Johnston Press' trasformation strategy

Johnston PressTOWARDS 2020: TRANSFORMING LOCAL MEDIAACROSS THE UNITED KINGDOM & REPUBLIC OF IRELANDVISION, STRATEGY AND EXECUTION PLANAPRIL 201225 April 2012 Towards 2020 www.johnstonpress.co.uk

Towards 20201. VISIONMIDLANDS THURSDAY 16 FEBRUARY 2012 13:58Anna James looks through the Peterborough Telegraph25 April 2012 Towards 2020 1 www.johnstonpress.co.uk

Vision 2020VISION  Fundamental consumer needs remain  It will be much more of a partnership consistent: knowing whats happening with the communities we serve in your local community and having a trusted platform to engage in the debate  Building deeper relationships with our audience and advertisers will enable us to  Reaching an engaged audience with move beyond publishing and our traditional services of interest to them remains footprint into providing services that make a key marketing goal of local and the lives of our audiences and advertisers national businesses easier, more efficient, better informed, and more fun, whether they live in,  Serving both these communities, audiences commute to, or visit our communities and advertisers, in a trusted, quality, and authentic way, will remain the core focus of Johnston Press  The future of local media will however be very different in its delivery. It will be predominantly digital on a daily and hourly basis with most print editions being a weekly, in-depth, read25 April 2012 Towards 2020 2 www.johnstonpress.co.uk

Vision 2020WHAT WILL LOCALMEDIA BE LIKE IN 2020? Community is becoming more, REMAINING not less, important RELEVANT AND TRULY PAN- Continue to focus on news, business, MEDIA WITH REMAINING sport, entertainment, and community SIGNIFICANT POPULAR SHIFTS IN REMAINING Advertising will continue to be a mix of Property, PRODUCTION AND EFFECTIVE Autos, Jobs, Classifieds and run of page, complemented by large increase in behavioural CONSUMPTION… targeted advertising and genuine national advertising Journalists and ad-sales staff on REMAINING the ground, in the heart of the PRODUCED BY community - our continuing USP LOCAL PEOPLE25 April 2012 Towards 2020 3 www.johnstonpress.co.uk

Vision 2020WHAT WILL OUR BUSINESSMODEL BE LIKE IN 2020? AUDIENCE CONTENT CREATORS MEDIA CONSUMPTION 2011 2020 DIGITAL PRINT USERS JOURNALISTS DIGITAL PRINT25 April 2012 Towards 2020 4 www.johnstonpress.co.uk

Vision 2020WHAT WILL OUR BUSINESSMODEL BE LIKE IN 2020? BUSINESS MODEL 2012 2020 220 paid-weekly titles All titles will lead with digital first, few Product 18 dailies daily print 75 free titles Fewer free printed papers, integrated Portfolio 238 paid print/online subscription bundles 50% subscription - business run on ARPU Subscription 3% subscription basis Local brands still core, but 20% or 99% value tied to more contribution from local/ national Brand value local brands services, e.g., DealMonster, SME portal, entertainment listings service25 April 2012 Towards 2020 5 www.johnstonpress.co.uk

Vision 2020WHAT WILL THISMEAN FINANCIALLY? REVENUE ARPU TURNOVER AND PROFIT PRINT V DIGITAL (ANNUAL) (£M) 2011 2020 DIGITAL PRINT DIGITAL PRINT PROFIT TURNOVER25 April 2012 Towards 2020 6 www.johnstonpress.co.uk

Vision 2020A BUSINESSBASED ON ARPU INCREASING ONLINE ARPU DRIVES PROFITABILITY PRINT & DIGITAL REVENUE & ARPU £0.70 (EXCLUDES OTHER JP 500 (£1.4m/ 2m users) REVENUE STREAMS) £452.4m £10.00 (£200m/ £2.00 £4.41 20m users) (£53m/ £400m 400 (£10m/ £2.87 12m users) 5m users) (£23m/ £353m £343m 8m users) £318m TURNOVER (£M) 300 Digital 200 £32.00 £30.00 £29.50 £30.00 £25.00 Print (£451m (£333m (£295m (£300m (£200m revenue/ revenue/ revenue/ revenue/ revenue/ 15m users) 11m users) 10m users) 10m users) 8m users) 100 2008 2010 2011 2015 2020 £ GROSS PROFIT/£’m/ OVER DOUBLE MARGIN ASPIRATION 128 72 N/A CURRENT MARGIN+ CURRENT MARGINNote: Future revenue, profit, and margin numbers are not forecasts25 April 2012 Towards 2020 7 www.johnstonpress.co.uk

Vision 2020WHAT WILL THIS MEANORGANISATIONALLY? ORGANISATION 2012 2020 Mostly journalists Many more community Staff Mix or ad sales contributors Regional and Flatter and more functionally Staff Layers hierarchical organised Functional Multiple printing Consolidated print sites Centres sites and call centres and call centres Centre v High degree of More central templating, regional Local local autonomy editorial hubs where relevant People Journalists on the ground in every town (it’s our USP)25 April 2012 Towards 2020 8 www.johnstonpress.co.uk

To 2015 2. STRATEGY NORTH TUESDAY 21 FEBRUARY 2012 10:45 Tom and Owen Smith check out what’s on at the weekend with the Halifax Courier25 April 2012 Towards 2020 9 www.johnstonpress.co.uk

Strategy to 2015WELL POSITIONEDFOR FUTURE GROWTH STRONG CORE ON THE GROUND STRONG COMPETITIVE INCREASINGLY COMPETENCIES PRESENCE POSITIONS DIGITAL BUSINESS  Focused on core  2000 local  Leading positions  Rapidly growing business – local journalists – throughout the UK digital audience media – unrivalled (changing and Ireland – No 1 understanding of mix towards brand in most of  Pipeline of digital our local markets citizen/freel our markets developments and customers ance)  Majority of weekly  Industry leading  1500 local products investment in sales staff process (moving up technologies the value chain)25 April 2012 Towards 2020 10 www.johnstonpress.co.uk

Strategy to 2015 AGGREGATEOUR AGGREGATE 30 AUDIENCE (ALL MEDIA) 25AUDIENCE IS GROWING AUDIENCE (millions of 20 unique users)SIGNIFICANTLY 15 2010 2011 2012 2020 ONLINE  Newspapers continue to be AUDIENCE 25 a core element of media mix, 20 weekly declines can be arrested 15 through relaunch – world class 10 design and content 5  Online will become dominant 2010 2011 2012 2020 medium for local news & services NEWSPAPER AUDIENCE 20  Combined audience changes are 15 significantly positive for us and -6% -5% 10 -2% represent a fundamental driver of our future growth 5 2010 2011 2012 202025 April 2012 Towards 2020 11 www.johnstonpress.co.uk

Strategy to 2015MULTIPLE REVENUE STREAMSFROM DIGITAL PUSH MON TUES WEDS FRI SAT/SUN THURS Daily Digital Daily Digital Daily Digital Daily Digital Daily Digital Daily Digital Newspaper Newspaper Newspaper Newspaper Newspaper Newspaper IPAD/TABLET APP: APP FEE AND BUNDLED SUBSCRIPTION REVENUES News updates News updates News updates News updates News updates News updates Social media Social media Social media Social media Social media Social media WEBSITE: ADVERTISING REVENUES Smart phone Smart phone Smart phone Smart phone Smart phone Smart phone SMART PHONE: ADVERTISING REVENUES, TASK ORIENTED E-COMMERCE Weekly Paper: REVENUES AND MICROPAYMENTS Newspaper Cover price & advertising revenues25 April 2012 Towards 2020 12 www.johnstonpress.co.uk

Strategy to 2015MOBILE WILL BE THEKEY GROWTH CHANNEL  Mobile services reach  Mobile users are  These consumers access a new demography task oriented and our content because it who may not buy our have a high propensity provides the utility newspaper or live inside to purchase they need (e.g. football our franchise area results) and they trust the brand USER PERFORMS JP TITLES USE SEO AND SEM TO USER CLICKS THROUGH AND LOCAL SEARCH RANK HIGH IN SEARCH RESULTS COMPLETES TASK/ MAKES PURCHASE ON JP SITE25 April 2012 Towards 2020 13 www.johnstonpress.co.uk

Strategy to 2015MOBILE WILL BE THEKEY GROWTH CHANNEL Announcing today the launch of free football smartphone apps for 10 titles25 April 2012 Towards 2020 14 www.johnstonpress.co.uk

Strategy to 2015 GROWTH WILL ALSO COME FROM LEVERAGINGAGGREGATE OUR LOCAL CONTENT ASSETS TO CREATE NATIONALCONTENT TO BUSINESSES WITH DIVERSIFIED REVENUESCREATE VERTICALS 250+ JOHNSTON PRESS LOCAL CONTENT FEEDS, UK AND IRELAND +SOCIAL MEDIA CONTENT +SYNDICATED CONTENT +COMMERCE AND PARTNER SERVICES +ADVERTISER CONTENT FROM OUR SME CRM DATABASE25 April 2012 Towards 2020 www.johnstonpress.co.uk

Strategy to 2015FIRST 90 DAYS SET NEW VISION RETAINING RAPID PROGRESS AUDIENCE LOYALTY AND STRATEGY  Engaged top 130  Management delayered  Weekly newspaper management sales performance  Finance function best in class  Prepared vision, strategy centralised and execution plan  Year-on-year growth of  Print press closed almost 50% in monthly  Increased communication unique browsers with all staff  Business processes standardised  Relaunch initiative started25 April 2012 Towards 2020 16 www.johnstonpress.co.uk

Strategy to 2015TURNING THE CORNER  Local display advertising resilient JOHNSTON PRESS PUBLISHES 9 OF THE 25  50% increase year-on-year digital audience  Online inventory up… monetization improving UK WEEKLY NEWSPAPER TITLES  Non-advertising revenues THAT REPORTED A YEAR-ON-YEAR flat/increasing SALES GROWTH IN 2011  Investments in central (ABC circulation data) technology enabling growth  Pricing and productivity benefits identified – further scope for value creation in 201225 April 2012 Towards 2020 17 www.johnstonpress.co.uk

Strategy to 2015SUMMARY ASPIRATION BY 2020  Sustainable print audience, rapidly growing online audience SALES £400m  Margins driven by lower input costs, lower customer acquisition costs (increased ARPU) and higher margin PROFIT OVER DOUBLE digital businesses 2011 MARGIN  Continuous product leadership in local print, mobile and online 50/50 REVENUE SPLIT  Leverage local content assets PRINT/ONLINE to create national verticals with diversified revenue streams  On-going productivity improvement, process excellence and cost reduction25 April 2012 Towards 2020 18 www.johnstonpress.co.uk

Towards 2020 3. EXECUTION PLAN SOUTH FRIDAY 17 FEBRUARY 2012 16:25 Tom James updates his company’s advertising in the Hastings Observer25 April 2012 Towards 2020 19 www.johnstonpress.co.uk

Execution PlanOVERVIEW 1. BUILDING OUR BRANDS Extend local trusted brands across platforms 2. RE-LAUNCH ALL TITLES Increase margin, grow circulation and audience 3. ACCELERATE DIGITAL STRATEGY Build out online classifieds, create new vertical content businesses 4. EXPLOIT TECHNOLOGY Increase productivity and scale25 April 2012 Towards 2020 20 www.johnstonpress.co.uk

Execution Plan Step OneBUILDINGOUR BRANDSSOUTH WEDNESDAY 7 MARCH 2012 12:30Alan Jones catches up on the local news during his lunch break25 April 2012 Towards 2020 21 www.johnstonpress.co.uk

Execution Plan Step One: Building Our Brands BUILDING OUR BRANDS 18 PAID-DAILY NEWSPAPERSEven greater relevance SIGNIFICANT LOCAL 220 PAID-WEEKLY NEWSPAPERS BRAND PORTFOLIO HIGH LEVEL OF COMMUNITY LEGITIMACY 238 LOCAL WEBSITES AND CONSUMER TRUST UNQIUE CONTENT: 100,000+ ARTICLES ANNUALLY 30 FREE-WEELKY NEWSPAPERS 7 MAGAZINE TITLES25 April 2012 Towards 2020 22 www.johnstonpress.co.uk

Execution Plan Step One: Building Our Brands MORE RELEVANT IN DIGITAL AGE PEOPLE HAVE 85% 81% AGREE BECOME “ The recession has INCREASINGLY 81% made supporting SUPPORTIVE 50% your local community more important.” OF THEIR LOCAL 80% 84% COMMUNITY 83% 83% 79% 71% 78% 83% 90% Source: NS/Loving Local Survey 201125 April 2012 Towards 2020 23 www.johnstonpress.co.uk

Execution Plan Step One: Building Our Brands PEOPLE ARE SPENDING TIME LOCAL AND MONEY LOCALLY FOCUSOpportunity for advertisers to reap benefit LOCAL MEDIA IS TRUSTED AND INFORMS PEOPLE ABOUT LOCAL AREA Which of these contains content that you trust? 80% TIME 92% TIME Which of these is relevant to know that the area is improving? I spend half or more of my I spend half or more of my time within 5 miles of home time within 10 miles of home 74% MONEY 89% MONEY I spend half or more of my I spend half or more of my Source: NS/Loving Local Survey 2011 money within 5 miles of home money within 10 miles of home25 April 2012 Towards 2020 24 www.johnstonpress.co.uk

Execution Plan Step One: Building Our Brands LOCAL AND MOBILE LOCAL MEDIA IS AN ACTION BASED MEDIUM – ACTION BASEDOpportunity for advertisers to reap benefit 45% USED A PRODUCT/ 50% VISITED A STORE/ CAPITALISE ON GROWING UK’S LEADING SEARCH SERVICE DUE TO AD OUTLET DUE TO AD TREND TO ‘LIVE LIFE LOCALLY’ ENGINES SEE STRONG  Trend to mobile searches TREND TOWARDS ‘LOCAL’ and immediate  Google has seen mobile fulfilment search increase five-fold  Uniquely positioned to worldwide in past two capitalise on the years migration to ‘social’,  Bing report that 50% of 51% USED COUPON/ 64% LIKE TO SEE NATIONAL ‘local’, ‘mobile’ mobile search queries MONEY-OFF VOUCHER BRANDS ADVERTISING IN have local intent THEIR LOCAL PAPER  Bing report that 70% of task completion happens within one hour 60% TAKE ACTION AS A RESULT OF AN AD Source: mashable.com/2011/07/12/mobile-search-trends-google-bing/ Source: NS/Loving Local Survey 201125 April 2012 Towards 2020 25 www.johnstonpress.co.uk

Execution Plan Step One: Building Our Brands BUILDING OUR BRANDSRelaunch mobile news websites ALREADY OVERHAULED WEB CONTENT MANAGEMENT SYSTEM AND NOW STARTING TO ROLL OUT MOBILE (IPAD AND SMARTPHONE) APPS Examples of the re-launched mobile news websites:25 April 2012 Towards 2020 www.johnstonpress.co.uk

BUILDING OUR BRANDS25 April 2012 Towards 2020 www.johnstonpress.co.uk

Execution Plan Step One: Building Our Brands BUILDING OUR BRANDS Since launch of Scotsman app on 23rd Jan….Even greater relevance 10,000 DOWNLOADS (To 25 April) 750 SUBSCRIBERS (since subscription period for first users 22 Feb to date) 2400 TARGET SUBSCRIBERS FOR YEAR 125 April 2012 Towards 2020 28 www.johnstonpress.co.uk

Execution Plan Step Two RE-LAUNCH SOUTH TUESDAY 6 MARCH 2012 11:00 Kate and Sarah check out the fashion pages in etc during their break at work25 April 2012 Towards 2020 29 www.johnstonpress.co.uk

Execution Plan Step Two: Re-Launch RELAUNCH IMPLEMENTATION PROGRAMME 2012 RELAUNCH WHY RELAUNCH?  Increase margin  Align pricing PHASE 4  Increase circulation 60 titles Nov 2012  Increase aggregate audience  Cross promote PHASE 3  Drive online traffic 37 titles Sept 2012 WHAT WILL RELAUNCH INCLUDE? PHASE 2  Newspaper redesign 53 titles  Format changes (5 daily-to-weekly, July 2012 & broadsheet to compact) PHASE 1  New editorial workflow 18 titles  Best practice content May 2012  Enhanced advertiser proposition25 April 2012 Towards 2020 30 www.johnstonpress.co.uk

Execution Plan Step Two: Re-Launch WEEKLY NEWSPAPER CIRCULATION AND COVER PRICE CHANGES WHY RELAUNCH? (JANUARY TO JUNE 2011) INCREASE MARGIN IND NC NQ TM JP 10% 5% 0% (5)% Change in circulation (10)% (15)% INCREASE COVER PRICES WITHOUT (20)% (25)% ADVERSELY IMPACTING CIRCULATION (30)% (35)% TO MAXIMISE REVENUES FROM (40)% 0% 5% 10% 15% 20% 25% NEWSPAPER SALES Cover price increase  No direct correlation between weekly WEEKLY NEWSPAPER COVER PRICE AND CIRCULATION CHANGES newspaper circulation and cover price (JANUARY TO JUNE 2011) changes 10% IND NC NQ TM JP 5%  No direct correlation between actual 0% cover price and circulation change (5)% Change in circulation (10)%  Coleraine Times: cover price £1 but (15)% (20)% circulation declines were limited to 2% (25)% (30)% (35)% (40)% £0.00 £0.20 £0.40 £0.60 £0.80 £1.00 £1.20 £1.40 £1.60 June 2011 Cover price25 April 2012 Towards 2020 31 www.johnstonpress.co.uk

Execution Plan Step Two: Re-Launch WHY RELAUNCH? ALIGN PRICING HORSHAM AND HARROGATE – £1  Anomalies of high socio-demographic readership in strong local economies with lower cover prices than low socio- BOTH UPMARKET demographic readership in relatively BROADSHEET weaker local economies NEWSPAPERS, YET:  Price realignment addressed at re-launches/repositioning 65p25 April 2012 Towards 2020 32 www.johnstonpress.co.uk

Execution Plan Step Two: Re-Launch WHY RELAUNCH? INCREASE CIRCULATION CAPITALISE ON POSITIVE Sales performance of reformatted titles IMPACT TITLE RE-LAUNCHES Title Date Sales trend Sales trend % improvement HAVE ON AUDIENCE changed pre Change post change Lancaster Guardian May-11 (8.8)% 6.8% 15.6%  Positive circulation impact on all re-launches to date Falkirk Herald Nov-11 (8.6)% 2.7% 11.3% Hemel Gazette Sep-11 (12.0)% (2.2)% 9.8%  Opportunity to increase audience impact - improve Isle of Man Examiner May-11 (9.2)% (0.5)% 8.7% cross-promotion, content Brighouse Echo Oct-10 (16.4)% (9.8)% 6.6% and print/online integration Fife Free Press Nov-10 (4.7)% 1.0% 5.7% and use of social media Banbury Guardian Mar-10 (3.8)% (2.4)% 1.4%  A 10% net change in circulation sales, sustained Averages (9.1)% (0.6)% 8.4% for 6 months post re-launch Note: The pre- and post- sales performance is based on a period that changes from title to title. could yield up to £5m For most, its about 8 weeks; Based on internal sales data25 April 2012 Towards 2020 33 www.johnstonpress.co.uk

Execution Plan Step Two: Re-Launch WHY RELAUNCH? IN LAST 10 YEARS, SOME PAPERS HAVE INCREASED TOTAL INCREASE AGGREGATE REACH BY MOVING AGGRESSIVELY INTO DIGITAL (EVEN IF AUDIENCE MONETISATION HAS BEEN CHALLENGING). MANY OTHERS NOW HAVE THE POTENTIAL TO DO SO.  REDUCE DISPARITY SAMPLE OF DAILY TITLES AGGREGATED AUDIENCE GROWTH/DECLINE OF AUDIENCE REACH Title Newspaper 2001 Newspaper and online 2011 % Difference  Wide disparity in the The Scotsman 212,277 553,492 160.7% Group’s total audience reach (print and online) The Yorkshire Post 217,392 316,665 45.7% over last 10 years The Halifax Courier 69,807 62,932 (9.8)% Northants Ev.Telegraph 94,913 76,208 (19.7)%  Best practice/ benchmarking to reduce SAMPLE OF WEEKLY TITLES AGGREGATED AUDIENCE GROWTH/DECLINE disparity across portfolio Title Newspaper 2001 Newspaper % Difference and online 2011 Lynn News 69,926 77,407 10.7% Bury Free Press 77,664 81,562 5.0% Print audience represents average issue readership The Burnley Express 53,167 52,807 (0.7)% Online audience represents non-duplicated print and local online audience. N.B. Local online audience Stamford Mercury 55,620 50,340 (9.5)% typically represents c.50% of website trafficTotal Audience Study 2010; JICREG Dec 2011 and Oct 2001 Milton Keynes Citizen 164,012 117,950 (28.1)%25 April 2012 Towards 2020 34 www.johnstonpress.co.uk

Execution Plan Step Two: Re-Launch WHY RELAUNCH? Extend best practice consistently across CROSS PROMOTE the portfolio through the re-launch of all titles. RE-LAUNCH WILL FACILITATE INCREASED CROSS PROMOTION FROM PRINT TO ONLINE THROUGH EXTENSION OF BEST PRACTICE Cross promotion plans include:  Use of social media including Facebook and Twitter  Own blogs and forums  Driving traffic to increased online photo content - for sale (e.g. local football matches)  Driving traffic to local offers (e.g. DealMonster)25 April 2012 Towards 2020 35 www.johnstonpress.co.uk

Execution Plan Step Two: Re-Launch WHY RELAUNCH? DRIVE ONLINE TRAFFIC Web traffic: print circulation for daily titles SIGNIFICANT OPPORTUNITY TO INCREASE WEEKLY WEB AUDIENCE THROUGH CROSS- Average: 58% PROMOTION OF DIGITAL CONTENT AND SERVICES 0% 20% 40% 60% 80% 100% AND BY INCREASING USER- Daily web unique users as a percentage of print circulation GENERATED CONTENT ON Source: Daily web users represent Q3 2011 average; Print circulation represents January-June 2011 web statistics; ABC THE PLATFORM Web traffic: print circulation for weekly titles RELAUNCH INITIATIVE WILL ALSO DRIVE CHANGES IN WEEKLY EDITORIAL PROCESS Averag e: 9% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% RESULTING IN INCREASED Daily web un ique users as a p ercentage o f p rint circulation VOLUME AND FREQUENCY Note: Daily web users represents average daily web audience January-December 2011; Print circulation represents average weekly sales weeks 27-49 Source: 2011 Management; webtrends OF DIGITAL PUBLISHING25 April 2012 Towards 2020 36 www.johnstonpress.co.uk

Execution Plan Step Two: Re-LaunchWHAT WILL RELAUNCH INCLUDE?  New designs for all titles NEWSPAPER REDSIGN  Working with a leading international newspaper design agency: fresh, clean, strong web x-promotion  5 daily titles due to relaunch as weekly publications on May 28th 2012 FORMAT CHANGES  Introduction of ‘digital first’ workflow NEW EDITORIAL WORKFLOW  Editorial staff increasingly engaged with digital audience  More central control over page design and production  Resegmented portfolio based on socio-economic profile BEST PRACTICE CONTENT  Tailored content according to segment  Content guidelines based on best performing titles  Align relaunches with Sales Effectiveness implementation ENHANCED ADVERTISER  Improved national advertising capacity PROPOSITION  New packaging of digital inventory with print display25 April 2012 Towards 2020 37 www.johnstonpress.co.uk

Execution Plan Step Two: Re-Launch RELAUNCH – SIZE OF THE PRIZE MARGIN OPPORTUNITY c.£6-8M PRICING: 165 titles in Relaunch * circulation * price increase ranging from 5p-25p VOLUME: 165 titles * average % circulation increase COST SAVING: lower production costs and headcount in weekly formats ADVERTISING SALES: new accounts and increase in national sales ONE-OFF COSTS c.£2M DESIGN: £250k PROMOTION: investment relative to margin opportunity 3825 April 2012 Towards 2020 www.johnstonpress.co.uk

Execution Plan Step Two: Re-Launch RELAUNCH – KPI’s ADVERTISING NEWSPAPER SALES AUDIENCE WORKFLOW EDITORIAL SALES  Circulation (volume,  Total sales  Aggregate audience  % of print content  UGC as a percentage £ vs. budget) (£ v budget) (print readers + uploaded to digital of total content  Print subscriptions  New accounts unique users)  % of editorial staff  Application of (% of total sales) (% of total)  Digital traffic - engaged in direct content toolkit  Bundle  Increased account number of unique digital audience users interaction subscriptions* value (% total) (% of total sales)  Mobile traffic -  % of content that is  Cross-platform sales number of unique multimedia (photos, *where sold /digital sales (%, £) users audio, video)  National sales  % audience  Adoption of fixed (£ vs. budget) transacting beyond page templates  Average online cover price CPM (£)  ARPU (Average  Use of standardised revenue per user) ad shapes (%)  Customer churn (%)25 April 2012 Towards 2020 39 www.johnstonpress.co.uk

Execution Plan Step 3: Accelerate Digital StrategiesACCELERATEDIGITALSTRATEGIESMIDLANDS THURSDAY 16 FEBRUARY 2012 13:58Stacy Thomas looks through the Selby Times classifieds in her lunch hour25 April 2012 Towards 2020 40 www.johnstonpress.co.uk

Execution Plan Step 3: Accelerate Digital Strategies FOCUS ON LOCAL DIGITAL STRATEGY  135,000 local articles published Local Local per week across JP portfolio ANCHORED AROUND Classifieds audience/ display  Websites functioning as Local UNIQUE LOCAL community portals – platform (£££) Content, (£££) CONTENT for community information News & Sport sharing, access to local INCREASINGLY information and data INCORPORATING  Depth of local content and SOCIAL MEDIA AND trusted local media brands Local creates protection for local LOCAL INFORMATION digital advertising: Offers & UTILTIIES − Local classifieds Services (£££) − Local display advertising − Local offers and commerce25 April 2012 Towards 2020 41 www.johnstonpress.co.uk

Execution Plan Step 3: Accelerate Digital Strategies FOCUS ON MOBILE OVER 20% OF ALL OUR WEB SITE VISITS ARE FROM MOBILE DEVICES MOBILE VISITS - % OF ALL VISITS  Mobile users are typically younger and heavy social media users  Rollout of mobile sites as part of Relaunch programme will significantly increase mobile traffic  Mobile searches are locally focused and transaction- oriented – offering excellent location-based advertising opportunities25 April 2012 Towards 2020 42 www.johnstonpress.co.uk

Execution Plan Step 3: Accelerate Digital Strategies FOCUS ON SOCIAL SOCIAL MEDIA INTEGRATION – EXAMPLE OF PAGES PER VISIT BEFORE AND AFTER IMPLEMENTATION  Offering the facility for user content and social media on local newspaper websites enhances the value proposition for the local consumer  The social platform on our newspaper websites will be integrated with Facebook and Twitter: – Increase volume of page impressions by aggregating relevant content from major social networks  Implement Pluck social media to establish active online communities25 April 2012 Towards 2020 43 www.johnstonpress.co.uk

Execution Plan Step 3: Accelerate Digital Strategies MAXIMISE ONLINE YIELD INCREASED ‘DWELL TIME’ ON INCREASED CONTENT = INCREASED REVENUE PV * STR * CPM = £ONLINE YIELD PV: ‘PAGE VIEWS’, VIA WEB, MOBILE, APP – MORE CONTENT, MORE SOCIAL ENGAGEMENT, MORE X-PROMOTION STR: ‘SELL THROUGH RATE’ (PERCENTAGE OF PAGE INVENTORY SOLD FOR ADVERTISING) – BETTER PACKAGING WITH PRINT CPM : ‘COST PER MILLE’ - CHARGE PER THOUSAND PAGE VIEWS – BETTER ‘BRAND’ SELL, AND BETTER AUDIENCE AND BEHAVIOURAL TARGETING (LOWER REMNANT %)25 April 2012 Towards 2020 44 www.johnstonpress.co.uk

Execution Plan Step 3: Accelerate Digital Strategies MAXIMISE ONLINE YIELD ONLINE DISPLAY  National display opportunities INITIATIVES – Substantially increase revenue ACCELERATED – Partnering opportunities for premium CPM – over double rate  Display advertising targeting products – Partnering with Grapeshot - develop content targeting – Contextual advertising increases click through rates by 75% and has 20% higher CPMs – Develop comprehensive CRM database to record website usage patterns for profiling  Roll out mobile sites – Partnering with YOC - the leading mobile technology and media provider in Europe - typically achieves CPMs of £8-1225 April 2012 Towards 2020 45 www.johnstonpress.co.uk

Execution Plan Step 3: Accelerate Digital StrategiesStrategic Review BUILD OUT ADVERTISING VERTICALS  Roll-out of DealMonster – Online voucher model - leverage local audience, media, sales forces and advertising relationships – share of e-commerce  Increased monetisation of jobstoday.co.uk – launching online recruitment telesales unit /online only field sales team  Further partnering initiatives to extend online classified business – Partnerships in key classified verticals established in recent years – advanced negotiations on motors partnership25 April 2012 Towards 2020 46 www.johnstonpress.co.uk

Execution Plan Step 3: Accelerate Digital Strategies Reaching the tipping point  Jobs may well reach 50% revenues from digital by end of 201225 April 2012 Towards 2020 47 www.johnstonpress.co.uk

Execution Plan Step 3: Accelerate Digital Strategies CREATE CONTENT VERTICALS BUSINESS MODEL WHICH VERTICAL MARKETS? HIGH CREATE MULTIPLE REVENUE STREAMS THROUGH ▪ Annual UK consumer spend in excess of £500m MARGIN PARTNERSHIPS ▪ Significant secondary spend (e.g., sports betting) DRIVE BRAND AWARENESS ▪ High volume of differentiated AND AUDIENCE THROUGH Johnston Press local content assets OWN MEDIA ▪ High level of associated social media activity LOW AGGREGATE EXISTING CONTENT ASSETS TO CREATE ▪ No existing dominant provider COST LEADING VERTICAL SITE25 April 2012 Towards 2020 48 www.johnstonpress.co.uk

Execution Plan Step 3: Accelerate Digital Strategies Currently running several successful small business awards schemesEXAMPLE VERTICAL: PARTICIPANTS ISLE OF MAN 1200 WIGAN 1400SME PORTAL & AWARDS ANNUAL REPORT £100K £50K SMALL BUSINESS POTENTIAL TO CREATE ESTIMATE THE ANNUAL AWARDS SCHEME AWARDS SCHEMES INCREMENTAL PROFIT IN 50 OTHER REGIONS POTENTIAL OF £5M HIGH-MARGIN ADVERTISING VALUE ADDED SERVICES NETWORK OF LOCAL AWARDS   Long term relationships Packaging online and print 50 CAN BE DEVELOPED INTO A  Display advertising NATIONAL AWARDS SCHEME Resell online search   ‘Through-the-line’ ATTRACTING MAJOR SPONSORSHIP marketing WHY  Established commercial relationships with small businesses BUSINESS SERVICES US?  Marketing and events capability (VIA PARTNERSHIPS)  High volume of small business content and coverage  Legal services  Legitimacy:‘ orchestrator’ of local  Accounting business community  Software25 April 2012 Towards 2020 49 www.johnstonpress.co.uk

Execution Plan Step 3: Accelerate Digital StrategiesHIGHPOTENTIAL WHY US?VERTICALS  All our newspapers produce masses of content across each of these areas, every day and week of the year  Already do competitions in print for all these areas  Already do wedding, pet, outdoor pursuit, parent-to-be exhibitions  Established commercial relationships IN DEVELOPMENT… NEXT IN LINE… with small businesses  Entertainment Guides  Wedding Events  Marketing and events capability and Listings  Pet Shows  High volume of small business  Local Football content and coverage  Outdoor Pursuit  Archive photos Expos  Legitimacy: ‘orchestrator’ of local business community  Mother & Baby shows & competitions25 April 2012 Towards 2020 50 www.johnstonpress.co.uk

Execution Plan Step 3: Accelerate Digital StrategiesIMPACT OF DIGITALACCELERATION ONLINE DIGITAL 25 200 AUDIENCE REVENUES (millions) 20 150 15 100 10 50 5 2010 2011 2012 2020 2008 2011 2012 2015 2020 DIGITAL 10 ARPU (£) 5 1 2008 2011 2012 2015 202025 April 2012 Towards 2020 51 www.johnstonpress.co.uk

ExecutionReviewStrategic Plan Step 3: Accelerate digital strategies WORLD CLASS DIGITAL MANAGEMENT TEAM Four key appointments in last 18 months: DIGITAL & BUSINESS MANAGINGDIRECTOR, DIRECTOR, DIGITAL MANAGING DIRECTOR, DEVELOPMENT DIRECTOR DIGITAL CLASSIFIEDS PLATFORMS DEALMONSTER  Joined September 2010 -  Joined March 2011 -  Joined June 2011 - digital  Joined August 2011 previously acted as digital classified business - content across entire General Manager of The particular focus on online portfolio - future  Held Managing Director Scotsman Publications, recruitment development of mobile roles at Anglia Managing Director of JP and other platforms Newspapers, Yorkshire Ventures and Group  Over 15 years’ experience Regional Newspapers, Business Development in online media space -  Previously at BBC - Social KCOM Group, Kingston Manager formerly CEO of Media Editor BBC News, Communications. Former fish4.co.uk and Managing BBC Sports - Interactive Head of Internet Strategy  MBA from INSEAD Director of Monster.co.uk Sports News Editor, at BT Worldwide and IT Development Editor, Manager and Head of IT Sports Editor Business Innovation at IPC Magazines25 April 2012 Towards 2020 52 www.johnstonpress.co.uk

Execution Plan Step 4 EXPLOIT TECHNOLOGYSCOTLAND AND NORTH EAST MONDAY 13 FEBRUARY 2012 06:30Andrew Stewart starts his commute reading the latest business news in The Yorkshire Post25 April 2012 Towards 2020 53 www.johnstonpress.co.uk

Execution Plan Step 4: Exploit TechnologySYSTEMS AND TECHNOLOGY GREAT POSITION TO REAP THE BENEFITINVESTMENT HASTRANSFORMED PRODUCTIVITY INDUSTRY LEADING INVESTMENT CENTRALISATION WITHOUT WHILST ALWAYS IN PROCESS TECHNOLOGIES UNDERMINING OUR LOCAL MAINTAINING LOCAL  Single customer relationship CORE CAPABILITIES DISTINCTIVENESS management system – know every touch-point  Single call centre  Journalists on the of the customer  Single editorial hub ground in every local  Single templating system – market allowing consistent  Local sales teams, advertising placement complemented by  Single content management national sales skills system – providing ease of content reuse, aggregation and editorial hubbing25 April 2012 Towards 2020 54 www.johnstonpress.co.uk

Execution Plan Step 4: Exploit TechnologySYSTEMS AND TECHNOLOGY AND THE JOURNEY IS CONTINUING…INVESTMENT HASTRANSFORMED PRODUCTIVITY Announcing today new partnerships  In addition to our established relationship with Microsoft25 April 2012 Towards 2020 55 www.johnstonpress.co.uk

Towards 2020SUMMARYNORTH FRIDAY 9 MARCH 2012 14:00Daniel Mayer catches up on the latest sport news whilst waiting for a train25 April 2012 Towards 2020 56 www.johnstonpress.co.uk

Summary COST LEADERSHIP AND PRINT REVENUE NEW STRATEGY Maintain industry leading cost leadership ACCELERATE EXISTING position Remain profitable DIGITAL STRATEGIES Ensure the business Increased cross remains agile and promotion and volume flexible to take will provide an advantage of future enhanced digital Vision opportunities RESULTS IN offering, RESULTS IN increasing page views Johnston Press provides RE-LAUNCH ALL TITLES More valuable, relevant Content and social Transformed trusted local media print proposition media revenue base platforms serving the Synergistic web offering to also increase the Digital revenues needs of consumers and Increase newspaper with increased content value of the online planned to increase advertisers, delivered revenues via cover proposition, increasing from £19m in 2011 online and in print, price increases Mobile platforms e.g. consumption iPad, Smart phone apps (5% share of the Group’s improving the quality of Re-engage with revenue base) to £52m local community, Transform CPM audiences Other offerings e.g. by 2015 lifestyles and vouchers, discounts Maximise yield commerce.  Improve understanding Sustained cost of existing audiences leadership position  Appeal to new CREATE NEW VERTICALS audiences Re-engage with advertisers Generates new revenue streams for low Increase cross- incremental cost promotion to digital Diversifies out of core Increase overall value proposition local news & information offering Drive subscriptions25 April 2012 Towards 2020 57 www.johnstonpress.co.uk

SummaryFINANCIAL PATH TO 2015 AUDIENCE Users (m) 20 PRINT 355 £’m 350 (PRINT & ONLINE) REVENUE 300 300 INCREASING 15 16 STABLISING 10 10 200 5 100 2011 2015 2011 2015 DIGITAL ARPU £ 5 5.00 DIGITAL £’M 80 RISING REVENUE 52 4 MULTIPLYING 60 3 2.30 40 2 18 20 1 2011 2015 2011 201525 April 2012 Towards 2020 58 www.johnstonpress.co.uk

CONCLUSION 1 2 3 4 INTEGRATED SUCCESSFULLY NEW GROWTH INDUSTRY PRINT + DIGITAL COMMERCIALISING FROM NATIONAL LEADING COST MEDIA: LOCAL, DIGITAL AUDIENCE VERTICAL BASE AND SOCIAL, MOBILE (ARPU) BUSINESSES GROWING MARKET VALUE DIGITAL PRINT £25.00 £10.00 (£200m (£200m/ revenue/ 20m users) 8m users) 202025 April 2012 Towards 2020 59 www.johnstonpress.co.uk

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Johnston Press' trasformation strategy

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