Trinity Mirror: in talks to buy rival Local World
Trinity Mirror: in talks to buy rival Local World
A view from Ben Bird

Engineering value in a consolidating market

In a rapidly consolidating marketplace it is more important than ever for media companies and publishers at every level to stand out.

One way to achieve this is by making sure the business is firing on all cylinders when it comes to demonstrating operational efficiency.

Every pound delivered to the bottom line is worth many times more in enterprise value and could help to position the business for a merger or acquisition that could transform its fortunes.

Earlier this week, Trinity Mirror confirmed it is in talks with regional media publisher, Local World, with a view to acquiring a majority shareholding in the business.

If it goes ahead, the deal could bring mutual benefits. For Trinity Mirror, the acquisition of Local World would instantly increase the scale and reach of the business while allowing scope to extend some of its digital offerings and drive efficiencies. For Local World, the main benefit would be a great return for investors.

Regardless of whether businesses in the sector are embarking on a proactive M&A strategy or not, engineering value by making efficiencies can have a positive effect on business performance and help to attract market interest.

Some ways that organisations can engineer value include:

Adopting common systems and procedures

Multi-sited publishers need to move away from a silo-based approach to management and adopt a single set of operational systems and procedures which apply to all their on and offline business interests.

This commonality can be achieved without losing localness and it brings opportunities to make effiiciencies and creates a stable platform from which to develop and launch new offerings.

It also facilitates a more integrated approach, allowing content to be reused across multiple platforms more readily, which in turn helps to drive value.

Understanding where content comes from

To achieve work-flow efficiency, the business needs to know the source of content in order to decide how and where to reproduce it, across its various media platforms.

This approach allows the business to aggregate essential but simple content, and manage it in a low-cost way whilst freeing up time and resource to focus on bigger local issues. For example, most organisations find that some content can be used from source with only minor alterations or supervision.

Such alterations to work flow can have a dramatic effect on operational efficiency and help to drive output quality too.

Re-shaping organisational structures

Rather than waiting for change to happen, multi-sited media businesses should be aiming to restructure their organisations to improve efficiency and provide products that match the shifting demands of the market.

Commercial content is available to end users on a self-serve basis, allowing them to book their own campaigns, and editorial content is increasingly being created outside of the traditional newsroom.

The organisation may therefore need to restructure to take account of how its content is sourced. Acting early also means the business can position itself at the forefront of market changes, which is more likely to appeal to potential investors.

Communicate a clear market proposition

Do your sales teams (and therefore your customers) understand your complete market proposition?

If not, helping them to understand the value of everything you do could help to improve efficiency and increase overall sales. For example, individual sales people need to be equipped to sell digital and print media display space competently.

The simpler you can make it for them to do this by providing them with clear messaging and structures, the more likely you are to see an up-tick in sales.

Using data analytics

To make efficiencies in the right places, the business needs to understand exactly where its value lies.

Using some of the latest data-analysis tools, it is possible to obtain a clear picture of which products, and which markets, are delivering the biggest contribution to the business in terms of income and operating profits.

The starting point is to design a bespoke data-gathering system that allows you to pool and analyse data quickly and easily.

The insights generated can then be used to guide strategic decision-making, in areas such as business investment, on a real-time basis.

Conduct an 'opportunity analysis'

In a fast paced industry it is especially important that businesses are able to respond to market opportunities quickly. By conducting an 'opportunity analysis' of its spending and reviewing it regularly, the business will be better placed to draw conclusions about where it might be possible to make efficiencies and do things differently.

At a time when advertising revenues continue to fall, media businesses are seeking to consolidate to gain the scale necessary to achieve efficiencies and extend the reach of digital business initiatives more quickly.

The ability to demonstrate market-readiness and efficient management systems will be critical to their success.

Ben Bird is a director at Vendigital