Making Diversity Work at Ninemsn

Integrating strategy for a rapid-growth and highly-segmented business in a very large organisation brings a particular set of challenges.

In July 2008 Dean Capobianco took on the role of director of mobile phones and is now also director of operations at ninemsn's Platform 9 division, covering technology development, IT and product strategy. Upon arriving, his immediate task was to figure how a range of 17 different products could be brought into line with the company's overall game plan.

"Mobile is a broad kind of remit," Capobianco says. "I really took the first three months of my role to just understand what people did, what all of the functions of the business were and how they were performing both in the mobile business and how they were contributing to the broader digital business."

Then Capobianco spent the next 90 days looking at where mobile's operations aligned with the digital business, "because until that point mobile had been operating as a separate business on the fringes of ninemsn".

Ninemsn is the digital arm of the Publishing and Broadcasting Limited media empire, which includes Australian Consolidated Press magazines and Channel Nine. Three years ago ninemsn bought out two companies that were developing leading mobile phone technology platforms for content delivery, aggregated data start-up HWW and SMS messaging pioneer Fifth Finger, bringing both businesses into its mobile phone division. Ninemsn's own mobile business encompasses the organisation's media content, its acquisitions added managed content services, a messaging platform, hosting environment and a gateway service connecting to all the telcos as well as application development capabilities, and both brands continued to operate as discrete entities under the ninemsn mantle.

Through December and January Capobianco says the mobile division conducted a midyear review, analysing the profitability of all of its products and services. "The business was playing in a lot of areas and the 17 different products and services were a reflection of all of the different directions it was going in, as well as all the different areas that consumers were going in. The market has changed a lot in the last few years."

After analysing profitability, growth and areas of alignment with ninemsn's digital brands, Capobianco set about restructuring. "We integrated the commercial team into ninemsn sales, the mobile sales team into the broader commercial division and we're in the process of integrating the content team into the content verticals across the business. My view was that mobile is not really a separate business, it's another product we have as ninemsn and it's a channel."

In the next six to 12 months he aims to improve the alignment of mobile's messaging, content syndication and partner services.

Page Break

Keep it simple

To facilitate these changes Capobianco streamlined the array of mobile phone products and services into four streams. "We have a commercial team that looks after all advertising and marketing. Mobile now becomes part of a much broader advertising solution for advertisers."

The second stream includes the Windows Live Messenger through the msn services and on the Web. Content syndication, part of the HWW business, is a comfortable fit as a third stream. "To give you an example, we have a licence with Optus that is a Web plus mobile licence so it's the same content through one feed that we then give them with rights across both," he explains.

The last component is partner services. "Ninemsn has a strategic partner division where we look at aligning ourselves with companies such as Seek,, CarPoint, Domain, there's a whole lot of those partners where we look way beyond just an advertising and distribution deal. They really are designed to generate revenue and profits for both businesses and mobile is a very important part of that because of our mobile infrastructure capabilities through messaging and hosting, application development and other managed content services."

Capobianco's approach is designed to allow the mobile division to be flexible and responsive. "I think we are well positioned to be fairly dynamic and move quickly and that's really one of things that is critical, because the Fifth Finger business has changed so much in two years things are going to change just as quickly in the next two. Technology is changing every day and our job is to keep up with that and deliver what people want."

He cites an example of market evolution represented by premier SMS services. He says that how the industry is evolving is demonstrated by the migration from subscription-based services such as ringtones, downloads and wallpapers to paying for total data consumption, picking and choosing the products and services for a monthly coverall fee. "The commercial model has moved to an advertising-funded model where we provide all those services to create high levels of engagement through all the plans we have. That's a big change for the mindset of our business."

Capobianco sees the major challenges as tracking trends quantitatively and responding appropriately. "We need to have better reporting, audience and media consumption reporting, measurement of page views and engagement that allows us to get a better understanding of our audience so we can provide better solutions."

Where demand is heading

The Australian Interactive Media Industry Association's most recent traffic report, polling key digital publishers such as Sensis, Yahoo and Vodaphone, measured compound annual growth to be 89.3 percent, based on the data that was provided in the last quarter of 2008. "Our page volume growth in the same period was 164 percent," he says.

Page Break

"The challenge is to really understand consumer behaviour and how quickly that will evolve and how quickly we can evolve with that. We're seeing some quite staggering figures across our sites and what we're projecting is growth that is faster than the industry growth AIMIA has published," Capobianco reveals. "When you summarise it, people are consuming data, media from the brands they are familiar with, on their mobile phones. They are looking for other services on top of their phone and messaging capabilities."

These in-demand branded services include Window Live social messaging and ninemsn products such as Wide World of Sports, Nine News and the HWW entertainment guides, content that is syndicated to big names such as Citysearch and through Vodaphone, Hutchison Optus portals. "We are now licensing our Windows Live product through all the carrier portals because News and Windows Live are two products people are using daily," he says.

He attributes the mobile division's ability to respond rapidly to the luxury of resources that comprise the ninemsn digital business and the technology and development skills lined up behind the brands. "That gives us the ability to move quickly if we see there is a high strategic business priority. We have eight million-plus monthly users on ninemsn so our goal is engaging those people from a mobile perspective and trying to understand how mobile plays into their daily media consumption behaviours."

Facing forward

Copabianco says he's eagerly anticipating the price of data packs from telcos plummeting in price. "We think people will consume a lot more data on their mobile phones once data consumption costs less. The figures have come down considerably in the last couple of years. That will allow the consumer a lot more media on their mobile phones because that is still a little bit prohibitive at some levels of the market. People are still conscious of bill shock. I still am."

That said, he notes that the technology team works with the content producers to optimise all ninemsn products for mobile phones, using handset detection technology.

"Mobile phones are quickly becoming media devices and I'm sure all the handset manufacturers are thinking about all of the angles to meet all of their core markets," he says, giving the example of the Telstra Hiptop device. "That is a social networking tool and it's no surprise that we've seen extraordinary growth of our Hotmail and Messenger products on the Hiptop in the last six months because of the nature of the device."

He says handset manufacturers are now approaching the design of mobile phones from the point of view of integrating specific products to meet market segments and brokering deals that service them. "Microsoft has done a global deal with Blackberry so the phone carries Messenger and Hotmail applications as part of the device. We're offering the same products to all of the carriers across all of their portals."

Ninemsn mobile also did a deal with Hutchison in 2008 to provide Windows Live applications on their youth market-targeted Ink device. Capobianco believes this is a strongly emerging trend. Where handsets used to drive content, the position is now being reversed. "We are seeing that handsets are now being manufactured specifically for certain demographics and they come equipped with all sorts of tools, operating systems and applications. It's good to be in a position where we have so many assets and angles to our business, so many brands because we cater to different corners of the market."

Keeping it together

Capobianco's greatest challenge is maintaining a strategic overview of ninemsn's sprawling complexity.

"It's easy for everybody to take a micro view of what they're doing every day rather than lifting their heads and realising what the opportunities are in the marketplace," he says. He promotes team discussion, sharing research and meticulously workshopping mobile products and applications to try to capture market directions.

"It's a lot of work because you are constantly thinking because the space is moving so fast, but that's the enjoyment. It's the part of my role that's a challenge but it's also the fun. I just love the fact that what we do is evolving and it's evolving by the day. It's nice to work in an environment where things are always changing."

Copyright © 2009 IDG Communications, Inc.

6 digital transformation success stories