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Finn remakes classifieds in Norway unburdened by cultural baggagePosted at 03:43 PM - 16 June 2009
As chief operating officer of Norway's Finn (www.Finn.no), he weaved in and out of anecdotes, data points, and PowerPoint slides to explain a “newspaper killer owned by newspapers” – perhaps the best story in the Schibsted stable of properties. In short, Finn is Norway's leading classified advertising portal. It was founded in 1996 by five non-competing regional dailies precisely to cannibalise their print classifieds. The newspaper executives a decade ago believed it was inevitable that someone would create a better digital mousetrap for classifieds. They were correct, they were set up as competitors to their own properties, and they turned out to be the cannibals. Finn – which means “to find” in Norwegian – today is the leader in verticals such as real estate, cars, boats, jobs, and private-party. It is Norway's fifth-leading web site in terms of unique visitors and second-leading in terms of page views. In 2008, the fast-growing Finn generated US$108 million in revenue, US$43 million in operating profits, and a profit margin of just short of 40%. The classifieds portal employs 268 people, including 80 in information technology. Finn is the cultural opposite of media properties with print roots: always on the offensive, sales-based, solution-oriented, metrics-rich, and young. Its executives are disappointed that marketing expenditures are down to 5% of revenue in today's environment. Its digital sales dashboard confronts visitors on large plasma TV screens upon arrival in its Oslo office and is integrated into anything with a screen among Finn executives. What freaked me out about Nordseth's presentation on my recent trip to Oslo was imagining how to explain this story to the typical newspaper executive today who didn't have a similar foresight and can't imagine creating a business to garner a fraction of what it otherwise would have made without the internet. I was equally freaked out about how important scalability is in an operation like this, relying heavily on constant technological investments. The Finn story is like a faithful Buddhist saying a few “Hail Marys” – just in case. For Finn and their Norwegian newspapers, “just in case” happened close to plan. SCUBA-DIVING FOR CLASSIFIED GOLD What Finn does well, strategically, is relentlessly burrow into classified categories. The initial Finn strategy was to optimise existing verticals. Yet it's not an optimisation most newspapers would understand. By attacking sub-categories deeper and deeper, Finn discovered under-served segments such as boats, snowmobiles, theme travel, agriculture, and more. Said Nordseth: “No money is too small for us to pursue.” In short, newspapers snorkel the classifieds; Finn scubas the classifieds. Despite the many sub-brands created with their scuba strategy, there is one over-arching brand. Finn's brand awareness is 97% in a country with two newspaper competitors and international players such as eBay, Facebook, Amazon, and Google. What Finn lacks in design sexiness it makes up for in effectiveness. Nordseth likened Finn to an old Volvo: safe, not sexy, but usable. AVOIDING BUSINESS MODEL MONOGAMY Finn is the embodiment of a media company that doesn't believe in monogamous business models. To illustrate this, Finn's five main areas of business are:
IN CONTRAST TO NEWSPAPERS Learning of Finn's past is a kind of portal to the future for many newspapers.
Nordseth believes that one aspect of Finn's success is the understanding by executives that people who search and browse the classified marketplace are not particularly interested in editorial content. The connection between news content and classifieds was a happy historical coincidence. A pure-play classified portal has no mixed loyalties to journalism and a crystal clear mission that doesn't include an editorial anchor. The only semblance of ties to editorial today are about customer knowledge. For example, page views on Finn real estate advertising skyrocket during football matches. Why? Women flee the television screens during the matches! The truth is, the entire culture of newspapers is why Finn was created as a stand-alone competitor. Newspaper classified departments have historically not had real salespeople but "order-takers" set up mostly to service big accounts. The key for Finn is they are willing to sell anything of any size. By circumventing the newspaper culture, Finn has been a category killer for a newspaper like Aftenposten which has lost to the internet the car market and seen all but the brand elements of the job market migrate to digital. THE FUTURE What do you do when you're on top? Keep attacking, Nordseth says. A Finn-like concept is being internationalised by Schibsted, which acquired a pure consumer-to-consumer portal in Sweden several years ago called Blocket. This portal now has a similarly dominant and profitable position in Sweden as Finn does in Norway. Blocket has been so successful that it is now being set up in other European and Asian markets, adjusted to market and cultural differences. Meanwhile, Finn is focusing on building its position in the travel market and value chain products, and increasing market share in brand advertising. It also is keeping an eye on structural changes in the directories business. While continuing along that strategic continuum, Finn believes it is moving from publisher to “active transaction facilitator.” And it is always looking to differentiate. Nordseth says Finn's differentiators are its platform control and how close it is to its customers. Sounds like something anyone might say, yet here's their specific peg: Never outsource customer support or salespeople as they are your difference-makers. That Finn retains a high percentage of its employees helps, too. Schibsted is a great story in the investment community, and Finn is one of its treasured stories. For a newsmedia industry in search of anchors in today's storm, Finn is a good starting point for imagining the future.
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Dear Earl, this is a wonderful story. Should be mandatory for each and every publisher... Best regards Hans-Dieter |
Click below for the new Newsmedia Outlook report for 2010 ![]() About Earl Earl J. Wilkinson is executive director and CEO of INMA. In his interactions with INMA members worldwide, Earl has one of the broadest views of newspapers of anyone serving our industry today. He is a trendspotter and a leading advocate for cultural change, transformation, and innovation. This blog represents his unique view of the emerging global newsmedia industry.
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