Additional services diversify revenue stream as print spending slows down
YGS Group, a company with roots in the printing and graphics services industry, last month added custom events management and production to a roster of services that has grown to include reprint management, ad sales, creative services, printing and fulfillment.
The events division will focus on serving associations with 30,000 or fewer members and b-to-b publications with a circulation of 100,000 or less—publishers that could be looking to capitalize on the cost savings associated with outsourcing events services, said Jim Kell, president and owner of the company. The initiative will be led by Kelly Winkler, former executive producer of the Inc. 500|5000 Conference.
Media Business spoke to Kell about the decision to diversify, his expectations for the events division and why a bad economy could make a good launch environment.
Media Business: How does the new division fit into your business strategy? What kind of revenue do you expect?
Kell: In 2009, we're looking for that division to be a couple million dollars. I expect it to double and triple very quickly. YGS Group is a $30 million company today. I think in the next five years that will double, and events [will] play a part in that. The advertising sales division, and creative and Web divisions are also growing fast.
The division that's the most stagnant is printing. Page counts are down. Customers are printing fewer copies or smaller-sized issues. That's really why I want to diversify. If we were sitting here today as a printing company, we would be in the same position as our colleagues in the print industry. We've diversified with these other divisions, and their growth has helped the company move forward despite print moving backward.
MB: Do you expect events to become part of the core of the company?
Kell: I expect events, advertising sales and reprints will be the core of the company. It will be less of a print company and more of a sales organization.
MB: It's an interesting time to launch an events division. On one hand, events have proven to be a strong revenue stream for publishers. On the other, we're starting to see the impact of a down economy. Where do you see the untapped market?
Kell: It's a tough time, but there's plenty of opportunity to grow. You just have to pick the right opportunities. Right now, we're positioned in the outsource trend, which I believe will continue in the association and b-to-b publishers space. We've already successfully sold events. If nothing else happens in 2009, we've reached a break-even. That happened very quickly.
As events start to generate less revenue, the publishing community is saying, “Can we continue to support that with our existing staff?” YGS Group can provide a service that allows them to execute a large-scale successful event, generate the revenue and diversify the cost of the events staff among multiple events. That's what we're trying to capitalize on.
MB: What is the strategy for promoting the service and integrating it with existing offerings?
Kell: The biggest challenge we have is the sales training. From an external sales standpoint, this changes the role of the sales representative. You're not simply reaching out to a publisher with reprint services. You have to listen to the publisher or association—what their needs are—and know how to carve out the services that best fit their needs.
MB: What is your vision for the company five years from now?
Kell: The trend of reducing cost as much as possible and looking at outsourcing opportunities has become apparent. That's why we've grown the variety of services. The vision five to 10 years from now would be to continue that. A lot of services we've offered are in their infancy, so it's continued investment, continued strategic directives that would enable us to continue to grow. M