Jack Griffin, former CEO of Time Inc. and Meredith Corp., opened the recent American Business Media Annual Conference in San Francisco with a frank keynote address exploring how media companies must adapt to the decline of print advertising.
“Advertising isn't going to support all of the media companies that exist today,” he said. “We need to do something more.”
The conference, which had the theme “The customer-driven future,” examined ways b-to-b media companies can transform themselves to generate more revenue from their audiences—both directly from their readers and indirectly by providing marketers more targeted ways to reach those readers.
To plan for a future in which advertising's primacy fades, Griffin said media businesses “have to run two companies simultaneously—one for today and one for the future.”
During Griffin's tenure at Meredith, which publishes consumer magazines such as Better Homes and Gardens and b-to-b title Successful Farming, the company built what were essentially two new businesses: a $75 million custom publishing group and a $180 million integrated marketing group.
“The strategy came fundamentally from b-to-b inspiration and thinking,” Griffin said of these initiatives, which aim to offer 360-degree contact with the customer and rely on “deep domain knowledge and expertise.” He suggested that b-to-b media companies focus on four building blocks: 1) data and audience, 2) content and brand, 3) convening power and community, and 4) social and mobile.
In these potentially ample opportunities, however, myriad challenges lurk. “I have to be very thoughtful about the opportunities I chase,” said Peter Westerman, chief audience officer at Summit Business Media, who spoke at the conference.
In his presentation, Westerman, who had held a similar position at Ziff Davis Enterprise, offered a cautionary tale about that company's sale earlier this year to QuinStreet, which ultimately valued the lead-generation database much more than it did the media brands that created that database. “It was really breathtaking to see that happen,” Westerman said.
Shortly before its sale, ZDE abandoned print and embraced all-digital publications. In retrospect, Westerman said, it would have made sense for ZDE to keep at least one print publication. He said CIO Insight would have been his choice, because it reached an older audience that still reads ink on paper.
Westerman also said publishers had to be cautious about counting on digital editions to replace print revenue dollar for dollar. He warned that even though they can eliminate paper, printing and postage costs, digital editions will not command rate base pricing structures in the same way print magazines do. “The notion that advertisers will pay according to a rate base, we [at ZDE] saw very quickly that is never going to happen,” he said.
Another speaker, Gordon Crovitz, co-CEO of R.R. Donnelly & Sons Co.'s Press+, which has provided metered model subscription software to hundreds of media companies, disputed the Internet maxim that “information wants to be free.” He countered, “Information wants to be paid for if people want to pay for it.”
Chad Phelps, chief digital officer of b-to-b and enthusiast publisher F+W Media, challenged b-to-b media companies to generate more revenue directly from their audiences. He described F+W's e-commerce strategy, which uses 25 online storefronts to sell content such as archived stories or events to Web users.
Phelps said that when he joined F+W in 2008, about 90% of its digital revenue came from advertising. Even though its online advertising continues to grow, it only accounts for 16% of current revenue because e-commerce revenue has boomed, he said.
In his address to the membership, ABM President-CEO Clark Pettit acknowledged the challenges facing b-to-b media companies in the digital age, which include the rise of mobile and social media. But he emphasized that these challenges represent opportunities.
Pettit encouraged publishers to examine the “why” of their existence (to serve an audience and the marketers looking to communicate with it) rather than the “what” of their existence (publishing magazines or producing trade shows).
B-to-b media companies have always been good at creating communities, a skill that should serve ABM members well in the era of social media, Pettit said. He also said that with the barrage of information people are experiencing, b-to-b media companies can play an important role—providing “order in the chaos.”