Neil Thackray’s Business Media Blog

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The Tend to Zero Risk

One of the reasons so many media companies are in trouble is the simultaneous crisis in all revenue streams.  It seems to many, that whatever strategy is deployed, the size of the potential revenue pot keeps falling. 

Back in the sixities, almost all business to business titles were paid for.  News about your industry was valuable and that value could be measured with money.  Today nobody charges for news.  In print, yields have been under pressure for some years.  Online display advertising with it’s transparent measurability has given advertisers a legitimate stick with which to beat media owners.   Where there has been success in selling online display the achieved CPM has been falling.  Too much traffic, too little of it useful or enaged, consequent poor click through rates mean that much inventory remains unsold – a growing proportion for many – and what does get sold is at rates that are falling.  Where once the choice advertisers had was limited by the number of titles in a market, today they are confused by so much choice.

We lost our way with recruitment.  Where we used to charge thousands of pounds for a page of advertising, the job board model now offers an ad £100.  In the recession prices here too are falling.

However we solve the current strategic conundrum, it seems pretty clear that unless we can push back the tide of prices tending to zero we don’t have a business.    The truth is, whilst there are things we can do to make a difference the price of a transaction in the new world is unlikely to reach the heady heights of the old world.  There are  four steps that all media companies must take:

1) Set the fixed cost base at a  level which is supportable by the new model.  This means attacking some sacred cows and stripping away layers of management costs.

2) Improve the value of your advertising proposition.  Seth Godin says,

“As long as your site is about something else and the ads are a distraction, you’ll see CPM rates drop. As soon as you (or the advertisers) figure out that creating online communities aligned with the advertising, where attendance is a choice by the consumer, then you’re creating genuine value.” 

In B2B that means making ads relevant and targeted.  Don’t give up on vertical search solutions.  Keep experimenting – there are riches ahead for the media company that gets it right.

3) Audit every activity that leaves the building and assess it for value.  Use that value audit to establish the prices that could be achieved.

4) Give up on the idea that you are going to survive by doing the stuff you used to do.  News products supported by advertising are going to be very small businesses.  Plan and implement a series of new product developments that will help you scale your business.  Buy some expertise to help you do it.

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July 20, 2009 Posted by | Advertising Sales, b2b media, business media strategy, Search | , , , | Leave a comment

The Answer to the B2B Online Content Conundrum Is a Hybrid

B2B Digital content model
B2B Content Model

B2B Content Model

One way of of thinking about the new content model for B2B is to deploy a range of data to generate income in more than one way.  Our traditional strength – the delivery of news, remains a powerful audience grabber.  But as we have discussed, news is a commodity and must be delivered free, funded by an advertising model.  Because this, on its own is insufficient to support a reasonable economic model we must add a jobs board, available free to the user.

The next segment is the production of leads for suppliers.  Suppliers will pay for leads if the information and data about the lead is validated through a registration process.  Product information, product specifications and supplier white papers can all be offered to users from behind a registration wall.  These validated leads are enormously valuable to suppliers and can be sold for prices varying from £25 to £100 each lead.

Paid information is the next content segment.  This might be research data, research white papers, reader panel data any of which can be sold on a subscription or pay / view basis.

At the top of the heirarchy B2B media can offer applications and work flow tools on a licence basis.

Each of these four elements deserve a post in their own right, but if all four are deployed in a co-ordinated fashion then we have the makings of a sustainable and growable digital model.  The key to understading this, is not believing that the answer lies either in the information model or the ad sales model, but rather in a hybrid model which addresses each slice of the b2b content pyramid.

 

 

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March 23, 2009 Posted by | business media strategy | , , , , | 3 Comments

The Right Answer to the Wrong Question is Still the Wrong Answer

If you ask the right questions there is chance you will find the right answers. Is it possible that in business media we are asking the wrong questions?  Many business media companies are asking themselves how they can manage the migration from print to online and how they can maximise the cash generated from the legacy business in the meantime.  The right answer to the wrong question won’t build the new model we are striving for and my contention is that this is the wrong question.

The problem with the question as phrased, is that it leads managers to replicate the offline model in the online world.   Content sourcing and selection is done in the same way as for magazines.  We try to sell display advertising with display advertising arguments and metrics.  In the legacy business we manage our magazines as cash cows, driving out costs but plugging away with the same failing model.

There is an old cliche that if you are hitting your head against a wall and are discovering that your head is hurting, the best answer is to stop hitting your head against the wall.

Let’s use that analogy as as starting point to rephrase the question.  Let’s begin by thinking about our aims.  We want to build a new model for offline publising that will deliver sustained growh over the long term.  In addtion we want to make new profits by using the distribution medium of the Internet.  If these are our aims then the question we have to answer is different.  What does a successful business magazine look like in a world where news and comment is consumed via a screen?  What service can we provide online that will lock in targetted groups of decision makers and how can we help suppliers convey their marketing messages to those prospects in a way which leads our customers to increased sales?

Now that sounds like a more interesting way of thinking about the problem.  Let’s think about the magzine question first.  What do we know?  We know that readership has fallen over time.  We know that much of the news we publish in our magazines is out of date before it reaches the reader.  We know that classified and recruitment advertising is being eroded by job boards and other online solutions.  We know that declining readership means declining reponse and lower  advertising yields.   We know that as we cut costs our competence to write credibly about our markets is being undermined.

What do we know about online publishing for b2b communities?  We know that building traffic is possible.  We have discovered that our target readers are butterflys using search engines seek out nuggets of information.  We know that sophisticated Internet users are as likely to read our content in RSS feed as they are to read it in our livery.  We know that when readers come to our sites they will often consume only a few pages. Two or three is not unusual before they vanish off to some other information source.  We know that b2b advertisers don’t understand how to use our audience to make money and the devices we give them often offer disappointing returns with low CTR.

Ok.  So that is not comprehensive and isn’t even universally 100% true, but wouldn’t you agree that as a broad description of our world it rings some bells?  So lets try and tackle the issues at the heart of this argument.  In magazine publishing we need to produce titles which are worth reading even when news is available on the net.  We need to construct the content on a lower cost base than before.   We need to do this without thinking about migration, but rather do it for its own sake.  If we try and migrate then we risk being out thought by nimbler  online only providers.  There are many ways we could do this and there is not a single right answer to content construction, but this is one approach that might be interesting.

1) Abandon the idea of writing breaking news or seeking scoops.  Instead act as a summariser and aggregator of all that has happened this week in your niche.  Think “The Week”. For those whose RSS feeders are full, or who worry they might have missed a key story  or event, what better than to have an experet (a b2B editor) sift, summarise and edit the most important stuff of the week and put it in one place.

2) Tear up your exisiting features plan.  You almost certainly can’t afford to produce it to the standard you would like.  Decide to publish fewer features but make them longer.  Long articles are not easy to present well on the web.  (One comment left on this site noted how much easier to read my rather long winded writing style would be  if it was properly laid out in a magzine) and are better presented on a dead tree.

3) Source your features from new sources.  Don’t depend on journalists.  Tragically in the new era model you can’t afford to hire many of them anyway.  Instead recuit a cadre of expert witnesses in your niche and get them to write about the key flexion points in your niche.  The test of a good feature in the new model is how useful is it to the target niche in helping them make better decisions.

4) Think about all the things you can do in a magazine that you can’t do on the web and then do those.  Examples? You have time, so write longer.  Paper is cheap and distribution costs are not weight driven so make it look beautiful.  If the web is about instant access to every document on earth, read ephemerally,  make the magazine about slow considered, thoughtful and essential matters that will be read repeatedly.  If you want someone to read a magzine it has to be essential.  Examine every article and really ask yourself, if I didn’t publish this, would it matter?  (If you want help with this do call me).  Write about what’s on the web. Provide lists of sources of further reading.  Look at experimenting with QR codes, run series of articles which mean that once you have read the first you will want to read the next (Thackray’s glib sayng of the day, “the purpose of this edition of the magazine is to get people to read the next edition.”)

5) Think about the ultra niche concept.  Writing an article about Gordon Ramsay is entirely different if the audience is hotel General Managers or Chefs.  The best magazines, we used to say, had the readers name on them, (The Grocer, Farmers Weekly, Fleet Car Buyer, Hairdressers Journal, Personnel Management).  Think the same way today, but define the grouping more narrowly.  By all means have more than one grouping.

5) Never, ever re write a press release and publish it as a story.

So much for magazines.  There is more but the answer will be different for each magazine and is a longer project than I can do justice to in a post.  What do you about circualtion policy? How do you re engage the enthusasm of advertisers and will it make money are all important lines of enquiry.

In the next post, we will have a look at answering the second part of the question.

What service can we provide online that will lock in targetted groups of decision makers and how can we help suppliers convey their marketing messages to those prospects in a way which leads our customers to increased sales?

As little primer for that discussion if we know a little more about what a feature in magazine is, what is a feature online?  An interesting perspective on this from an RBI inmate at his blog here .  Tip of the hat to Adam Tinworth who re tweeted this and brought it to my attention.

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February 6, 2009 Posted by | B2B Journalism, business media strategy | , , | 5 Comments