"The acquisition is an attempt to keep up with Facebook and Google"

Advertising Week: What was your first thought when you heard that Tamedia wanted to take over Goldbach?

Manuel Puppis: It comes as it had to come. The merger creates a second strong advertising marketer in Switzerland.

When Admeira was founded in 2016, Ringier was the only private medium besides the fee-financed SRG. Did you expect back then that Tamedia would want to take over Goldbach, as a non-member of Admeira?

There was no way of knowing, of course, but it stood to reason that the other major Swiss publisher besides Ringier would have to take a similar step. Even then, the politician Jacqueline Badran actually predicted this.

What do you say to the rumors that, in addition to the sales negotiations with Goldbach, Tamedia is also said to have held talks with Admeira about possibly joining the advertising alliance?

I also only know the rumors. One side claims that the talks between Tamedia and Goldbach were held in secret, Tamedia claims otherwise. The fact that Tamedia is talking to the members of Admeira is not surprising in a small market like Switzerland. But in what direction the talks went, I can't judge.

Why do you think the Tamedia media company wants to spend 216 million francs on an advertising marketer?

Of course, the purchase is not just a reaction to Admeira. It's a fact that the advertising business with traditional publishing media is declining, especially in the print sector. We've been observing the trend for more than 20 years now. In the case of sales newspapers, net advertising revenues have plummeted dramatically: in 1995, sales newspapers generated revenues of almost CHF 1.7 billion. In recent years, the figure has been less than 600 million Swiss francs. Online business has not been able to compensate for this development. Rainer Stadler of the NZZ has researched that in 2014 the advertising turnover of all journalistic online platforms in Switzerland was barely more than 80 million francs. Not much is happening in radio in terms of advertising either. And in the television business, it is assumed throughout Europe that there will be a decline in net advertising revenues in the medium term because linear television is losing importance. This situation applies to Tamedia just as it does to Ringier and other media companies.

The acquisition of Goldbach is ultimately an attempt to keep up with US corporations like Facebook and Google with a digital and integrated offering. The marketing business is being merged, so that print, radio, TV, online journalism, and of course all kinds of other digital platforms are in the portfolio, and offers can be delivered across channels and targeting can be used, target-group-specific advertising can be placed, and new forms of advertising can be tried out. In the future, we will have two players in Switzerland who can do this: Admeira and Tamedia with Goldbach.

The marketing business is merged and thus print, radio, TV, online journalism, and of course all kinds of other digital platforms are included in the portfolio, and offers can be delivered across channels and targeting can be used, target group-specific advertising can be placed, and new forms of advertising can be tried out.

Goldbach CEO Michi Frank justified the decision to sell by saying that the Goldbach Group was doing quite well, but that advertising pressure was increasing with Admeira and digitization was shaking up the advertising market. What do you think is Goldbach's motivation for allowing itself to be bought?

In the future, Goldbach will be able to offer customers cross-platform offerings: from print and online journalism to radio and TV. The portfolio will be well positioned for integrated campaigns and for new forms of advertising.

After all, Tamedia said goodbye to the radio and TV business in 2011 with the sale of Tele Züri, Radio 24, TeleBärn and Capital FM, while Goldbach markets advertising for these areas. Would you agree that the purchase is a further step in the direction of moving away from producing your own content and living in the future from marketing content that has already been produced, in the same way that Facebook and Google do?

Tamedia and Ringier are the largest publishing houses in the country and have both been diversifying for a long time. In other words, they not only have publishing business units, but are also strongly expanding their digital transaction business - whether in e-commerce or classified advertising. That's what sets them apart from all the other media companies in Switzerland. We can see what this means in publishing: savings are being made. Ringier has closed L'Hebdo in French-speaking Switzerland. Tamedia is trying to get a grip on costs by centralizing its editorial offices, making greater use of synergies, covering only regional reporting separately and producing national topics once for all.

As a listed company, Tamedia does not accept making losses with newspapers. Goldbach gives Tamedia access to the German and French advertising windows in marketing. Mr. Tonini was quoted in the press release as saying that investments in Swiss program content were being examined with the new partners ProSiebenSat.1 and RTL. This could suggest that a publishing commitment in the TV sector is not seen as impossible - not as a Swiss broadcaster, but as a window on Sat.1, ProSieben or RTL.

Christoph Tonini, CEO of Tamedia, was quoted elsewhere in the media release. He said that the Goldbach purchase would benefit not least the journalistic media. At the same time, as you mentioned, Tamedia is cutting costs in journalism. Do you think one can believe that something will be invested in the journalistic media from new revenues?

I would doubt that the deal would lead to more investment in journalism - unless journalism actually sold more advertising. In profit center logic, that would mean that the money would be available for journalism. But most of the money will probably be made with digital transaction platforms in the future.

Background: The Zurich media company Tamedia has announced its intention to acquire the Goldbach Group. The merger is expected to create one of the widest-reach advertising marketers in Switzerland. Tamedia has pre-announced a public purchase offer for the Goldbach Group at CHF 35.50 per share and intends to acquire all of the advertising marketer's more than 6 million issued shares. This brings the purchase price, which is to be paid in cash, to 216 million Swiss francs. The Goldbach Group, which employs around 340 people in Switzerland, Germany and Austria, is to continue to operate from its current location in Küsnacht ZH. CEO of Goldbach will remain Michi Frank, who will become a member of Tamedia's management board. According to Tamedia CEO Christoph Tonini, this will allow an exchange in both directions and both sides can benefit - Tamedia, for example, from Goldbach's sales culture. There will be no staff reductions. There are still a few steps to be taken before the takeover is finalized. For example, the Swiss Federal Competition Commission (Comco) still has to review the takeover. Tonini is confident, however, that this will be completed by the end of February/beginning of March. The actual takeover is expected to take place in April. If it goes through, Goldbach will be delisted from the Swiss stock exchange.users visit the platforms to read news or watch videos. The question is whether we can still keep media alive that are simply not viable in the market economy.

The interlocutor Prof. Dr. Manuel Puppis is a member of the Federal Media Commission (FMEK), but in the interview he gives his personal opinion as a scientist. Puppis teaches and conducts research at the Department of Communication Studies and Media Research (DCM) at the University of Fribourg.

The interview was conducted by Ann-Kathrin Kübler. Read the full interview in Werbewoche 2/2018 (published Jan. 26, 2018).

Photos: Stephane Schmutz / STEMUTZ