BtoB Media Business - December 2006 - (Page 26)

Warning : session_start : The session id contains invalid characters, valid characters are only a-z, A-Z and 0-9 in /mnt/data/www.nxtbook.com/fx/config_1.3/global.php on line 9 Warning : session_start : Cannot send session cache limiter - headers already sent output started at /mnt/data/www.nxtbook.com/fx/config_1.3/global.php:9 in /mnt/data/www.nxtbook.com/fx/config_1.3/global.php on line 9 Warning : Cannot modify header information - headers already sent by output started at /mnt/data/www.nxtbook.com/fx/config_1.3/global.php:9 in /mnt/data/www.nxtbook.com/fx/config_1.3/global.php on line 10 MB _ 12-11-06 A 26 B2DB 12/1/2006 10:47 AM Page 1 Online Adjusting to online revenue NLINE With print advertising slipping, b-to-b media companies search for successful business models BY MARIE GRIFFIN O O nline revenues may be growing at a faster rate than print and event dollars, but they represented only 8% of revenue for the average b-to-b media company in 2005, according to the “ABM Financial Trend Report 2001-2005,” which was produced by Jordan, Edmiston Group and released last month at American Business Media’s Top Management Meeting in Chicago. Print was responsible for 59% of revenue in 2005. However, the critical print advertising business is becoming less lucrative, with scant hope the trend will be reversed. The average publication had print revenue of $5.4 million in 2005, less than threequarters of the 2001 average of $7.3 million. The number of ads in the average publication was 4% lower in 2005 than in 2001, but net ad revenue per page declined 22% over that period. “No online strategy probably means no future,” said Richard Mead, managing director of Jordan, Edmiston, who presented the report at the ABM meeting. With such sobering thoughts in mind, media executives flocked to a panel discussion at the ABM meeting titled “The Digital Statement: What’s the New Business Model To Increase Your Revenues?” Heather Mikisch, publisher of Thomas Publishing Co.’s Managing Automation, sees the answer in magazines getting “deeper into the work flow” of their customers and audiences Noting that 85% of Managing Automation’s online revenue stems from lead generation,” Mikisch said she is developing a wizard to take potential buyers through a product comparison process that would elevate the value of that lead to about $1,000, as compared with the $90 per lead the magazine is currently getting. For audience members, meanwhile, getting deeper into their work flow could mean side-by-side comparison tools and peer-topeer product reviews, a feature Mikisch plans to add in 2007. “Users are looking for greater engagement,” said Erin Clift, vertical head-business and industrial markets at Google. “The Web provides a tremendous amount of information on how a buyer goes through the decision-making process that wasn’t available in the past. That should be the basis of your conversations with advertisers.” Lead generation is also the foundation for online advertising at Summit Publishing, said David Newcorn, VP-new media. Rather than using Google’s AdSense or another provider for cost-per-click ads, Summit sells custom CPC ads created from simple logos or product pictures plus “hot” headlines and short descriptions designed to encourage click-through. Registration may or may not be required, depending on whether the advertiser desires the smaller number of people who choose to opt in or the greater, total number of viewers. Newcorn added that he is working to diversify Summit’s online revenue streams beyond the widely popular e-mail newsletter advertising and webcast sponsorships. “Online custom publishing is becoming a hot area for us,” he said. Limited resources pose one of the biggest obstacles for print-based media companies as they try to expand their online business, panelists said. Alec Dann, who recently joined Hanley Wood Business Media as general manager of magazines online, said one of his first tasks is to get the magazine editors to contribute to online editions without diminishing the quality of the content. “One approach we’re taking is to plan online coverage that complements the anchor issues on our editorial calendar,” which allows editors to create additional stories without much extra reporting, he said. On the subject of resources, the panel agreed that smaller publishers probably need to rely on outside expertise in areas where they lack in-house staffing. “Our new thing is to go to many vendors—four, five or six—so we can react quickly,” Newcorn said. Advantage to sell or shut down FindGuru A dvantage Business Media, which acquired the parametric search product formerly known as ReedLink with its July 2006 purchase of Reed Business Information’s Rockaway, N.J.-based New Products Division, has decided to shut it down or sell it before the end of the year. ReedLink was an ambitious vertical search project based on a vast product database—including 15,000 product categories and 50,000 different manufacturers—designed so that a potential buyer could research and compare individual items on a like-to-like basis according to detailed specifications. Manufacturing was the first industry sector for ReedLink, launched in early 2005, followed at the end of last year by life sciences and construction. In September, Advantage relaunched ReedLink with the name FindGuru and unveiled new features, such as blogs, and additional functionality, including a new structured taxonomy that enables users to browse through categories and drill down to find the specific product or content they want. At the same time, the new owner was evaluating FindGuru in relation to its strategies for the new freestanding b-to-b media company. “We looked at it carefully, and it doesn’t fit our vision,” said Advantage CEO Rich Reiff. “Search remains a critical component of our strategy, though, and we will continue to invest in it.” Although the FindGuru site will remain live for a period of time, Advantage will cease all new investment in it while it explores its options, Reiff said. “We are preparing an offering to sell it, complete with a summary business plan that details the investment required,” he said. Reiff said that If a buyer is not found, FindGuru will be shut down. —Marie Griffin 26 | Media Business | December 2006 | mediabusinessonline.com Warning : Unknown : The session id contains invalid characters, valid characters are only a-z, A-Z and 0-9 in Unknown on line 0 Warning : Unknown : Failed to write session data files . Please verify that the current setting of session.save_path is correct /var/lib/php/session in Unknown on line 0 http://mediabusinessonline.com

Table of Contents for the Digital Edition of BtoB Media Business - December 2006

Table of Contents
Upfront
Special Report
Resource Guide
Endnote
Sales & Marketing
M&A
Events
Online
Circulation
Production
People
Benchmarks

BtoB Media Business - December 2006