BtoB Media Business - June 2009 - (Page 7)

COVER STORY Looking beyondthe downturn Even while cutting back in some areas, publishers are investing for the future BY SEAN CALLAHAN Every day it seems another b-to-b media company shutters a magazine, fires staffers or cuts salaries. Behind the scenes, however, these businesses are quietly investing in areas they believe will grow when the recession recedes. Where are they investing? Hint: It’s not in print magazines. “The overarching theme is that they need to follow the money,” said Anthea Stratigos, CEO of analyst firm Outsell, who added that b-to-b media companies are betting that enhanced marketing services and paid-content offerings will produce profits in the future. Examples of b-to-b media companies making deep cuts are everywhere: ■ Hanley Wood CEO Frank Anton said his company, which focuses on the hardhit construction industry, has cut about 20% of its staff since the recession began. ■ IDG Communications, whose titles include Computerworld, confirmed in May that it cut 8% of its staff. ■ Penton Media has cut its work schedule to four days a week during the summer months, with a corresponding reduction in pay. ■ BNP Media, blaming the harsh demands of its lenders, reportedly cut wages by 25%. ■ Even TechTarget, which is an online-only business that focuses on lead generation—two characteristics that would seem to insulate the company from the current recession—cut its staff by more than 10% late last year. While individual companies and their employees are suffering, the industry as a whole appears to be doing no better—especially in print. The steep decline in print ad pages is only accelerating, according to the most recent data from American Business Media’s Business Information Network. Print ad pages dropped 33.06% in March compared with the year-earlier period, according to BIN figures. In February ad pages plunged 31.54%, and in January they fell 26.95%. So it’s no surprise that the lion’s share of b-to-b media cuts have come in print. But the industry has not gone into its collective shell—at least not completely, as companies attempt to remake themselves for the future. Over the past several months Media Business spoke with a cross section of bto-b media executives about their investment plans as the media world steadily moves toward a more digital future. Those executives appear to be placing their bets in five broad categories: paid content, marketing services, digital technology, lead generation and events. Two paths to profitability The Booz & Co. study that ABM commissioned last year describes two basic paths for b-to-b media companies to follow toward future profitability. One is focused on advertiser revenue, the other on end-user revenue or paid content. For b-to-b media companies that have given away content for free to attract audiences that are then sold to advertisers, the latter is acknowledged as the more difficult path to follow. “It’s not an easy crossover,” said 1105 Media CEO Neal Vitale. But some b-to-b media companies are focused on paid content as a primary rev- enue source. At Access Intelligence, CEO Don Pazour has committed to boosting the company’s reliance on paid content. Currently, Pazour said, Access generates 50% of its revenue from paid content, led by its SRI Consulting unit, which provides must-have data to Dow Chemical Co., DuPont and other major chemical companies. The other large contributors to Access’ paid-content revenue are daily newsletters serving the defense, energy and cable industries. As part of its emphasis on paid-content revenue. Access has invested in software that ensures its copyrighted content is not being abused. For instance, it uses software to ensure that its e-newsletters are not being illegally forwarded and that its seat licenses are not being abused. Pazour is also encouraging his editorial staff to think about their readers and try to divine what kind of content they would pay for—then to create that content. “We have asked our editors to spend more time listening to their markets and less time producing and broadcasting to their markets to determine whether there are opportunities for new products,” he said. Penton Media, which was founded more than a century ago and has long been a leading practitioner of the controlledcirculation model, is looking to generate more revenue from paid content. Late last year it named Sharon Rowlands, who was previously CEO of Thomson Financial, a company that had moved aggressively into subscription revenue, as its new CEO. Rowlands is hoping to establish more of a paid-content model at Penton. Speaking during a roundtable discussion at last month’s ABM Annual Conference in Amelia Island, Fla., she said she has set a goal of Penton generating 40% to 50% of its revenue from digital content—which would include some subscription data products—in the next five years. Currently, the company generates 15% of its revenue from digital content, she said. Hanley Wood is also trying to generate more money from its readers. Hanley Wood Market Intelligence offers builders detailed market data to help them determine the right houses to build in particular areas to maximize their investments. Anton aims to ramp up the offerings and form a consulting business that would serve Hanley Wood’s readership base of home builders. mediabusinessonline.com | June 2009 | Media Business | 7 http://www.mediabusinessonline.com

Table of Contents for the Digital Edition of BtoB Media Business - June 2009

BtoB Media Business - June 2009
Contens
Publishers Reassess Google AdSense Programs
Amid Cutbacks, Media Firms Are Still Investing
Open-source CMS Advantages Outweigh Problems
Sales & Marketing
M&A
Online
Production
Events
Circulation
People
Benchmarks
The End of B-to-B Media As We Know It?

BtoB Media Business - June 2009