This month's ABM Executive Forum offered several clear-eyed assessments of the challenges involved in a traditional b-to-b media company's attempting to introduce paid content or data businesses.
With print advertising revenue down about 30% across the board this year, many business media companies have contemplated entering the subscription data business. In her remarks at the forum, Anthea Stratigos, CEO of analyst firm Outsell (itself a paid-content business), cautioned that data businesses may not be as attractive as they seem at first glance—even though creating a new revenue stream is tempting.
Stratigos pointed out that b-to-b trade publication advertising is expected to grow at a 4% compound annual growth rate between 2009 and 2012, according to Outsell estimates. In the same time frame, Stratigos said, legal and tax information businesses are expected to grow at a lesser rate, 3.5%. She also said there will likely be more data businesses entering the market in 2010, which could drive down prices.
She also cautioned that sales staffs for marketing programs and for subscription data businesses “are two different animals.”
Additionally, with few exceptions—Hearst Business Media being one—most b-to-b media companies that have data divisions, such as Randall-Reilly's Equipment Data Associates, have acquired the businesses rather than launched them. “It can be done,” Stratigos said, “but it takes deep pockets.”
Megan St. John, managing director of InfoCommerce Group, was more optimistic. She presented five general categories where b-to-b media companies could potentially launch paid content businesses: locate (buying guides, directories); buy/sell (lead generation); evaluate (audit and risk analysis, rating services); benchmark (industry benchmarks); and organize (registries and root datasets).
St. John stressed, “Know the customer and how the customer uses the data.”
Finally, Mike Lonier, CIO of The Deal LLC, discussed how his own company launched The Deal Pipeline last year. The launch transformed the company from an advertising and individual subscription business to one that sells seat licenses for enterprise level customers.
Lonier said The Deal hoped to double its revenue from end-users within a year of the launch and it has essentially accomplished that goal. But it took a massive development job to transform The Deal's content from a magazine-style Web site to one with the deep, searchable content of a database, he said.
“Our history (as a print publication) is both an asset and something you have to manage,” Lonier said. —S.C.