Sharechat Logo

How Stuff makes money from its audience: Fairfax outlines digital strategy, competitive advantage

Thursday 3rd May 2018

Text too small?

Fairfax Media, the Australian parent of New Zealand's Stuff, says the company is focussed on increasing its revenues from selling advertising and audience data, as it closes down the "long tail" of its regional newspapers.

In a presentation to a Macquarie Australia conference published to the ASX, Fairfax chief executive Greg Hywood outlined Stuff's financial status and plans for the future.

Stuff's revenue fell 8 percent in the period from Dec. 25 to April 22, and Hywood said Fairfax is continuing to implement cost-saving measures across the group. Stuff reaches 90 percent of New Zealanders, he said, providing it with "compelling competitive advantage". 

Half of Stuff's revenue comes from its top five mastheads, which includes The Dominion Post and The Press, while non-print revenue accounts for 17 percent, from 5 percent just four years ago and "growing rapidly", Hywood said. 

"In New Zealand, our focus is on leveraging the enormous power of Stuff into growing digital, transactional and advertising revenues, while rationalising the long tail of print," Hywood said. "Mass audience is being monetised through the Stuff digital platform, premium industry programmatic exchange KPEX, third-party syndication and standalone print products."

Stuff is closing or selling 35 percent of its New Zealand print titles this year as the Australian group pursues a digital strategy for the kiwi unit. KPEX is a New Zealand advertising exchange, established last year by Stuff, MediaWorks, NZME and TVNZ. It allows advertisers to target audiences across seven verticals: news, sport, lifestyle, entertainment, travel, business and technology, using the websites of the four media companies involved.

Stuff's Neighbourly community platform has "very effectively built membership models of large, highly engaged and loyal audiences" with 1.2 million members, Hywood said. Stuff earns money from Neighbourly through "audience targeting and data products."

Hywood said Stuff is "leveraging its strong market position into a broader consumer ecosystem" with businesses including internet service provider Stuff Fibre and "lead-generation partnerships with utilities, health insurance and financial service providers."

Fairfax's New Zealand media revenue fell 4.5 percent to $160 million in the six months ended Dec. 31, while earnings before interest, tax, depreciation and amortisation dropped 24 percent to $20.7 million. Of that, print advertising sales dropped 15 percent to $77.2 million, while print subscriptions slipped 4.3 percent to $48.8 million. Digital revenue jumped 33 percent to $24.2 million.

Stuff attempted to merge with NZME but was blocked by the Commerce Commission over fears the resulting public interest loss of media diversity outweighed the economic benefits of the deal. That decision was upheld by the High Court, although the media companies have since sought leave to contest that decision in the Court of Appeal. In March, the two said they will renegotiate the terms of their merger if they successfully appeal the High Court's rejection of their deal.

Fairfax's ASX-listed shares last traded at 75.5 Australian cents, up 0.7 percent today, and have gained 8 percent in the past 12 months.

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar holds near 15-month high vs pound as Brexit woes threaten May's leadership
MARKET CLOSE: NZ shares gain as defensive stocks find favour; Contact, Meridian rise
NZ dollar firm against greenback as risk appetite ticks up
Cleantech start-up Mint Innovation raises $5.2M to prepare for commercial deployment
BurgerFuel starts full strategic review of business
NorthWest hires lobbyist to solicit Vital Healthcare votes
Greater transparency sought in gas sector
Cap proposed for transmission pricing changes
Ryman Healthcare: service provider or property play?
Wrightson shareholder Agria settles US fraud, market manipulation claims

IRG See IRG research reports