Online 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 three-quarters 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-to-peer 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. M