Marc Walder is living proof that fortune favours the brave. Over the last 13 years the CEO of Swiss media group Ringier has spearheaded a quite astonishing digital transformation at his company, branching out into marketplaces, ecommerce, ticketing and classifieds by buying up and successfully embedding a range of businesses.
With 72 per cent of Ringier’s EBITDA now coming from digital activity, it is fair to say the former tennis pro is playing a blinder. “Media companies in the 21st century need to be bold, courageous, ask questions, step into the learning curve and look beyond the business their in,” Walder advised during a wide-ranging discussion at FIPP’s World Media Congress 2020. “And they have to deliver good independent journalism.”
Ringier’s journey to becoming a broadly diversified business started when the company was at its peak. “I talked to the shareholders after we had one of our best years and said: ‘If we are all very honest it will never be as good again’,” Walder recalled. “We started the transformation and created new revenue streams into classified business and digital marketplaces.
“Are we going to cross-finance journalism with that? Not really. But it gives you the power to invest in technology, video and news forms in general – that’s what we actually do. Today we are further in transformation with our digital marketplaces than we are with our journalistic work. There are a lot of things to learn around technology and usage of data from the marketplaces for the media industries.”
Asking the right questions
Walder admits he had “many moments of doubt” as Ringier, which was founded in 1833, started to evolve. “If you pay 17 or 18 times EBITDA it means that, if the company is not growing, it takes you at least 18 years to get your money back and that’s a long period,” he said. “And the first business we bought was the Scout24 group and we actually did not understand digital marketplace or classifieds within this company.
“So we stepped into that learning curve. The learning curve is something I tried to bring into the company as an everyday task – you have to learn every day within our industry. A six-year-old child asks 45 questions a day, while a 50 year old only asks six questions a day. We should all go back to asking 50 questions a day to step into that steep learning curve that we are in.”
One of the early lessons Ringier took from its acquisitions is a how the ratio of journalist to technical staff was changing in offices.
“When acquiring digital pure player Onet in Poland, we asked the company owner how many out of its 450 employees were journalists and how many were tech and software engineers,” Walder explained. “He said about a 100 of them were journalists. This was a completely new world for us because in our newsrooms at the time, eight years ago, out of 300 people there were 280 journalist and there were a few crazy guys at the back of the office taking care of technology. We had to realise and accept that content is key but without technology content is nothing.”
Breaking with tradition
Ringier ’s constant evolution has seen the company move into some interesting non-traditional areas including a platform that provides access to lawyers and legal advice and a digital brand built around news and entertainment for young people in Africa.
Their innovation has lured investors who share the same forward-thinking attitude with Swiss insurance giant La Mobilière recently acquiring a 25 per cent stake in Ringier.
“They said, look we’re an insurance company we’re a market leader, we have to transform, we have to learn how services work in the digital world,” Walder explained. “It’s extremely interesting for them to know what we are doing and for us to know what they are doing. Digitisation brings completely different industries closer to each other than they ever were.”
To ensure Switzerland as a whole remains a digital innovation hub, Walder has launched an initiative called digitalswitzerland. “It’s the largest initiative of its kind in the country, “ he said. ‘We do a lot of start-up enablement, working on the regulatory framework, the taxation of start-ups, getting enough funding and working with schools. For kids, being able to code is the new reading and writing.”
A split personality
Such has been Ringier’s transformation that a fair question to ask is whether it is now a media company or a digital marketplaces company that has media. “Economically, it is a digital marketplaces company that loves media,” said Walder. “But the self understanding is that we are a media company. We feel like a publisher even though we do things that have nothing to do with typical journalistic work.
“Without journalism we would not be able to do what we are doing today. What we do is based on the fact that we have some of the most relevant publications in the countries where we are active. The mentality of still being a publisher even though we are a diversified company is extremely important.”
Ringier’s vision extends to its work practices, with the company going out of it’s way to promote diversity through a system called Equal Voice. “We have artificial intelligence in place that calculate in all the stories how many men are being displayed on our platforms and how many women. The ratio is incredible – in general 77 per cent are men. In sports it’s 95 per cent men. So we decided to increase the female ratio, bit by bit, getting in more female lawyers, doctors or politicians when we need to use experts.”
Asking people to pay
When it comes to the hot topic of paywalls and charging readers for journalism, Walder admits Ringier has been slow to act. “We chickened out on that one but we are prioritising this topic now because I am convinced advertising as a revenue stream is not going to be enough,” he said. “There needs to be at least a second strong pillar which is paid content. I’m fully aware of it and we are starting, probably late.”
Like all media companies, Ringier has been hit hard by Covid with Walder predicting “insecurity will last for another six months”.
“It’s been total disaster for everything that is advertising based and on the marketplaces side, jobs have been hit the most with companies freezing their hiring process,” he added. “The digital platforms have seen an increase in advertising but it’s much easier spending your advertising money on Facebook and really difficult, in terms of convenience to spend your money with media brands so that ‘s an extremely weak point.”
According to Walder the pandemic has underlined the importance of well-researched reporting. “Covid has taught us that the hunger and need around reliable relevant information has never been bigger,” he pointed out. “If the internet is a very loud place with a lot of content for people to consume – like rain pouring down on you – those media brands who clarify, explain, who are relevant and credible, they will win the race in the end. It’s about helping people find their way in a life that’s become complicated.”