Business publishers cut costs in response to economic downturn

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Business publishers across a wide variety of markets are busy paring costs in response to the economic downturn. Media Business asked a cross-section of publishing executives at American Business Media’s Top Management Meeting this week in Chicago about where they plan to shave costs the remainder of this year and in 2009.

“Our market has been in a deep downturn for a year and a half, so we’ve been systematically going through all our businesses to look for every savings,” said Frank Anton, CEO of Hanley Wood, which has several products that focus on the construction industry. “[For example,] we cancelled our national sales meeting, which was a big deal for us, and we scaled back our holiday party to be very, very modest. We eliminated reader service cards. This year, for the first time in Hanley Wood’s history, we’ve had staff reductions. By year’s end, we will have decreased staff by 15%—about 100 positions. We reduced our qualified circulation by 10% to 12% across the board. We’ve reduced frequency by between 13% and 15% across [a number of titles]. In 2009, we may eliminate some titles completely, although none of our flagship brands. We have some smaller, very niche titles that do well in good times but which the market can’t support during bad times.”

On the plus side, Anton noted that Hanley Wood is still investing in parts of its business that are doing well. “Our electronic media [revenue] was up 40% this year, and we expect it to be up 10% to 15% next year,” he said. “Our events were up modestly this year, and they will probably be flat in 2009. Our data business got hammered in 2008 because our customers were the top builders, but we think we’ve hit bottom.”

Neal Vitale, president-CEO of 1105 Media, said: “We saw this [economic downturn] coming, so we have been preparing by shaving expenses everywhere. We are going into 2009 with a zero-base budget plan, not making any assumptions based on the past. We don’t want to make knee-jerk decisions. We’re trying to deploy our assets as best we can against the business opportunities we see.”

Ty Bobit, president-CEO, Bobit Business Media, said that going into 2009 he has asked his publishers to create contingency plans for cutting costs by 10%. “Our business has been holding up in 2008, even since September [when the financial markets started reeling], but I know [the downturn] will hit us,” he said. “Everyone is paralyzed. Our advertisers don’t know what they will be able to do, so we don’t know how to budget accordingly.”

Harry Sachinis, president-Business Information Group, McGraw-Hill Cos., said: “We’re not shaving costs willy-nilly. We have been transforming our business for some time, and part of that process has been working all the time to be more effective and efficient. With the economic downturn, we are simply accelerating what we have already been doing.”

Bob Carrigan, CEO, IDG Communications Worldwide, said his company has decided that it will not subsidize unprofitable print products. “The downturn will put more pressure on any products that are not growing, but it’s a mathematical formula that determines which magazines become unprofitable and when,” he said. “We separate the value of each of our brands from their distribution channels. Our brands have tremendous life online and in events, where they can be very profitable. We evaluate the whole portfolio. It’s about brand management.”

Carrigan added: “As the business changes, we marshal our resources to where business is growing, such as lead generating activities and regional events, for example. While positions may have to be eliminated, we try to move people into new positions. We still have jobs we need to fill.”

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