BtoB

Purchasing co-op delivers large cost savings to members

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B-to-b marketing veteran Bill Walker was mulling his next move after B2B Works, the online ad network he helped create in 1998, was sold in 2004 by its VC owners for $5 to Saints Ventures.

Walker recalled previous discussions he had had with Alan Douglas, president of Douglas Publications, about how small b-to-b publishers constantly struggle to keep costs under control.

"We talked about how smaller b-to-b publishers could aggregate together and provide a service for cost savings," said Walker, who was VP-marketing at American Business Press (now American Business Media) from 1992 through 1995. "When I left B2B Works, I started to have those same conversations with Alan again."

In the spring of 2005, Walker and Douglas launched the Integrated Media Cooperative. Walker serves as president of IMC, and Douglas is chairman.

The main criterion for membership is to be an independently owned business publisher with annual revenue of $5 million to $300 million. Publishers that want to participate in the co-op buy a "share" for $10,000; there are no annual dues.

The co-op now has 15 members: Allured Publishing Corp., Ascend Media, Douglas Communications, Edgell Communications, Farm Journal Media, Grand View Media Group, Meister Media Worldwide, Lebhar-Friedman, Northstar Travel Media, Putman Media, SpecComm International, Stamats Communications, Trade Press Publishing, Vance Publishing Corp. and Watt Publishing.

Walker said he hopes to boost the number of members to 20 by the end of this year.

IMC has preferred partners for the purchase of e-mail services, fulfillment, digital media, list services, payroll, office supplies, reprints, research services, telemarketing and webinars, among other areas. Walker has also developed IMC committees on circulation, CRM, digital media, manufacturing and paper.

IMC members have realized substantial savings through the program. Vance, for example, has saved roughly $250,000 on paper, payroll and shipping, Walker said.

Brent Kizzire, operations director at Grand View Media, said he hopes that by this summer the company will have saved more than $50,000 in paper costs. Grand View Media assumed membership in IMC last June when it acquired NTP Media.

Kizzire said the paper savings have been solely tied to Grand View's Bowhunting World (95,000 circ.). "I'm looking at this as an education period," he said. "If we see significant savings, we'll start to buy for other books. The b-to-b magazines we bought from NTP, which include CM/Cleaning & Maintenance Management and CM/Cleanfax, are great candidates. … Paper savings are a huge opportunity."

Walker said his inspiration for IMC was the PAGE (Publishers Associated to Gain Economy) Cooperative, a group of privately owned daily and nondaily, general-interest newspaper companies that in the last 20 years has saved its members more than $2 billion.

"The concept is viable and is starting to catch on," said Gary Fitzgerald, chairman-CEO of Meister Media, one of the founding companies of IMC. "As membership grows and aggregated buying becomes larger, members will be able to have more meaningful dialogues with vendors."

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