As communism fell in Lithuania 19 years ago, existing dailies started to publish what they wanted. And what they wanted was money. The 2 main titles promptly became filled with advertorial paid for by politicians and industrialists.
The Lithuanian public quickly became disheartened with the printed press and turned to the internet instead. That’s why the audience of Lithuanian #1 website for news is only 8 times smaller than its UK counterpart, even though the country is 20 times as small as the UK (and twice as poor in terms of GDP per capita).
Seeing this enthusiasm for online news, MG Baltic, a Vilnius-based holding that trades in everything from consumer goods to news, decided to launch a website. The avowed goal was to complement their mass media portfolio.
On August 7, 2006, alfa.lt was born. 2 years later, it’s the national #3 website for news and #6 website overall. It’s also on-track towards breaking even with profitability planned for 2010.
To know more about this success story, I went to alfa’s office and interviewed the project manager and editor-in-chief, Virgis Valentinavicius.
Business plans aren’t dead
Far from an idealistic website that would make the world better, alfa.lt is the brainchild of executives eager to milk online advertisers. This made Virgis’ discourse very different from the traditional ‘do first, monetize later’ motto heard in start-ups. For him, every single litas invested must be turned into clicks.
The brand’s philosophy is to reach to young, hard-working and high-achieving Lithuanians looking for serious information. Now, this young professional also needs entertainment, which alfa.lt provides. This mix of news and entertainment should make alfa.lt an all-encompassing provider of quality content. Dumbing-down isn’t in alfa.lt’s interest, Virgis said, as intelligent readers are more profitable in the long run.
(As I don’t read Lithuanian, I haven’t been able to make my opinion on alfa’s quality. A Lithuanian friend of mine was very critical of its content, calling it ‘similar to yellow press.’ Do you read alfa? What’s your opinion on its quality?)
Online marketing is the key
Success came from one main source: online marketing, Virgis explained. Alfa was the first in Lithuania to invest massively in targeted online ads. Designed to look like headlines, they were first put on Google Adwords, on news-related keywords, but this proved too expensive.
Instead, alfa.lt advertised on social networks. One.lt, the country’s #1 social network, provided alfa.lt with the demographic it needed at a very cheap price. Today, Virgis is thinking about stopping such online-advertising campaigns. In 2 years, prices have tripled as competitors started to use the same technique.
Online ads were at the foundation of alfa.lt’s success, Virgis said. In 2007, the site’s traffic increased fivefold from 100k unique users a month to 500k.
It’s all about the content
To satisfy this audience it acquired at great costs, alfa.lt has to offer the best possible articles. The bulk of the company’s resources are oriented toward content-creation.
About 20 journalists fill the crowded newsroom in the business district of Vilnius. Like every post-socialist country, Lithuania severely lacks journalists. Market pressures mean that salaries are sky-high and talent is rare.
Adding another twist to an already-critical market situation, 3 news websites opened in 2007, pushing salaries even further. Virgis didn’t want to spend all its money on bringing journalist stars in the newsroom. Instead, he hired people who could react with speed and adapt to change quickly. ‘Journalism needs no education but common sense’, he said.
With very little resources and a challenger position (see graph), alfa.lt doesn’t want to take risks with content. On video for instance, Virgis is very cautious not to waste too much money. ‘Alfa needs to be very specific when doing video’, he said, and online TV is a luxury that doesn’t always bring clicks.
Same answer when it comes to social features. Alfa.lt’s in the news business, not in social networks, he repeated. These are 2 different markets that require different sets of skills. What he suggested was for his parent company to buy a social network so as to benefit from synergies.
As a result of this content-oriented strategy, almost 70% of all content on the site is home-made, compared to 50% at Delfi.lt, alfa’s main rival and market leader. That will give the site a serious competitive edge when Google news comes in Lithuania and start making direct deals with wire services, as happened with AFP and AP stories.