideas, innovation will not happen. 4. Create space for new thinking sured. We define innovation as a “viable While we are part of a technology inten- new business concept”. sive industry, we believe that technology “TO EXECUTE IDEAS We use the word “business concept” alone cannot achieve our goals. FINN has YOU NEED OWNERSHIP” Learn through experiments because we see innovation as more more than 100 developers, as well as Ideas need direction. If you want ideas 5. than purely product innovation. This is more than 100 sales people. Even if we with impact, you need clear problem de- challenging because revenue models, attract the best developers, our compe- finition and a clear problem owner who brands, processes and customers tend titive advantage also lies in our ability to can take ownership of execution. 6. Ensure quality to be more difficult to grasp in terms of leverage our relationships with custo- Many of these measures are innovation than a specific product. On the mers to succeed with innovation. context-specific and interlinked. Other other hand: the FINN-brand is maybe our We have recently run two innovation companies may experience other effects most important innovation. initiatives together with two of our lar- and have other lessons to share if they 7. Deliver user value frequently gest customers, (open innovation), to find implement similar measures. IT’S ALL ABOUT PROBLEM SOLVING solutions to problems that our common By talking about problem solving and users/customers face. The teams were Improve product and process continuously user needs, you have a great source cross-functional, with sales and product 8. of idea generation and innovation. We as main contri- are working to create an organisation butors. Our ‘Way of that meets user needs and solves user Innovation Team’ JENS HAUGLUM Product Director Innovation & Performance problems better than anyone else. Some has facilitated at Finn.no of these issues call for innovation, but these initiatives YEARS IN SCHIBSTED: 2 not all. using our rich tool- FAVOURITE SAYING: “We cannot solve our We use tools such as A3 and the box. All managers problems with the same thinking we used “5 whys” to identify causes, solve throughout an when we created them.”

33 34 Publishing is evolving: explosive growth in mobile, news on demand and web TV consumption are signs of a diverse, multi-faceted publishing landscape. But where are PUBLISHING these changes taking us and how will publishing look in the future?

35 36 PUBLISHING

Social media, big data, web TV, branded content, mobile – the world of journalism is changing rapidly. At the forefront is Schibsted’s Swedish brand, Aftonbladet, a 184-year-old newspaper today trans- formed into a vivid online media house, bristling with creativity. It has earned the title a unique digital position and world acclaim. Aftonbladet is driven by the power of news – and by people who constantly want to reinvent themselves. Publisher Jan Helin tells the story of what comes next.

SOCIAL Ehsan Fadakar, head of Social Media at Aftonbladet, ding a brand new TV studio of their own in Los Angeles. The came to me and said, in his typically humble and reflective NYT recently reported that BuzzFeed, which started in 2006 style: “Give me a developer and 48 hours, and I will build in New York, is valued at three times more than the venerable a Swedish BuzzFeed.” A simple, quick and unashamedly Washington Post, which started in 1877. entertaining product that dares to morph wildly and is totally The old media business deal is being dismantled and reas- focussed on what readers want to share: humour, nostalgia, sembled in entirely new ways. It is exciting, but there is a risk listings, funny, cute kittens. with all this that has been discussed too little. The risk can be The social news site Lajkat (Liked) launched recently. After described in a question that everybody who is engaged in try- twelve days with a minimum of marketing and no traffic at ing to drive traffic to media sites from social media should be all from Aftonbladet, lajkat.se had more than a million unique asking: What happens if one day Facebook decides to charge visitors a week. It really was unbelievable! But the most im- them for all the traffic it drives to them? It is quite possible, pressive thing about the site is that Lajkat is building a target even probable, that Facebook would find that this is the best group that is almost clinically clean: people between 18 and position for them in the value chain. 24 years of age. This is extremely important for us: to build a As for us at Aftonbladet, we focus on the marvellous fact product that finds its way to a clearly defined target group. that 83% of our substantial traffic of more than five million My vision is that Lajkat will be an important factor in the unique visitors per week, go directly to the site. It’s this figure future, safeguarding the evening paper’s unholy and wonderful that impresses foreign colleagues the most. The purpose-driven work with an early start and continuous JOURNALISM mix of highs and lows, seriousness and entertainment. With A BRAVE NEW TRADE. AS ALWAYS. the proper native advertising, I also believe that it will be an focus on going digital has built an enormously strong digital interesting addition to our product portfolio for the ad market. preference for the Aftonbladet brand. This is what makes Products such as Lajkat are impressive in their speed and us Sweden’s prime online news source. But we continue to volume. But they are driving one page view per visit. There is a discuss, constantly, viral models and testing them. This is a complication here for those who want to develop the business strong antidote to hubris. To remain slightly paranoid, feeling and the product. Direct traffic and page views are extremely like the underdog, in spite of being the biggest, is the single important quality parameters on such sites. most important factor behind the success of Aftonbladet. I was discussing this issue with Scott Lamb, one of the world’s leading figures in this area, and director of BuzzFeed’s BIG DATA I recently met Alexandra Hardiman, Executive Di- international expansion. Quite rightly, there is a lot of buzz rector of Mobile Products at the NYT in New York. Her presti- around BuzzFeed. The world is watching them in awe. Last gious workplace is often derided for having been overtaken by year they passed The New York Times (NYT) in numbers of new players, especially in terms of traffic. But when it comes unique visitors. Today they have 130 million unique visitors a to the financial performance, we should perhaps restrain our month. However, 75% of visitors to the site arrive virally. That praise for the new businesses, given that the NYT has twice means that the number of page views is not as impressive. the digital revenue of BuzzFeed, Upworthy and Business Insi- But here is the difference: BuzzFeed has fully adapted to der put together. this. They don’t work with any other online advertising than Alexandra hinted something that would “shake things up”. branded content. They do not use display ads. No other type of Soon after we spoke, a report emerged that rapidly became the online advertising. Just branded content. That is worth consi- talk of the entire media business. It was an inside report from dering for initiatives wanting to drive traffic virally. the NYT that was never intended to enter the public domain. Scott went on to describe current developments in Buzz- BuzzFeed leaked the report, typically enough, which Feed. They are fascinating. Scott told me how they are recru- published the first two parts of the document. The entire iting correspondents in all parts of the world. They are in the report was subsequently made available by Mashable. The process of building a team of investigative reporters, including impact of the report was fascinating and the leak quite several Pulitzer Prize-winning journalists. And they are buil- deliberate, if you ask me.

37 38 PUBLISHING PUBLISHING

Arthur Sulzberger, the current head of the newspaper dynasty how much content readers are missing with those habits. competent in creating attractive TV content, they buy it or in- that has owned the NYT since 1896, set up an internal group We must be better at handling our long tail. vest in companies that are good at producing quality content. tasked with reviewing the entire organisation with two clear We need data on reading habits so that we can package So what can a relatively small player such as Aftonbladet questions: How online are we? And: What are our strengths content and present it to those readers we know are intere- come up with in the digital TV environment? We have fantas- and weaknesses? sted. We need to distribute a lot of it through social media tic digital traffic and a very strong competence in digital user The result was an extremely well written report. Every­ and adapt it for sharing. If we collect data and are able to experience. one with an interest in what is happening in online and media match them with readers’ behaviour we will be able to do We never ignore a new type of screen or a new device and should read it. It has an impressive degree of self- scrutiny: a what it basically is all about: Getting the right content to the say: “that’s not where we should be”. And we’re not planning potent cure for hubris. Let me pick up an anecdote from the right reader at the right time. on starting now. Are we going to take the risk of believing that report that shows how amazingly far behind you can end up the Internet stopped at 14-inch screens? That young people even if you are in the know. TV VS. TV-TV Viewing figures for linear TV in Sweden are do not care about larger screens because they are too big? I Solomon Northup lived in the state of New York in the falling, and the trend is set to continue. Today, 280,000 don’t think so. middle of the 19th century. He was kidnapped during a trip to fewer people watch TV on a television set every day. That is I believe in listening to teenagers. What are they saying Washington D.C. and sold as a slave to a cotton plantation in dramatic. Let us look at two of the big new players: You­ about TV? They love dynamic content, consuming it more Louisiana. For twelve years he lived under the most appallingly Tube and Netflix. They are two fundamentally different TV than ever. But they cannot understand why they are supposed conditions as a slave before he was freed. In 1868 he wrote a platforms with completely differing content. Their models to be served one part of their favourite content once a week book about those twelve years. I am sure many of you recog- have been guided firstly by content and secondly by the user at 7:30pm, chopped up by ads. It’s the user experience they nise the film by Steve McQueen that won three Oscars in 2013. experience. So: don’t like. They never said that they don’t like big screens. On Oscar night, a member of staff at the NYT finds so- 1. Content This is where we’re seeing some interesting opportunities mething interesting in the archives: the original story from 2. User experience for a new player in TV – as long as Aftonbladet continues to 1853 about Solomon Northup. This was before the book. This Forget everything else when you are deliberating on what is develop its content and user experience. was way before the film. In other words, extremely relevant changing the media landscape. Everything else follows as material for the millions of people who watched one of the a consequence of these two. That goes for programme for- BRANDED CONTENT Data-driven advertising and target most talked about films of 2013. The NYT realises that it mat, the length of programmes as well as data collection, groups composed by data analytics are a growing part of ad compatible with a client’s, there will be no co-operation. should re-publish the article as it appeared in 1853. But they analysis and business model. expenses. These are the best ways to optimise inventory and • A branded content co-operation must lead to better content did not think much further than that. But the New York site Perhaps the change in television can be described simply pinpoint relevant target groups. But there is something that for publishers, not inferior. It must be something we want to Gawker did. by reflecting on the screens we surround ourselves with on Real Time Bidding (RTB) and data-driven optimisation cannot do anyway, regardless of whether we find a partner. They politely linked to the source, but picked parts, added a daily basis: smartphones, laptops, tablets and flat screen help us with, and where display is also insufficient. It is re- • Branded content must be clearly marked as such for pictures, worked on headlines and comments and listed things TVs. One of them became interactive on June 29th 2007. lated to the very reason for advertising to exist: to nurture a viewers. Clarity on this point will build trust and reliance. that Northup had been subjected to. The story was one of the That was the date when Apple launched the iPhone. Before desire, appeal to feelings, to create a craving, to move hearts This will benefit our readers and editors as well as our most shared articles in the US that year, but most of the traffic that, a mobile phone had mainly been a linear platform. and minds. partners. went to Gawker. Through it, sound, images and text were distributed. So the This underpins the trend in branded content: to revive Our world is being fundamentally changed by a handful This example highlights a basic cultural difference between content was in place but the user experience was a disaster. the ability to stimulate the heart and mind with stories, with of Internet giants in California. This is of historic significan- a print organisation and an online organisation: the print orga- Steve Jobs grasped this. The content was there. User expe- content – just as Always did with their “Run Like a Girl” sani- ce. Our habits are deeply influenced by Google, Facebook nisation is thinking “finished” when the editor presses ‘Publish’. rience was the problem. He solved it. The platform became tary products campaign. Always decided to wake up hearts and Twitter, literally every day. The environment created by The online organisation is thinking: “here we go” when the truly interactive for the user and the rest is history. and made a three-minute film that you have to see to really these companies and the development they represent is, I editor presses ‘Publish’. The remaking of the TV market will be about the Inter- understand it. believe, the world’s most under-reported story right now. Would we have realised that we should enhance this ma- net giants marrying or investing in content. There will be After less than 14 days it had 47 million views on You- That is why Aftonbladet this autumn will set up Sweden’s terial and spread it virally if we had found it in our 184-year-old no difference between linear and digital distribution. The Tube – one of the best examples of branded content I have first partner studio inside of media house to produce branded archive? That is worth reflecting on – as is the cost for each screens will behave in the way you want them to, not in the seen. There is now a very clear trend of large, highly regar- content. We are going to create material that tells the story day that passes without us structuring metadata from the way a TV channel might wish them to behave for commerci- ded newspaper brands building their own studios to create of the digital revolution, how it affects our lives, our homes, entire content we produce. al reasons. content in co-operation with strategic partners. our everyday lives. Aftonbladet produces around 300 articles every day. Apart from US dollars the currencies used in the reshaping The NYT is calling it Brand Studio and has disclosed that But if you look at the degree of reading online, there is a of the TV landscape will be these three: they are planning co-operations with Dell and Goldman Sa- And that, my friends, is a great story! clear cut off after the 50 most read articles. Up to that point • Digital traffic chs. The Brand Studio is staffed by journalists, art directors the reading rate is extremely high: a single article might • Knowledge about user experience and video producers. have a quarter of a million readers. Then it drops fast. Not • Competence in creating attractive TV content This is what we are thinking: JAN HELIN because the other articles are poor quality, but because TV channels lack the first of these two, and have outsourced • Aftonbladet wants to co-operate with players who “want Director of Schibsted Sweden Publishing Aftonbladet is a torrent of items around the clock. the third. Instead they have focussed on commissioning good something more”, who, for example, want to have a commu- and Publisher Aftonbladet Most readers dip into the site about four times during the quality content for a medium that offers poor user experien- nity responsibility or push issues outside their core business. YEARS IN SCHIBSTED: 16 day. The average time spent on the site is between nine and ce. The digital players have the money, the traffic and the • Aftonbladet’s branded content partners are strong, FAVOURITE SAYING: “There is more to 10 minutes, which is considered good. But you can imagine knowhow of user experience. And while they are perhaps less established brands. Should our vision and tone not be 100% the picture than meets the eye.”

39 40 PUBLISHING PUBLISHING

Media houses are at the core of Schibsted. With a long and proud history of publishing, SUCCESSFUL MEDIA COMPANIES they’re also at the cutting edge of our growth in areas such as mobile and web TV.

Aftonbladet is Sweden’s leading media house, both in Bergens Tidende is western Norway’s leading media Verdens Gang (VG) is Norway’s largest commercial digital Svenska Dagbladet (SvD) is Sweden’s premium nation- print and online, with more than three million readers company. It reaches approximately 80% of the entire media house. With its origins as a single copy tabloid al daily newspaper, and is published in print, web and every day, (roughly a third of the Swedish population). adult population in the Bergen area – every day. ­Bergens newspaper, VG has transformed into a modern news mobile. SvD provides coverage of domestic and interna- It has by far the largest news media presence in Sweden Tidende also owns several local newspapers, and in co- organisation, publishing on all digital platforms, including tional news and business as well as local reporting from across all channels – web, mobile and print – and is an operation with Stavanger Aftenblad, it has acquired and desktop, tablet, mobile and web TV. It is also expanding the greater Stockholm region. It has won Sweden’s best increasingly important player in the rapidly growing web launched several niche websites including Offshore.no, its TV offer and is building a TV station for terrestrial newspaper award on several occasions, as well as the TV segment. iLaks.no and Sysla.no. broadcasts. Swedish Pulitzer Prize.

daily visits to all users readers total unique Bergens Tidende’s per day per day visitors per week 3,295,000 225,000 digital channels 2,400,000 1,400,000 paying unique users via readers of unique mobile subscribers to desktops/tablets Bergens Tidende visitors per week Aftonbladet per day 197,766 Plus 205,000 1,200,000 800,000 people access winner of mobile page our sites via Norway’s­ best unique users on views per week 1,887,000 mobile 2013 news website 1,100,000 mobile per day 4,900,000 income from our people access copies of digital channels readers Aftonbladet TV print version doubled from per week 632,000 every day 2x 2012 to 2014 139,343 sold per day 2,100,000

Location: Stockholm, Sweden Location: Bergen, Norway Location: Oslo, Norway Location: Stockholm, Sweden Founded: 1830 by Lars Johan Hierta Founded: 1868 Founded: 1945 Founded: 1884 Publisher: Jan Helin Editor-in-Chief: Gard Steiro CEO: Siv Tveitnes CEO/Editor-in-Chief: Torry Pedersen Editor-in-chief: Fredric Karén CEO: Gunilla Asker Website: aftonbladet.se Website: bt.no Website: vg.no Website: svd.se

41 42 PUBLISHING PUBLISHING NEWS DISRUPTED! SIX TRENDS IMPACTING THE FUTURE OF JOURNALISM

With new behaviours and technologies, newsgathering and distribution face fundamental changes in the years ahead. Here we take a quick look at six trends in journalism.

NEW FUNCTIONALITY AUTOMATED STORIES PERSONALISED NEWS ALGORITHMIC CURATION OF NEWS NETWORK-DRIVEN DISTRIBUTION CROWD-FUNDING PLATFORMS 2.0 The new iOS 8 has prompted five big We tend to think that news reporting For readers, only the news stories that We are seeing a massive trend in Inspired by the success of BuzzFeed, Concern that traditional news media news organisations to update their cannot be automated, but this has they are interested in are relevant ‘sig- media publications’ technology and but with an explicit progressive political might in the future not be able to fund apps, or release new ones to take ad- been challenged by a small startup in nal’. Everything else is noise. Personali- data-driven newsfeeds that are curating point of view, the goal of another investigative journalism drove the vantage of new features. Most promi- Durhan, NC. The company, Automated sation is the basic principle for impro- content that has been created and network-driven publisher, Upworthy, is emergence of crowd-funding platforms nent are the possibility to offer widgets Insight, has launched an initiative with ving this signal-noise ratio. Schibsted’s shared by many. It is interesting to to draw massive attention to “worthy that enable people to back investi- and the function Handoff that lets users Yahoo! where they provide fully-perso- news service Omni is a great example of note that Facebook has recently taken topics” – and it has so far been tremen- gative journalism projects. Now, the start an action on one Apple device and nalised recaps of every fantasy football personalisation, as is meny of the new several steps to shift the content of dously successful. Upworthy publishes best platforms are actually becoming finish it on another. match-up across the entire Yahoo! services in the big media houses. Yahoo! users’ News Feeds towards hard news, much fewer articles than BuzzFeed and national publication venues themselves. The Guardian also enables users to platform. By using quantitative data, has tried to reinvent itself several rather than dancing cats and sunsets. HuffPo, but still draws a comparable One such example is Beacon Reader. personalise the news selection in the they are able to convert the informa- times, without necessarily succeeding. It started this process by increasing size of audience because of the sheer Launched in 2013, it has now introduced widget and images are viewable in full tion into a journalistic narrative that is However, what has worked well is their the popularity of breaking stories by its volume of “likes” per article. They have a subscription model into crowd-funding screen. The New York Times has rele- indistinguishable from that produced take on personalised news. On an avera- favourite publishers inside the News mastered the dark arts of viral with a investigative journalism. In addition to ased a new cooking iPad app that will by a journalist. Using a unique algo- ge day Yahoo! displays about 13 million Feed, and it is continuously adjusting its unique blend of A/B testing technology backing individual projects and stories, send users a Recipe of the Day. Brea- rithm that searches for trends and key different news story combinations on its algorithms to promote what Facebook and clever editing. The staff searches readers pay a fixed subscription fee king News has added a “nearby” section insights within a given data set, their homepage. Those stories are individu- thinks is attractive news content. the Internet for Upworthy-worthy to get access to all stories on the site. to show local news where the phone is. software creates personalised articles alised according to demographic data The professional social network content, writes multiple headlines, and According to Beacon Reader, 90% of ABC News has added a follow button for millions of individual users at a and user behaviour. Yahoo uses a set LinkedIn, like other social networks, then runs these headlines with a test projects successfully get funded, and for specific news items. The Associated cost comparable to what it might cost of algorithms leading to a substantial is morphing its service into a content audience and selects the best-perfor- currently there are more than 70 jour- Press is offering a Big Stories section on a single journalist to create a generic, increase in engagement – click-through platform to get users to come back ming one, which they then push out on nalists located in 30 countries supplying the app’s homepage. one-size-fits-all news piece. to news stories has increased by 300%. more regularly. social networks. content for the platform.

43 44 PUBLISHING

THE EFFECT OF THE FUTURE: PROGRAMMATIC BUYING

The digital transformation has changed how we buy media. Programmatic marketing – campaigns deployed according to parameters set by software and algorithms – has given advertisers the ability to reach a global market using automated and targeted trading more efficiently and more effectively than ever before, writes Frida Lundh, Director Data & Programmatics Schibsted Sweden.

Programmatic buying revenues incre- pricing model because advertisers set growth in this segment. Advertisers ased by three figures in Europe last their own bid prices. wasting budgets on ads that are never year, the growth this year continues and actually seen and campaigns that are providers are getting into the market PROGRAMMATIC: HERE TO STAY being optimised on click robots will, extremely quickly. This phenomenon Whether we like it or not, programmatic however, challenge the growth of pro- has, and will continue to, shake up the is here to stay. The speed of its further grammatic. Traffic quality control will media industry. Programmatic marke- adoption will be determined by five continue to be a priority. ting sceptics fear that a continuation key factors. The first is digitisation. As Finally, programmatic is also highly of this trend is likely to result in vanilla media channels are digitised, program- dependent on data, i.e. cookies. Cookie offerings for advertisers, and forecast matic will spread into every corner of technology is replaceable, but if legi- that ad spending risks being eaten up the media landscape. slation changes suddenly, there could by intermediaries charging hefty fees. Secondly, programmatic direct, i.e. be trouble. As cookies are incompatible Supporters claim that it is saving digital the possibility to buy guaranteed volu- with iOS, and log in is not always set as advertising because it is effective, focu- mes, is of particular importance. Media a standard, mobile and omnichannel-ca- ses on ROI and makes possible what we agencies, non-RTB (Real Time Bidding) pable programmatic offerings are not could not do previously. actors and DSP/SSPs are racing for yet widely available. control of this area where 70% of digital A POWERFUL TOOL budgets are transacted today – namely SPEED MATTERS, MORE THAN EVER Programmatic marketing is a powerful through the RFP (request for proposal) Programmatic will definitely have an tool for advertisers because it automa- channel. effect on the future of advertising. Keep tes the complex, manual planning pro- Video is likely to be the third growth being curious and you will learn exactly cesses that take time and money to set driver for programmatic because it is how. And maybe you want to learn by up. Advertisers are now able to spend forecast to see the sharpest growth adopting the approach of bookmakers more time being creative and less time within digital advertising in the next and the e-commerce industry, and start reading spreadsheets. And inspired by couple of years. And lots of broadcast to buy programmatic yourself? But to how search offers spend and targeting ad spending is about to be moved be a part of the future remember: speed efficiencies, many are moving towards online, just as there will also be a major matters, more than ever – due in part to programmatic ad-trading platforms shift from TV to IP TV (smart TV) that the continued development of RTB. that offer greater planning control. The enables program- buying platform rapidly adjusts dozens matic targeted ads. of variables in real time based on data The exponential FRIDA LUNDH pertinent to the campaign, thereby increase in ads, and Director Data & Programmatic Schibsted Sales determining the right campaign settings the potential for & Inventory to cherry pick ad impressions to achieve fraudulent traffic, YEARS IN SCHIBSTED: 3 desired ROI. Programmatic marketing will be the fourth FAVOURITE SAYING: “Life begins at the end of also offers a completely transparent key factor driving your comfort zone! ”

45 46 PUBLISHING MEDIA CONSUMPTION Our media consumption habits are changing at an unprecedented rate. Increasingly, we consume content on our own terms - and ­often on the move. Here’s a glance at just how digital we’re ­becoming. 278,000 2 MILLION Update status Add photos/video Google 27,80027,800 200,000+ photos posted on Facebook every minute TWEETS searches PHOTOSPHOTOS

...are uploaded 84% of this to Instagram group access every minute, 72 6.3 93% OF 1.8 on average. hours social media­ hours : sites every day. of video uploaded million THAT IS /day SWEDES Facebook Likes between to YouTube 20 BILLION The average time Swedes the ages of 71% of the same age spend consuming all media types 15 & 24 use group watch TV, and (TV, radio, print, digital etc.). Amazon the Internet 16% read print ver- PHOTOS This is the same amount sells USD shared to date of time as it was in 1987. every day. sions of newspapers. 204,000,000 emails are sent PHOTO – 132,600,000 of which 83,000 MESSAGES are spam (65%) SENT EVERY worth of 400 DAY ON 2,780,000 products million SNAPCHAT video views on 40 million+ YouTube total users Likes daily on Instagram Five 880 Vines are tweeted every billion second photos will be taken in 2014 alone (forecast).

47 48 PUBLISHING

CODE I peeked over journalist Anders “Kommunebyggeren” was ­know­ledge Grimsrud Eriksen's shoulder, as I have transfer of the highest quality. It man­­ Bergens Tidende done countless times before, skimming aged to capture the attention of far through half-finished stories, telling more people than BT could have Location: Bergen, Norway them to find new angles and check the ­managed with any traditional article. Founded: 1868 facts. This is what I am good at, the typical newspaper editor. GAMIFICATION This is just one of • 225,000 read our digital channels daily But that day I fell short. Looking many examples of BT’s digital projects. • 205,000 read our newspaper daily down at the screen, nothing made sense A small group of only three program- to me. Fonts in different colours on a mers have revolutionised our editorial • 2013: Winner of best news website in black background, one line after another thinking. The newsroom is brought ­Norway and winner of the Skup prize. with cryptic characters of pure nonsense to a position where it can perform its • 2x the income from digital channels – at least to me. duty to society with even greater force. from 2012 to 2014 Anders Grimsrud Eriksen is the most The digital toolbox is slowly but surely recent addition to our editorial team. becoming spacious. Whereas before we journalism is not dead. Source cred- He came on board to run investigative discussed the length of the lead section, ibility, curiosity, a flair and ability to journalism. We know he is going to do we now talk about things like data ask good questions are still all crucial amazing things. In fact, we are hoping mining, crowdsourcing, SQL queries and success factors. It is when technological he brings home BT’s next prize. But gamification. know-how meets the virtues of classical Anders is never going to write classic We have investigated whether politi- journalism that gold is created. news articles. I am honestly not even cians were telling the truth in “Faktas- Newspapers are dying and good sure he writes good Norwegian. But he jekk” (Fact Check), uncovered wasting reporters are leaving us for communi- knows coding, better than most. Anders of public funds in “Verdens rikeste land” cations agencies. We cannot deny that represents the future of journalism (The Richest Country in the World), and the media industry is sitting under a and BT. created a database with information on dark cloud. However, this must not be 11,440 traffic accidents in “Døden på confused for a journalistic crisis. It is Left to right: Tove Knutsen, Lasse Lambrechts and Anders Grimsrud Eriksen. VIRAL HIT What was hiding behind veiene” (Death on the Road) – just to the business model that is rotting, not Anders’ red and black lines of coding? mention a few. our ability to uncover conditions worthy The Norwegian government is merging Our methods are developing gradual- of censure. We have most likely never smaller municipalities, making them ly, digital knowledge is spread within the before been better equipped to do our into larger units. The municipal reform is editorial team and we attack complex duty to society. Technology has given controversial and will change society as topics from new angles. These efforts us tools we could only have dreamt of THE NEW GOLDEN AGE OF we know it. Still, most people know little are not particularly expensive, but they before. about the reform. have produced great results. In the past In a few years, BT will have come Anders’ project was to make an over- five years, BT has won more awards for through the digital transformation. It whelmingly dull reform both interesting investigative journalism than any of the will not be easy. But we will succeed, INVESTIGATIVE JOURNALISM and understandable. Joining forces with other Schibsted newspapers, and our and I believe the discipline of journalism two of our experienced political journal- developers have played a key role in will come out stronger. Reporters like ists he created “Kommunebyggeren” most of these projects. Anders Grimsrud Eriksen are repre- In the wake of media crises journalism flourishes. It takes on new – roughly translated as Municipality sentatives of the new Golden Age of Builder – an interactive tool that allowed CROSSROADS Some believe more in journalism. readers to rebuild the map of Norway algorithms than in articles. They claim forms, but at its core it remains the same: It opens closed doors, themselves. He obtained data from that journalists of the future are techies. public sources, systemised it in a cloud This is wrong. BT’s success has not investigates the powers that be, and tells the stories that make the service and designed a new map-making come through world just that much more fathomable. Bergens Tidende (BT) took system. The result was amazing. Anders simply hiring a few managed to take something as dry as talented program- the award for Norway´s website of the year in 2014. The media- regional policy and make it into a viral mers. The key GARD STEIRO hit. Within a short few days more than factor is that they Editor-in-chief at Bergens Tidende house has won a series of awards for digital, investigative journal- 300,000 Norwegians had had built new work together with YEARS IN SCHIBSTED: 14 municipalities, and calculated area, debt experienced news FAVOURITE SAYING: “Gullet skal hem” (Local ism. Chief Editor, Gard Steiro shares the insight and the story. ratio and population­ development. The reporters; because reference – Bergen’s football team. Roughly entire country was redrawn. the profession of translated: “Bring home the gold”).

49 50 Heightened environmental consciousness, the emergence of new digital market- places, and the simple desire to find a bargain: the future of classifieds has never CLASSIFIEDS looked so vibrant.

51 52 CLASSIFIEDS

A ROADMAP FOR SUSTAINABLE SUCCESS

The classified site Leboncoin is one of Schibsteds greatest successes – with an unique position in the french market and society. Leboncoin has been called “a phenonemon filling the gap of the weakened national state” in France and anlalysed by both philosophers and economists. Alexandre Collinet, Deputy CEO, shares some of the recipe.

Popular business discourse favours the classifieds site had a map as their front same time. Focus has constantly moved idea of learning through experimenta- page. In the age of the World Wide Web, from one priority to another, but the tion and failure. From Beckett’s maxim: distance was no longer a limit and ne- core of the company has followed the “Ever tried, ever failed, no matter, try arby became a relative concept. Having evolution of the website. again. Fail again. Fail better,” to Ash proximity as a core principle for a clas- First came the product, then the Maurya and the Lean movement, our sifieds website made a real difference. traffic, and then the focus on moneti- attention has been squarely focused on The ‘freemium’ business model is sation. And only after all of that, did we learning from our mistakes. Which, whi- another example of out-of-the-box inn- implement processes, management le critical, might not be the whole story. ovation, even within Schibsted, where principles, and corporate structure to Perhaps it’s just easier to analyse the insertion fees for classifieds were the support it. But building the company source of our failure than to investigate norm. Leboncoin showed that there culture has been present all along the cause of great success. Or maybe can be greater value creation through – since the very beginning. As Brian it’s that failure demands attention and indirect monetisation channels, for Chesky, Airbnb’s CEO, explained to his explanation, while success is celebra- example, advertising. employees: the key advice he received ted, but often glossed over. There’s a Simplicity is another key driver of from one of his investors was: “Don’t tendency to explain away tremendous our success. When everyone else was fuck up the culture”. growth as sheer luck. This approach, busy talking about Web 2.0, Leboncoin The challenge for Leboncoin is to however, is simply too easy and offers created Web 0.2, using the KISS (Keep capitalise on these insights, and to use little, if anything, in terms of added It Smart and Simple) principle. Posting them in the future to secure continued value to the company. an ad on leboncoin.fr is quick and easy. growth. We need to remain steadfastly Today, our competitors range from Everyone, even Great Aunt Mildred, innovative, to distil simplicity to its very small to large companies, from niche can do it. It’s all too easy for startups essence (the one-click sale?), and to players that can focus on delivering a to get caught up in their own tech actively pursue a world-class culture, better user experience in one small seg- hype, focusing on building a technically all of which should save us from the ment of our business, to global leaders. sophisticated product to please venture dreaded Fat Cat syndrome. As such, we need to understand the capitalists or hedge fund managers. pillars of our success and to build our Instead, Leboncoin focused on provi- future development on them. It’s been a ding a service that suits the majority of rocky path from instinct to knowledge, French web users. but we’ve finally formalised what has We targeted our led us to where we are today. users, our potential Innovation is perhaps the most customers. important element to our success. It’s Finally, we built ALEXANDRE COLLINET hard to believe that such a rudimen- the product step by Deputy CEO at LEBONCOIN.FR tary website was once considered an step and created YEARS IN SCHIBSTED: 5 innovation, but it’s true. Pre-Blocket, no the company at the FAVOURITE SAYING: “No guts, no glory.”

53 54 CLASSIFIEDS CLASSIFIEDS

Finn.no will be YOU CAN BUY SOME AWESOME NOK THINGS ON With the number of 15 km driven by all the CLASSIFIEDS 15 cars in Coches.net From oil platforms to finger nails, from bicycles to football you could: teams, we love to buy and sell things online. And we’re doing YEARS it more and more. Here are some stats and facts that reveal the frenetic world of classified ads. Your very own A piece of football stardom FINN.NO HAS EVEN IN 2015 piece of the Cosmos: with Real Madrid’s Sergio a meteorite. Ramos’ player license. BEEN USED TO SELL travel the length of the Great AN OIL PLATFORM. IS NORWAY’S MOST POPULAR Wall of China 557,000 times. LARGEST WEBSITE 4 million 0R BY PAGE VIEWS, SEARCHES OR with more page IN NORWAY CLOSE TO views than the next Enjoy the trappings of A replica of Michael three largest sites Sofa 2,566,201 monarchy with castles from Knight’s KITT from the MOTOR ADS combined (VG, NRK One in four the tenth and fourteenth iconic 80’s Knight Rider centuries. TV series. Climb up and down Mount PUBLISHED and Dagbladet). PER WEEK Bicycle 2,120,359 80,000 Everest 666,000 times. INTERNET USERS ads posted on FINN.no 0R 2014 in Italy use iPhone 5 1,573,306 in 2013. Despite innovations in delivery, people still meet face to face to billion+billion exchange items bought online. 430,225 10 2014 PAGE VIEWS 2013 75% of DoneDealers The number of page views ON meet up face to face to 2013 registered by FINN.no in 2013. cconclude deals. Travel from Earth to the Sun 78 times. › Community Gardener YOU CAN FIND: 6 million 413,979 ads are ­projected to be › Geek › Ultimate Solutionist From May to July 2014, sales of computers and On › Sourcerer › Customer published on FINN.no A car is sold on every minute. laptops on Berniaga were 28% higher than sales Happiness­ Developer­ in 2014. › 93% Modern, Cool Nerd Fighting of new laptops in Indonesia for the same period. NUMBER OF roosters, MAY ...are all job titles at our Finnish the most CARS SOLD: classified site popular 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 pet on NOK chotot.vn. 600 At Tips on how to write On our classifieds 220,287 passionate love letters. you can buy amazing site in Brazil, = EUR 1.3 billion houses such as: billion bomnegócio.com The value of compre e venda perto de você IN SALES an average of items advertised on 19 COMPUTER GAMES FINN.no in 2013. Google House Messi’s house ARE SOLD EVERY HOUR in Madrid. in Gavà. EQUIVALENT TO as well as Human finger nails: Creative sellers who Vespa is the most searched A car sold on DoneDeal in put on sale by a female compose music and poems TWO MOTORBIKES item on Subito.it, with 3.2 Ireland has its own music video Shakira’s house more than 20% of private seller. to accompany their ads. million Vespas sold in 2013. which has racked up more than in Barcelona. Norway’s GDP. EVERY MINUTE. 231,000 hits on YouTube.

55 56 CLASSIFIEDS THE NEXT BILLION CONSUMERS ENTERING THE GLOBAL MIDDLE CLASS One billion fewer people live in extreme poverty today than 20 years ago. And it’s likely that we’ll see a similar fall in the next 20 years. While this process has yet to propel large numbers of people into the global middle class – often defined as a daily income of between USD 10 and USD 100 – forecasts suggest that this group will grow rapidly in the coming years.

57 58 CLASSIFIEDS CLASSIFIEDS

According to a report by Ernst & Young, some two thirds of Getting in early can deliver huge rewards. the global middle class live in the Asia Pacific region, up In spite of their strong global brands, existing multinatio- from one third in 2009. The same report projects that the nals face fierce competition in emerging markets, as these middle class in Europe will remain roughly constant in abso- economies have already fostered aggressive local players lute numbers. Consequently, its relative share of the global that have captured a significant portion of middle class middle class population will be drastically reduced. By 2030, spending. For example, Chinese drinks maker Hangzhou Europe will account for 14% of the global middle class – less Wahaha has built a USD 5.2bn business in the face of com- than half of today’s share. Conversely, the Asian middle class petition from global names such as Coca Cola and PepsiCo. will see a substantial gain in its share. They have achieved this by targeting rural areas, filling local Countries with large populations that are experiencing product offering gaps, keeping costs low and appealing to rapid growth, such as China and India, will become powerhou- patriotism. ses of middle class consumerism in the next two decades. While there are multiple ways to attract emerging market Reports estimate that as many as 500 million Chinese could consumers, two key factors are speed and scale. One way enter the global middle class in the next ten years. This multinationals can quickly gain the scale they need is to means that by 2030, around one billion people in China could identify clusters of similar consumers across multiple mar- be part of the middle class – 70% of its projected population. kets. That approach allows them to build revenue and profit Although the majority of the growth in the global middle streams and justify significant, ongoing capital investments to class will come from India and China, other markets should fuel growth. not be overlooked. According to research by Bain & Company, Alternatively, companies may opt to work at a more local there will be 350 million new consumers in 50 other countri- level, gaining scale in specific regions and categories by es such as Indonesia, the Philippines, Nigeria and Ukraine in teaming up with established, local partners. They can help the same period. not only in product development and adaptation, but also in These rapidly growing populations, coupled with growing distribution and market positioning – crucial steps in reaching spending power, are creating substantial business opportu- highly localised markets. nities. It is, however, important to note that this new middle Schibsted has adopted a strategy that incorporates ele- class will be considerably poorer than the middle class in ments of both approaches above. The group has set up and developed countries. In China, average income is forecast to tested classifieds to clusters of consumers across multiple peak at about USD 18,000 per year (in current dollars), i.e. markets through investments and acquisitions, and establis- more like a giant Poland than another US. hed close relationships with experienced partners. For businesses assessing these opportunities, it’s all about finding the point where a sufficient number of people start BUILDING ACROSS MARKETS to earn the equivalent of more than USD 10 a day and enter Traditional approaches, where companies enter markets one the global middle class bracket. When this occurs, typically by one and focus on a handful of brand and market combina- when economies reach approximately USD 6,000 per capita tions, seem less likely to meet the challenges of the deve- income, purchasing habits attract the attention of companies loping world’s growing middle-class. Furthermore, companies that want to supply middle-class consumers. need to build and share customer information across markets, and be willing to work with others to gain scale quickly. ASSESSING GROWTH POTENTIAL Structural changes might also be required. Because mul- Reaching this point accelerates growth, which in turn adds tinationals may need to adopt different business models by more people to the middle class, producing a virtuous circle. market, category, and brand, they need flexible and responsive Schibsted Classified Media has always chosen to – and bene- adapt when needed. Berniaga.com in Indonesia, for instance, has According to the economist Surjit Bhalla, each 10 percenta- organisational structures. For example, Cisco has established fitted from – building strong local teams and sharing knowled- used social graph elements (and Facebook integration) to build ge point increase in a country’s middle class results in a 0.5 a secondary corporate head office in India to spearhead its ge between units to build local resources. a greater degree of trust between users. percentage point increase in its GDP growth. The year that a push into the country, while other companies are establishing While there is bound to be some commonality in user needs country hits this point is crucial to assess growth potential. centres of excellence to identify, recruit and develop staff who across countries, companies that wish to expand in emerging NO ONE-SIZE-FITS-ALL New spenders offer an opportunity for early entrants to can be employed locally. markets should take cultural differences into account. There “Businesses that do not embrace a strong strategy for capturing gain lasting advantages similar to the advantage companies are both systemic differences between emerging market emerging market consumers will miss huge opportunities for in Europe and the US secured in western markets. An analysis LOCAL TALENT, LOCAL RESOURCES consumers and consumers in the developed world, and diffe- growth.” Virtually all growth in the global middle class popula- in a quarterly report by McKinsey revealed that in 17 product Finally, companies need to be aware of perhaps the biggest rences between each emerging market. As an example, online tion will come from emerging markets, little from the rich world categories in the US, the market leader in 1925 remained bottleneck to seizing the emerging middle-class opportunity: classifieds relies on a degree of trust between strangers for and almost nothing from Europe. Furthermore, growth in global the number one or number two players for the rest of the talent. Relying excessively on expatriates will create chal- transactions to run smoothly. While this was “pre-installed” in spending power is set to come from emerging markets. By century. These companies include Kraft Foods (biscuits), lenges for an organisation’s ability to sufficiently scale up and society in Norway and Sweden, not all markets work like this. 2020, forecasts suggest that emerging economies will account Del Monte Foods (canned fruit), and Wrigley (chewing gum). establish its presence in emerging markets. It is therefore important to be humble in all these settings and for around 60% of the increase in global spending power.

59 60 CLASSIFIEDS CLASSIFIEDS

A MORE SUSTAINABLE 42% with of people in Sweden WORLD buy second-hand as a way of reducing Buying and selling environmental­ impact. second-hand reduces Survey conducted by Blocket and Ipsos environmental impact by decreasing the amount of new products that need to be produced, and by enabling older items to be 87% OF reused, rather than being TWO OUT OF treated as waste. Em- THREE SWEDES BLOCKET blematic of the growing say that the main reason popularity of classifieds ONLY 5% for selling things on Blocket is to ensure that is Sweden’s Blocket. Here of Swedes would TONNES they are recycled. ADS RESULT are some gems of infor- Survey of greenhouse gases saved by people using throw away a ­bicycle conducted mation about the impact by Blocket Blocket is having on the Blocket instead of buying new products. they no longer want. and Ipsos IN A SALE. environment. AT ANY GIVEN MOMENT, THERE ARE MORE THAN 1.6 MILLION TONNES EQUIVALENT 28,82328,823 TO 18 MONTHS’ VEHICLE EMISSIONS toystoys IN STOCKHOLM, OR 600,000 exchanged between children in Sweden in 2013 through the THE ENTIRE SWEDISH organisation Retoy, supported ADS by Blocket. ROAD NETWORK FOR 4 MILLION sold on Blocket every year. ONE MONTH. unique visitors to Blocket every week. ON

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TRENDS IN CLASSIFIEDS

The classifieds market is evolving at a mind-blowing pace: new opportunities, new behaviours and trends are emerging. Some of the most inspiring trends point to new ways of empowering users. Schibsted’s Valerie Coulton shares some of the most vibrant trends right now.

PLATFORMISATION lent example. Our improved ability to ment solutions, home delivery, and safe One approach to building an effective serve users personalised content will meeting places. All of these initiatives classifieds marketplace is to provi- radically improve engagement and con- take into account that however positive de platforms for users to showcase version. We’ll be able to make the most an online experience may be, the rubber themselves and their offerings. These of our position as a global entity with a does finally meet the road. Increasing- may be more or less open and perso- base nearby, providing our users with ly, consumers will expect complete nalisable, and more or less effective, cutting-edge technology while interac- solutions. Perhaps not as radical as but all should enable users to cre- ting with them closely, locally and with Ekhanei.com’s TV commercial in which ate the content that makes the site a friendly touch. one click transforms a horse into a valuable, both actively and passively. dune buggy, but pretty close. High user engagement and incentivised NICHE MARKETPLACES AND login allow these sites to collect large CURATION BLURRED LINES: PRIVATE AND PRO amounts of data about window shop- A natural outgrowth of platformisation An experiment at Schibsted’s ChoTot pers and buyers. and personalisation is the opportunity site in Vietnam earlier this year showed Meanwhile, sellers have the be- to segment an audience around more that sellers perceived by the company nefit of audience, tools and analytics. than demographics, thereby creating a as professionals didn’t see themselves Opportunities for innovation emerge focused marketplace both in terms of in the same light. In fact, we discove- from being close to users, tracking goods and users. This can be a narrow red a spectrum of self-identification their behaviour and discovering their offering, such as Japan’s clothing site among sellers that could be described needs. Airbnb’s professional photograp- for young women, Fril, or of curation as “evolving”. Many companies are hy programme is a good example of on a more general site. Krrb’s catego- recognising that private sellers could this. In essence, platformisation is the ries and blogs are designed to appeal become professional, semi-profes- co-creation of value with creative and to discerning furniture collectors; Eric sional, or at least more successful if empowered users: acting as an infra- Polak’s Kapaza blog discovers and given the tools and help to do so. At the structure for interaction in the market- showcases great finds from hundreds same time, insightful companies such place. These platforms should drive of ads. as Krrb and Airbnb, have realised that high quality interactions and ensure professionals face distinctive challeng- high quality interactions. COMPLETE SOLUTIONS es around trust, and are seeking to help Creating an excellent online to offline these participants improve their per- PERSONALISATION AND experience is a challenge many busi- ception among buyers. In essence, this RECOMMENDATION nesses face. Beepi is a good example, trend is about recognising that there’s a The world is changing from a place Uber’s ‘invisible’ payments is another. person behind the ad. where users search for content, to The underlying trend here is to remove a place where content searches for inefficiencies that users, a trend driven by social mecha- create substan- nisms and data-driven algorithms. dard user expe- VALERIE COULTON For Schibsted, this is an opportunity riences. Within Innovation Catalyst at Schibsted Classified Media to increase engagement by exposing Schibsted, we have YEARS IN SCHIBSTED: 4 content that would not otherwise be seen some great FAVOURITE SAYING: “In the beginner’s mind found because people are unable or experiments with there are many possibilities; in the expert’s unwilling to find it. Mobile is an excel- peer-to-peer pay- mind there are few.”

63 64 CLASSIFIEDS CLASSIFIEDS

Schibsted is one of the world’s leading providers of online classified market places. SUCCESSFUL CLASSIFIED COMPANIES Here is an overview of some of our most popular sites.

Leboncoin – “A social phenomenon” was how Le Monde Blocket – Referred to as “The mother ship”, Blocket has Subito – or “right away” – is exactly the reason way Willhaben – or “will have” – could almost have been described Leboncoin on the front-page of its weekend been the inspiration for the majority of SMC sites around Italians love our site. Buying and selling on Subito is translated to “must have” when you see the way edition in January 2013. And with good reason – in just the world. But first and foremost, Blocket is a Swedish extremely fast, (a car is sold every minute), and it’s ­Austrians are flocking to the site every day. Willhaben eight years, Leboncoin has become one of the best- phenomenon. Every Swede knows Blocket, and many use one of the fastest growing sites in our mature markets. is the Austrian site with most page views, and regularly known French brands and one of the most visited media it frequently. “To Blocket” has become a Swedish verb for Subito is our second largest site (by visits), and at any attracts 40 times the number of visitors than the Eiffel channels in the second most populated country in buying and selling, and the equivalent of 11% of Swedish given time, you can find more than 16,000 Alfa Romeos Tower. And despite this, Willhaben is still the fastest Western Europe. GDP is transacted on Blocket annually. on the site. growing site in our mature markets. 23,650,000 630,000 4,310,000 2,500,000 Total live ads on the site Total live ads on the site Total live ads on the site Total live ads on the site 1ST 14 MIN 1ST 11MIN 1ST 12MIN 1ST 11MIN Rank vs. other online classifieds sites1) Daily use per visitor 2) Rank vs. other online classifieds sites1) Daily use per visitor 2) Rank vs. other online classifieds sites1) Daily use per visitor 2) Rank vs. other online classifieds sites1) Daily use per visitor 2)

4TH 38% 5TH 32% 11TH 20% 6TH 22% Website ranking in the country 3) Reach (desktop only) 4) Website ranking in the country 3) Reach (desktop only) 4) Website ranking in the country 3) Reach (desktop only) 4) Website ranking in the country 3) Reach (desktop only) 4)

Location: France Location: Sweden Location: Italy Location: Austria Part of SCM since: 2006 Part of SCM since: 2003 Part of SCM since: 2007 Part of SCM since: 2006 General Manager: Olivier Aizac General Manager: Jan Prokopec General Manager: Melany Libraro General Manager: Sylvia Dellantonio Website: leboncoin.fr Website: blocket.se Website: subito.it Website: willhaben.at

Used comScore data is based on desktop only. 1) Based on page views and total live ads on site (source: comScore). 2) Daily time spent on site in minutes per visitor (source: alexa.com). 3) Page views per month in m (source: comScore). 4) Percentage of internet population which is reached through the service per month (source: comScore). 65 66 The disruptive effect of the sharing economy, continued technological advancement and the most enabled entrepreneurs the world has ever known are all changing business and GROWTH how people interact. Here’s our take on the opportunities for future growth.

67 68 GROWTH MOST ENABLED ENTREPRENEURS. The Wall Street Journal’s EVER! Billion Dollar Startup Club tracks companies that are valued at USD 1bn or more by venture-capital firms. It counts around 20 club mem- bers founded in 2008 or later. Surely then, there is no better way to spend your time than becoming an entrepreneur?

69 70 GROWTH GROWTH

There is no shortage of people willing to become entrepre- between paying as you go and having to dedicate time and accelerators that have sprung neurs or an early-stage investor. From Berlin to Stockholm, money to infrastructure is huge – and today hosting a website up around the world enable Barcelona to Tel Aviv, tech startups are popping up at a rate with 50 million monthly page views can cost as little as entrepreneurs to start with not seen since the first dotcom bubble. In Berlin, a new Inter- USD 400 a month. Much of the tools needed to run a business, a minimum amount of fixed net startup is launched every 20 hours. At the last count, Tel from analytics to accounting, are also delivered as a service. costs. One study suggests Aviv boasts 5,000 tech startups. Even in Oslo, it is apparently App ecosystems, primarily Apple’s App Store and Google’s that there are nearly 500 cooler to be a technology entrepreneur than to land a plum job Google Play, offer global platforms that allow developers to accelerators in the US alone, in a big corporation. reach millions (billions in some cases) of users worldwide. and Schibsted Growth esti- Instagram was released by two Stanford graduates in October mates that there are around WHY IS THIS HAPPENING? 2010. It registered more than 10,000 downloads within hours. 2,200 incubators worldwide. It has never been easier to set up a company. There are two Over the next 18 months, until its acquisition by Facebook, Valuations of home runs are main developments that make it much easier for entrepre- it attracted more than 40 million users with no marketing increasing. The desire to get neurs to start a company (although not necessarily making it a expenditure. This is extraordinary. in early reflects high valua- success) than was the case only a few years ago. Firstly, there “Apple’s App Store fundamentally restructured the apps tions for proven concepts, and are many innovations that make it easier to run and market a ecosystem, the process of developing and launching apps the fact that the rewards for tech company. Secondly, financing is more readily available. and how consumers consume content and services. It also “hitting one or two home runs” changed computing forever,” says Chetan Sharma, mobile in a portfolio of companies is NEW TOOLS AT THE ENTREPRENEUR’S DISPOSAL analyst and consultant. It is hard to disagree completely with what drives returns for VCs. Cloud services allow tech companies to get started with no this, but it is important to keep in mind that there are currently Heady valuations also entice capital expenditure and no time spent on setting up infra- well over one million apps available in both the App Store and more people to choose life as structure and recruiting system administrators. The difference Google Play, so getting attention in these new environments an entrepreneur. requires hard work just like it does in traditional marketing Crowdfunding is emerging channels. as an alternative. For entrepre- However, there are marketing methods available to neurs located outside major entrepreneurs today that were not available just a few years VC hubs, crowdfunding holds ago. Growth hacking is a technique developed by technology promise as a new route to ear- startups that applies creativity, analytical thinking, and social ly-stage capital. Kickstarter is metrics to sell products and gain exposure to validate busi- the world’s biggest crowdfun- ness concepts. ding site. It allows the pooling Startups often lack both money and a conventional marke- of funds for artistic or business ting background, so they tend to focus on low-cost and inno- projects through “donations”. vative alternatives, i.e. social media and viral instead of buying Backers are not given equity in return, but there are advertising through more traditional media (often viewing other crowdfunding sites that permit this, such as companies started between 2003 and 2013 and looked at paid search marketing as one more approach to avoid). It can Sweden’s FundedByMe. the characteristics of those recently valued at USD 1bn or be discussed how “new” this movement is, as in many cases, more. They found 39 such “home runs”, meaning that on growth hackers are simply good at using techniques such as IT’S STILL AS HARD AS IT ALWAYS WAS... average four are born each year. Facebook was the brea- SEO, web analytics, content marketing, A/B testing and user Today’s entrepreneurs have tools at their disposal that dot- kout “super home run” (worth >USD 100bn). In each recent reward schemes – all mainstream methods. com-era startups could only dream of, both for operating and decade, one to three super home runs have been born. About Genuinely new, however, is the potential of social media as funding businesses. As a result, it is much easier and faster 0.07% of venture-backed consumer and enterprise software a growth accelerator. This involves using social networks as to see whether you have an idea capable of becoming a big startups become home runs. a marketing channel, but perhaps more importantly, adop- hit – and much faster to find out if you haven’t. That does not mean that the remaining 99.3% are failures. ting part of social media’s logic: that users recruit new users While it’s clear that many of the companies will never It is possible to be worth less than USD 1bn but still be a suc- through word-of-mouth. This requires a mindset that merges make it past the seed stage, the low cost and accelerating cess. However, it does mean that investors will typically have product design and product effectiveness with marketing and infrastructure available to quickly and cheaply validate to invest in a lot of companies before getting a home run. uses the product as a marketing vehicle. Thus, growth hacking business ideas in the seed stage, mean that those compa- means building the product’s potential growth, including user nies that do make it to secondary funding rounds will be WHAT DOES THIS MEAN? acquisition, on-boarding, monetisation, retention and virility, all ones with many more proof points and higher probability of Investors and companies are shifting their focus towards into the product itself. success. early stage investments. Competition is now global. Startups Historically, top venture funds have driven returns from are not only an investment opportunity for media companies, EARLY STAGE FUNDING MORE AVAILABLE THAN EVER their ownership in just a few companies in a given fund of a but also potential competitors. Three of the big ones today – Seed funding and incubators are booming. Seed funding’s large number of companies. Most startups still fail, but some Google, Linkedin and Facebook – are 16, 11 and 10 years old share of total global venture capital funding increased from make it big – really big – faster than ever before. In a recent respectively. The big ones in five to 10 years from now could 5% in 2004, to 27% in 2013. The numerous incubators and study, Cowboy Ventures built a dataset of US-based tech be in an incubator, or have yet to be established.

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NEW FIRMS ARE SET UP ENTREPRENEURSHIP 50 MILLION EVERY YEAR GLOBALLY Technological advances, innovative financing models and the potential for multi-billion valuations are encouraging more and more people to become THAT’S PER Although estimates suggest entrepreneurs. Here are some data and projections that reveal the extent that some 120,000 firms probably and influence of entrepreneurship today and tomorrow. AROUND 137,000 DAY close every day as well. IN THE US SMBs SMBs ARE SET TO GROW PROJECTED NUMBER OF SMBs GLOBAL SMB TO EXPAND AT in selected countries MARKET WORTH * USD 62 BILLION A 26% CARG TO * IN 2013. USD 125 BILLION USA 25,168,000 BY 2016. BRAZIL 5,658,000 $575 *Compounded annual rate of growth ...comprise ...account for ...employ more More than 50% of the working population in the US LATEST FIGURES FOR UK 4,751,000 nearly 65% of more than 90% than 90% of the (120 million people) are employed­ BILLION global GDP of all businesses world’s workforce by small businesses. ADDITIONAL SPAIN 3,328,000 REVENUE AND GERMANY 3,140,000 SUGGEST THAT CREATE IaaS is expected to top SMB 400 THERE ARE FRANCE 2,970,000 STANDS FOR: MILLION USD small- & mid-sized MEXICO 2,892,000 JAN 107,000 23 42 In the first eight PEOPLE business FEB months of 2014, billion MAR by the end of 2016. 377,847 SMBs CANADA 2,290,000 MILLION APR TRYING TO ? were established MAY in the UK. That’s ESTABLISH ADDITIONAL JUN about 1,500 AUSTRALIA 2,258,000 Representing a JUL ­every day. EMPLOYMENT IaaS AUG There are now SEP This compares with the SOUTH AFRICA 1,894,000 STANDS FOR: following full-year totals: OPPORTUNITIES 400 million entrepreneurs OCT 27% Infrastruc­ture as 2013 526,446 in 54 countries and those NOV *$ refers 2012 484,224 85,000 0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 BY 2020. to USD CAGR a service numbers are growing. DEC 2011 440,600 BUSINESSES

73 74 GROWTH

PARTNERING WITH GREAT ENTREPRENEURS

In this digital era, entrepreneurs rule the world and young people no longer dream of working for a big corporation, they dream of starting one. In student survey after survey, increasing numbers of students state that their preferred career path is becoming an entrepreneur, and among my acquaintances people would choose the epithet successful entrepreneur over famous rock-star any day, explains Miriam Grut Norrby, Investment Manager in Schibsted Growth.

But being an entrepreneur is more bal solutions with local relevance from and teams. Together, we have built than a lifestyle choice and more than day one, and the shift from analogue some of Europe’s fastest growing and a career choice. It’s about believing in to digital in many industries creates most successful digital companies. an idea so much that you are willing to massive market opportunities. But not Of course we have made and learnt spend a few years of your life working all entrepreneurs build companies with from our mistakes along the way. Most really hard with a very small chance of large-scale products and services and importantly we have learnt the impor- succeeding. Your passion for your idea far from all succeed, become profitable tance of staying small, in the sense fuels the drive and the tireless efforts or even survive. As an example, 1/3 of of keeping our methods and internal to keep improving, building a better all newly started companies in Sweden processes lean, moving fast and taking product and offering a better service, no longer exist after three years. risks. US writer William S. Burroughs to create something and leave a legacy Today we work with an amazing said: “When you stop growing, you start behind. A goal most of us can identify portfolio of fast growing companies, but dying.” That is why we will continue to with, but very few have the stamina we also spend a large amount of time take the risks associated with disrupting to continue to do, day after day, year engaging with the startup ecosystems traditional industries, or even ourselves, after year. Those who do are the great of the markets in which we are present. creating new types of digital market­ entrepreneurs. Access to education, research, science, places and investing in entrepreneurs Every large corporation was once a technology, talent, angel investors, ven- we believe in. startup, ten or 100 years ago. Schibsted ture capital and corporates are needed Partnering with talented entrepre- was a startup when chromo printing for ideas and companies to take form neurs and investing in great digital presses had just been invented. Back and take off, and ultimately for entre- companies is key to our future, because then, in 1839, Schibsted made a busi- preneurs and startups to succeed. We what is a startup today, could be a core ness by embracing new technology. We contribute to this process by supporting business tomorrow. started out just like any startup, trying key functions in these ecosystems, and to build a successful company. Today by openly sharing our own experiences. we support companies with the same In the end, we are type of journey ahead of them. equally dependent Thanks to the digital evolution, on the same eco- cloud-based computing and hosting, systems. open source technology, increased Over the years, MIRIAM GRUT NORRBY access to data and processing power, Schibsted has Investment Manager at Schibsted Growth the cost of entry for a startup is at an partnered with a YEARS IN SCHIBSTED: 2 all-time low. Entrepreneurs today have large number of FAVORITE SAYING: “Orville Wright did not have opportunities to design and deliver glo- talented founders a pilots license.”

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Schibsted invests in and manages a portfolio of fast-growing digital companies. Here are SUCCESSFUL GROWTH COMPANIES four examples of the many companies we believe have potential for long-term growth.

Lendo is bringing transparency to the consumer loan Let’s deal is the largest daily deal site in Sweden and Prêt d’Union brings together people who need a loan and Prisjakt is guiding a growing number of people to make ­market. By ­using Lendo’s unique one credit check-­ Norway. Let’s deal is the best way to get huge discounts people who have money to invest. Its technology allows sensible purchasing decisions. Whether you are looking solution, customers are presented with loan offers on everything from restaurant, spas, hotels and fun them to bypass banks and benefit from cheaper rates on for a new laptop or a certain lipstick, searching for the from several banks at the same time. Lendo is a free, products. loans and higher returns on investments. Prêt d’Union is product on Prisjakt or scanning the barcode in the Pris- independent mediation service that helps thousands the leading peer-to-peer lending company in continental­ jakt app, will provide you with all the online stores sell- of customers get better loans every month. Europe. ing that product, reviews, stock availability and price.

WHO’S BEST AT RENEGOTIATING THEIR LOANS? SEK EUR Women lower their borrowing costs more than men! 1,300,000,000 100,000,000 5,100,000 saved by customers to date loans volume people per month plan their shopping using Prisjakt in our five markets

34 80% 1.5 MILLION 3 MILLION employees customer satisfaction members on Let’s deal deals sold 10,000 1.5 MILLION borrowers products to compare

2ND 43% 100 SEK118 MN veckansaffarer.se “Super-company of revenue from employees turnover 1,500 5,400,000 of the Year Award” in 2013 mobile devices lenders clicks to stores monthly

HQ: Stockholm, Sweden HQ: Gothenburg, Sweden HQ: Paris, France HQ: Ängelholm, Sweden Founded year/by: 2007 by Dennis Ahlsén, Founded year/by: 2010 by Lars Karlsson & Alexander Hars Founded year/by: 2009 by Geoffroy Guigou & Charles Egly Founded year/by: 2002 by Jonas Bonde & Franz Hänel Fredrik Jung-Abbou & Thomas Hjelm CEO: Alexander Hars CEO: Charles Egly CEO: Emil Hansson CEO: Dennis Ahlsén Website: letsdeal.se | letsdeal.no Website: pret-dunion.fr Website: prisjakt.nu | prisjakt.no | pricespy.ie Website: lendo.se | lendo.no pricespy.co.uk | pricespy.co.nz

77 78 GROWTH THE $HARING ECONOMY

“If you own more than seven things, the things own you,” said the Chinese philosopher Lao Zi (6th century BC). So the idea of an asset-light lifestyle is not new. But in the past six to seven years, platforms have emerged that have disrupted a large number of markets, from ena- bling anyone with a spare room and a mattress to run their own B&B, increase the amount of cars and taxis for hire in cities around the world, and turn owning a bicycle or a power tool into a business opportunity. The sharing economy is likely to have a profound impact on the ownership economy, which is already fighting back: not all hotel companies and taxi unions are convinced that the sharing economy’s marketplaces are simply generating more demand rather than eating away at existing business.

We believe that regulatory hurdles will be overcome and that the sharing economy will fundamentally change many industries.

79 80 The sharing economy has many names: collaborative con­ Car sharing is another area where sharing is catching on. Lyft, In its special report, ‘10 Ideas that Will Change the World’, Time sumption, the Peer-to-Peer Movement or the gig economy. known for the fluffy pink moustaches on the front of its cars, Magazine stated “Someday we’ll look back on the 20th century These terms describe new business structures that emerged operated only in San Francisco when it established in 2012. and wonder why we owned so much stuff.” Maybe. But owning in the mid-2000s that were made possible by social techno- Now, it’s operating in more than 30 American cities and is still things has its perks too, and a big question is exactly how logies alongside an increasing sense of urgency about global expanding. Lyft registers and runs background checks on dri- mainstream asset sharing will become. Estimates suggest that resource depletion. In the past few years, “couch surfing” has vers who are willing to offer a lift in return for payment. Lyft “only” USD 3.5bn in revenue was generated by the sharing eco- developed from being a vacation trend for travellers to an has raised USD 250m in financing, backed by several leading nomy last year. Not insignificant, but the Hilton chain of hotels industry where the market leader, Airbnb, is valued at USD Silicon Valley names and in september 2014 launched Lyft alone generated sales of approximately USD 10bn in 2013. So 10bn. Schibsted has launched Tripwell, a similar service. Lines, connecting shared rides along shared routes, in Los An- – to what extent will the sharing economy reshape the markets And taxi services have become an industry where the market geles. SideCar, a similar San Francisco start-up, has spread that we know today, and create new ones? leader, Uber, is valued at USD 18bn. So clearly people believe to ten cities. Uber started offering premium cars, but soon Perhaps the most informative study to date on the first that something big is happening. But what is it? And what added a wider selection of vehicles to appeal to a broader of these questions was published in December 2013, which drives it? cross-section of the market. It also offers car sharing services considered data collected from Texas hotels between 2008 and in both the US under the name UberX and Europe 2013. It found that every 1% increase in the number of Airbnb WASTE NOT. WANT NOT. as UberPOP. bookings led to a 0 .05% decrease in hotel revenue. This means The efficiency case for the sharing economy is compelling. A different model is adopted by RelayRides, which enables that 100% growth for Airbnb is -5% for the affected hotels, and You have lots of productive assets that are unused for much car owners to rent out their vehicles when they are not in Airbnb is growing much faster than that. of the time, (your spare bedroom, your car, your idle hours, use. RelayRides has been funded by, among others, General a parking space or a power drill), and which could be used Motors Ventures and Google Ventures, and makes its money REGULATORY PUSHBACK and monetised. Collectively, this makes society richer. But to by taking a 25% cut of rental fees. The same model (but with first applications, and was developed into a separate platform A hurdle that new platforms associated with the sharing what extent will people choose to share their unused assets? a lower cut of rental fees) is employed by Swedish startup in 2007. The leader in the peer-to-peer lending in Europe is economy will need to overcome is regulatory pushback that is One way to illustrate the spread of the sharing economy Flexidrive, in which Schibsted invested in 2012. Pret d’Union, which was Schibsted Growth’s first investment in increasing evident, as traditional markets have been disrupted. is the impact of peer-to-peer marketplaces that, by lowering France. The company facilitated more than EUR 100m worth Hotel companies and taxi unions are asking themselves if Air­ transaction costs, enable millions of interactions – and the THE IMPORTANCE OF FINANCE of loans since launch in 2012. bnb is hotels 2.0 and Uber is taxi 2.0 – and if they are, should most powerful example is Airbnb, an online marketplace for Finance is another growing segment of the sharing economy, they not be subject to the same taxes and regulations as vacation rentals that connects users with property to rent and includes crowd-funding and peer-to-peer lending. Crowd TO SHARE OR NOT TO SHARE 1.0 versions? with users looking to rent. Here are some key dates in Air­ funding is the collection of funds from backers to fund an The sharing economy is driven by several factors. bnb’s history: initiative (a campaign, a company, a piece of art etc.). Popular Anti-consumerism and concern for resource deple- crowd-funding platforms include Kickstarter, which claims tion certainly plays a part, as does continued weak “Someday we’ll look back on the 20th century and AUGUST 2008: Launch it has received more than USD 1bn in pledges from some overall economic growth in the developed world, wonder why we owned so much stuff.” FEBRUARY 2011: One million cumulative bookings six million individual backers to fund some 135,000 projects which has increased the prevalence of free-lancing 10 Ideas that Will Change the World’, Time Magazine JANUARY 2012: Five million cumulative bookings to date. Sweden’s FundedByMe allows backers to support and made renting and time-sharing more popular JUNE 2012: 10 million cumulative guests projects by taking equity in them, lending money or gaining a alternatives to ownership – and for young people 2013: Six million guests, 250,000 properties added, 75% promise of other kinds of reward. in some countries the only viable option for some business from outside the US. The other main model in finance is peer-to-peer lending. classes of goods. But the driving force we will examine here are Airbnb has run into numerous legal issues, ranging from San 2014: 600,000 properties in more than 34,000 cities in 190 Leading peer-to-peer platform, Lending Club, founded in 2006, the platforms and marketplaces that enable the sharing. Fransisco’s Planning Department warning landlords who different countries. Only in Stockholm you can find more than had originated more than USD 3bn in loans by the end of 2013. The most obvious difference between ownership and sharing are increasingly using Airbnb as grounds to evict tenants one thousand aparments to rent. Lending Club was initially launched on Facebook as one of its is of course that while you can make money by selling what in rent-controlled apartments that could rent for higher you no longer need with classifieds, you create a revenue amounts, to New York’s attorney general subpoenaing Airbnb stream from your assets in the sharing economy model – and for all their NY host data. Several US cities have tried to get it is spreading into assets that would not have been previously Airbnb to collect hotel taxes. considered monetisable (beyond resale value). When you keep Platforms like Feastly and EatWith make it possible for you your assets, however, you also have to manage them. If you to pay to sit and have a meal at a host’s home, often alongside sell your possessions, it’s the last you see of them. Rent them strangers who happen to sign up for the same time slot. out – and you not only get them back, but you are responsible for them. Is this Restaurant 2.0 – and if it is, should it not be subject to The sharing and owner economies will likely live side by health inspections? Are you liable for a TaskRabbit’s injuries side in this area, as in most others – and it is unclear from your faulty lawnmower? whether the differences in dynamics are too great for the “1.0” brands to be stretched into sharing or if it is just a new Airbnb.com Lyft.com marketplace category.

81 82 Young people today are virtually always online, creating a generation where the physical and digital merge seamlessly. New generations of digital natives have known nothing else, DIGITAL NATIVES and are set to embrace new technologies in ways that will CHANGING THE WORLD change the world faster and more profoundly than ever before. 83 84 A key trait of digital natives is that they tend to live much of huge differences between those who are digital natives and of ready-made applications and graphic user interfaces in the their lives online, often without distinguishing between the those who are at the same age but not learning about digital 1980s saw a shift to teaching “ICT” (Information and Com- online and the offline sides of their lives. Instead of thinking of technologies, nor living their lives in the same way. For billions munications Technology): how to use software for everyday themselves as having separate identities for their lives in the of people around the world, the opportunities and challenges tasks such as word processing and spread sheets. The result digital and physical worlds, they often have a single identity faced by digital natives are mere abstractions. The 10 countri- was that pupils left school with little idea how computers and (in two or more different spaces.) They are characterised by a es with the fewest number of digital natives are all African or software work. But digital technology is now so ubiquitous set of common traits, including the amount of time they spend Asian nations, many of which are suffering from conflict and/ that many think a rounded education requires familiarity using digital technologies, their tendency to multi-task, their or have very low Internet availability. with this subject just as much as biology, chemistry, physics tendency to express themselves and relate to one another in However, a report conducted by the Georgia Institute of or music. ways mediated by digital technologies, and their pattern of Technology and International Telecommunication Union (ITU) This belief, as well as employers’ and policymakers’ desire using these technologies to consume information and create notes that Internet usage has increased significantly in the to stimulate more young people to study computer science to new knowledge and art forms. developing world in the past five years. The ITU believes that a more advanced level, is driving a development that com- For these young people, new digital technologies are the the digital native populations in these regions will more than puter science education in basic education is again focusing primary mediators of human-to-human interaction. They double by 2017. on coding and computational thinking, rather than software have created a 24/7 network that blends human identity with Overall, there are currently some 363 million digital natives use. This knowledge, advocates claim, is important not only technology to a degree that we have never experienced before. out of a total global population of seven billion. That amounts to individual students’ future career prospects, but also for This is transforming human relationships in fundamental to 5.2%. But the percentage that Georgia Tech Associate their countries’ economic competitiveness and the technology ways. Digital natives feel as comfortable in online spaces Professor Michael Best thinks is the most important is the industry’s talent pool of qualified workers. number of digital natives as compared to a Exposing students to coding from an early age helps country’s total population: demystify a subject that many find intimidating. It also breaks “A country’s future will be defined by down stereotypes of computer scientists as geeks, supporters ­today’s young people and by technology,” argue. Plus, they say, programming is highly creative: Studying digital native [dij-i-tl ney-tiv] said Best, who co-led the study and, jointly it can help to develop problem-solving abilities, as well as A digital native is someone who has a greater understan- with ITU, developed the model that calcula- prepare students for a world transformed by technology. ding of digital concepts through frequent interaction with ted the worldwide figures. “Countries with “We don’t teach music in school to make everyone a a high proportion of young people who are concert violinist,” says Clive Beale, director of educational WHAT DOES THIS MEAN? them from an early age. Conversely, a person who is less already online are positioned to define and development at the Raspberry Pi Foundation, a non-profit The ways in which some – but not all – young people are in- familiar with this digital environment, who only learned lead the digital age of tomorrow.” organisation based near Cambridge, England that promotes teracting with information, with one another and with institu- As the Internet becomes accessible computer studies in schools. tions is changing rapidly. The consequences of these changes how to email and use social networks later in their life, is from the most far-flung corners of the “We’re not trying to make everyone a computer scientist, are enormous for the future of our societies. Digital natives referred to as a digital immigrant. globe, and smartphones become accessible, but what we’re saying is, ‘this is how these things work, it’s will move markets and transform industries, education, and the volume of sharing is likely to continue good for everyone to understand the basics of how these global politics. The changes they bring about as they move to grow even more rapidly. One of the things work. And by the way, you might be really good at it.”’ into the workforce could have immensely positive effects on as they do in offline ones. They do not think of their hybrid reasons is pure demographics: countries where the growth in Policymakers are listening. Starting at age five, all students the world. lives as anything remarkable because they have not known penetration will come are significantly younger than the old in England will learn the basics of coding, and from the age of There is a global culture in the making, which links people anything but a life connected to one another. rich world – and users in countries with a younger population 11 they will be instructed in the use of at least two program- from all over the world based upon common ways of interac- simply share more. As more countries become more online, ming languages. Singapore, Estonia and Denmark have all ting over information networks. The emergence of this com- THE DIGITAL NATIVE DIVIDE the median age of the online population will decrease and the either introduced, or are planning to introduce, coding courses mon culture is an integral part of globalisation. The conse- Countries with the highest proportion of digital natives are percentage of people’s lives that are shared will increase as in schools. The biggest impact, however, might come from quences of this second notion, of an emerging global culture, most often rich nations that have high levels of overall Inter- a result. NGOs. Code.org is a non-profit organisation and website led by ought to be overwhelmingly positive. It is a dramatic amplifi- net penetration. Iceland is home to the largest number, with brothers Hadi and Ali Partovi that aims to encourage people, cation of the diplomatic and cross-cultural benefits gained by 13.9% of the population considered as digital natives. The CODING AS A PART OF BASIC EDUCATION particularly school students, to learn to code. In December the invention of the telegraph, millions of international student United States is ranked sixth with 13.1%. Perhaps surprisingly The fact that digital natives are adept technology users and last year, Code.org launched their Hour of Code challenge, exchanges, and the rise of the globally networked economy. Malaysia, a middle-income country has one of the highest pro- creators and sharers of content is well known. They do not, enticing children and youth to complete short programming For digital natives, there is no shortage of shared cultural portions of digital natives in the world: it is ranked fourth with however, necessarily have a better idea than digital immig- tutorials. US President Barack Obama, as well as leaders from references – but they are no longer connected to language or 13.4%. The country’s strong history of investing in educational rants of how technology actually works. When computer sci- a number of technology companies such as Microsoft and geography. Digital natives are the customers, employees and technology could be one reason for this proportion of digital ence was first taught in some American and European schools Apple supported the initiative. About two weeks later, it was employers of the future, as well as today. They have an in- natives. in the 1970s, generally as an optional subject for older pupils, announced that over 600 million lines of code had been writ- stinctive understanding of technology that they will bring into The vast majority of young people born in the world today computers did little unless given instructions in a specialist ten and more than 20 million people had participated. Today their roles as consumers and managers, and they will, almost are not, however, growing up as digital natives. There are language. So classes focused on programming. But the advent the number is 42 million. certainly continue to challenge and disrupt existing norms.

85 86 EMPOWERING PEOPLE IN THEIR DAILY LIFE

THANK YOU! SCHIBSTED MEDIA GROUP: FUTURE REPORT 2015 This report would not have been possible without the insight and inspiration of our colleagues EDITOR IN CHIEF Schibsted Future Report: Lena K Samuelsson Facts & Figures: Anders Rikter, Fredrik Lindén, Robert Steen, Jann-Boje within and outside ­Schibsted, researchers and media outlets around the world, and I would like to EDITOR IN CHIEF Schibsted Strategy Trend Reports: Frode Eilertsen Meinecke, Miriam Grut Norrby, Pontus Ogebjer, Annette Karlberg, Pär Ekroth, extend my gratitude to you all. CONTRIBUTING EDITORS: Schibsted Strategy Trend Reports: Ning Zhou, Fredrik Rogberg. Coordination: Helen Kierulf Svane. The Schibsted Strategy Department have contributed greatly in their Trend Reports, other ­Torgeir Drabløs, Espen Sundve, Martin Lampe, Bård Skaar Viken, ­colleagues have written personal ­columns or helped out with facts and figures, not to mention Schibsted Future Report: Hans Bylund, Nick Chippenfield IMAGES: Malin Hoelstad, Sandra Birgersdotter, Robert Eik, Bartek Lewicki, Schibsted Strategy Trend Reports: Edoardo Jacucci, José Guilherme Leite, Kimm Saatvedt, Shutterstock. ­corrections and clarifications. CONTRIBUTORS: LENA K SAMUELSSON Daniel Wentz, Niklas Larsson, Eirik Svendsen, Øyvind Løkling, Steven Bourke, The list of source material is longer than space allows here, and we do not want to overlook Lars Vangen Jordet, Rune Røsten, Christian Horn Hanssen, Richard Sandenskog, CONCEPT & PRODUCTION: BERNTZONBYLUND, Stockholm Sweden anyone, so to ensure that all references are ­easily accessible to you, we have published them on our EVP Communications & CSR Miriam Grut Norrby, Marc Brandsma, Dag Wigum, Andreas Thorsheim, TEAM: Hans Bylund, Carin Larsson, Nick Chippenfield, Isa Svärd, Lars Ryding. website. Please­ visit schibsted.com/futurereport for the full list and to share even more insight. Schibsted Media Group Rune Brunborg, Pooja Sinha, Valerie Coulton, Anders Rikter, Louise Vad. PREPRESS: Bildrepro PRINTING: TMG YEARS IN SCHIBSTED: 18 Columnists: Rolv Erik Ryssdal, Frode Eilertsen, Jens Hauglum, Jan Helin, Frida And again, a warm thank you to you all! FAVORITE SAYING: “Well friends, Lundh, Gard Steiro, Alexandre Colinet, Valerie Coulton, Miriam Grut Norrby. © Schibsted Communication but out there, in the real world…”

87 88 ABOUT THIS BOOK

This book is Schibsted Media Group’s take on some of the profound changes in user behaviour and technology that are revolutionising people’s everyday lives all over the world – and the opportunities that these changes offer. We hope you will find it both inspirational and useful. And that you get to know a little bit more about Schibsted’s great people and companies. SCHIBSTED COMMUNICATION / BERNTZONBYLUND | 2014

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