Vertical markets set to improve market reach

· Christiane zu Salm presents the strategy:
  “We want to be the leading cross-media company in Germany.”

· Innovative cross-media platform for Burda brands and partners

· Programme partnerships with ProSieben and MySpace

Christiane zu Salm, who has board-level responsibility for cross-media activities at Hubert Burda Media, has set up the Cross Media division and is establishing the strategic and operational platform for Hubert Burda Media’s future publishing-related digital business. “The purpose of this action is to achieve the group’s objective of generating a third of its revenue from digital markets by 2011,” explains Christiane zu Salm, who joined the Burda board on 1 April.

Vertical markets set to improve market reach

The cross-media strategy aims to focus on target groups strictly according to fields of interest. Vertical markets will be created, in which the Burda brands will be bundled and marketed together with partner brands (see figure). This will improve market reach, thus creating new potential for generating revenue from online advertising and e-commerce.

Initially, these vertical markets will be created in the high-consumption categories of People & Style, Living and Food, in which Hubert Burda Media is strongest. The People & Style vertical market will thus have the biggest online market reach in the German market right from the start, with 66 million page impressions and a market share of 35 percent (source: IVW, May 2008). The Living vertical market comes next with 7.4 million page impressions and a market share of 34 percent (source: IVW, May 2008).

The Burda Cross Media Grid: a cross-media platform for Burda brands and partners

The aggregation and marketing platform for the vertical markets is the newly created Burda Cross Media Grid. The term “grid” describes the architecture of the cross-media network. The Burda brands, vertical partners, newly created and purchased sites and video and e-commerce offerings are integrated across the different media platforms and forms of revenue. All the brands are interlinked across the various media but still retain their independence in the market.

Right from the start, over 40 Burda brands, communities, video formats and e-commerce sites with a total market reach of over 500 million page impressions will be aggregated (source: IVW, May 2008).

A central online content pool will be developed to continue marketing the content of the Burda brands on the Internet, and this will also be open to external partners. It is linked via the Burda Community Network (BCN), the central marketing organization, by the BCN Digital coordination unit newly established in the Cross Media division. TOMORROW FOCUS AG will market the new aggregated content online. This will be performed concurrently with the existing online marketing of the Burda brands by the Burda Community Network.

“The Burda Cross Media Grid is a comprehensive, innovative and – in the German market – unique range of cross-media, target group-based offerings for our advertising clients, consumers and partners. It is open to any company that wants to grow with us,” says Christiane zu Salm.

Online advertising and e-commerce as revenue generators

The vertical markets are monetized by means of display- and performance-oriented marketing and e-commerce. “These Internet markets will grow significantly in the next few years. We intend to tap into these with lasting effect,” asserts Christiane zu Salm. Net online advertising revenue in Germany is forecast to grow from 1bn euros in 2008 to 1.6bn euros in 2011, while from the total volume of e-commerce will increase from 20.5bn euros in 2008 to 28bn euros in 2011 (source: PWC Market Outlook). Additional revenue potential will be exploited through intelligent targeting and the marketing of newly-generated customer profiles.

Video integral to Burda Cross Media

As a leading print and online-based media company, Hubert Burda Media expects digital and mobile video to become an important field of growth. Burda Cross Media will therefore create innovative video content and market it on cross-media platforms such as IPTV, websites and mobile devices as well as analogue and digital TV channels.

“We can see new opportunities in the video market, and we intend to exploit them,” says Christiane zu Salm, who will bring to bear her many years of TV experience with new business models. Programme production will take place in Burda’s own studios and with leading production partners. Initial pilots have been successfully launched and marketed together with BUNTE, Playboy and freundin.

Strategic partnerships with MySpace and ProSieben

Burda Cross Media is launching a partnership with MySpace, the world’s largest social network, on 1 July. MySpace Germany recently attracted 4.8 million unique visitors from within Germany in a single month and recorded a total of 854 million page impressions (source: ComScore in April and IVW in May 2008). The focus of this programme and marketing partnership is on video formats. The partnership combines the strong Burda media brands with social networking communities and allows the brands to address younger target groups efficiently on the emotional level.

In addition, Burda Cross Media will also be working with ProSieben in future on cross-media event organisation. This will be launched with ELLE Fashion Star in 2008, which will be presented by ELLE on 19 July together with its principal partner Mercedes-Benz and televised by ProSieben in a special programme.

Another Burda Cross Media partner is sevenload, the leading independent Internet video platform in the German-speaking countries with around a million unique users (source: AGOF internet facts 2007-IV) and over 300 video formats, which can thus be integrated in creative campaigns.

Further investments and acquisitions planned

Burda Cross Media intends to expand its publishing-related digital business with strategic investments and acquisitions. One example is the company’s holding in US company Glam Media, which has the greatest reach of any publisher network in the women’s market with over 60 million unique users (source: ComScore, May 2008) and is also showing the fastest growth.

In addition, Burda Cross Media is involved in the latest financing package for sevenload with lead investor T-Venture. The package is yet to be approved by the competition authorities. Moreover, targeted acquisitions of fast-growing online companies are also being considered.

For further information:
Hubert Burda Media
Nikolaus von der Decken
Company spokesman
Phone +49 (0) 89 / 9250 – 2575
presse@burda.com
www.hubert-burda-media.de