BtoB

Firms establish U.S. beachheads

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Reed Elsevier plc's $4.6 billion acquisition of medical science publisher Harcourt General Inc. late last month is another reminder of the voracious appetite of European publishers for U.S. media properties.

But amid all the huzzahs about "synergy" and "win-win," how will the recent spate of deals originated by overseas buyers affect the marketing efforts of their new U.S. units?

European companies driving the consolidation in b-to-b publishing can follow at least two scenarios. They can combine similar business titles, Web sites or trade shows. They can also integrate marketing plans among the units. In either case, they will eventually weed out unsuccessful publishing products or promote profitable titles that operate in markets the companies seek to dominate.

But before any plan can be executed, the companies have to get all their corporate ducks in a row, according to industry observers.

"It's probably a year or 18 months down the line before [media buyers] see any real, usable marketing plans" among the consolidated companies, said Mike McHale, group media director, International-U.S. for New York-based ad agency Optimedia. "They first have to set up a strong corporate structure before you'll see a new sales identity."

 Indeed, establishing new brand identities could prove problematic for all of the companies involved. This is especially true in the case of VNU, which killed the "Miller Freeman USA" name after buying it from United News & Media plc earlier this year. VNU is currently folding the assets formerly owned by Miller into VNU USA, formerly Bill Communications.

"People tend to overstate syn-ergy," said Kelly Conlin, president-CEO of International Data Group. The publisher of The Industry Standard and CIO, among others, Boston-based IDG has for years had a huge international presence. "It's hard to mandate from a boardroom a plan that will translate into benefits for the [advertiser]."

Conlin said it will be interesting to watch what becomes of technology publisher CMP Media Inc., which United News retained in the VNU sale, and Ziff Davis Media Inc. (owned by the venture capital firm Willis Stein & Partners). There were rumors at the time of the Miller sale to VNU that United would eventually sell CMP.

Once the consolidated companies have agreed on a game plan, they can try to capitalize on their new breadth.

"The combined companies must look at each market they're in and say, `Does this travel well?' " said Bob Crosland, a managing director with media investment banking company AdMedia Partners Inc.

"The test of good b-to-b advertising is that the company fully understands [its] target and delivers it in its most direct, simple form," said George Fertitta, president of Margeotes/Fertitta + Partners L.L.C., a New York ad agency whose b-to-b clients include The McGraw-Hill Cos. and Putnam Investments.

Eric Scheck, a senior partner and international group media director for MindShare, the media buying department owned jointly by ad agencies Ogilvy & Mather and J. Walter Thompson, said "trade media tend to be more flexible in getting their products to market." MindShare, whose clients include IBM Corp. and Goldman Sachs & Co., believes that "with b-to-b, because individuals work in the same field, there's no need to adjust the message to fit the local need," he said.

Richard Mead, a managing director with the investment bank The Jordan, Edmiston Group Inc., stressed that other international b-to-b deals are on the horizon. "There's much more collaboration among the b-to-b CEOs, more than people realize," he said. "They have game plans in the billions of dollars. In five years, you'll have left maybe 10 major international information providers."

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