Jordan, Edmiston's Mead addresses publishers' online challenges, opportunities

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Richard Mead, managing director at Jordan, Edmiston Group, a New York-based media investment bank, answered some questions from Media Business about how well business media companies are adjusting to the primacy of the Internet and what they can do better.

Media Business: What promising areas of potential online revenue are b-to-b publishers not taking advantage of?

Mead: The current hot topics are social media and mobile. My publisher friends tell me that social media can certainly help to build communities, but the revenue model is less clear. And the last thing that b-to-b publishers need right now is another loss-leader in their portfolios. However, there is no question that social media is powerful in its reach and needs to be taken seriously. All b-to-b publishers are studying it closely; someone will likely solve the revenue-generation conundrum in the near future.

Mobile is still very young, and its penetration as a marketing medium is small compared to the Internet. Ad revenue being driven through mobile is still minuscule in comparison to other media. Still, there is a rapid increase in content and ad delivery via mobile devices, and there is no question that new technologies and opportunities are arising every day on the mobile front. Plus, Google and Apple just made large bets—$1 billion between them—on mobile ad networks and delivery technologies, and who can reasonably question the investment choices of these technology powerhouses? Certainly, mobile is a young medium, but one not to be overlooked.

MB: What are the biggest challenges to b-to-b publishers' generating sufficient and sustainable revenue and profit online?

Mead: The biggest challenges facing b-to-b publishers in generating sustainable revenue and profit online are customers, competition and capital. Many companies that have traditionally advertised and marketed through b-to-b media have struggled financially during the economic downturn. As such, they have turned to other, cheaper marketing channels, primarily online, and have diverted large portions of their marketing budgets to these new media. Startups are constantly creating new competition for b-to-b media companies. These firms are unburdened by legacy media assets and are provided with free rein to create new, compelling online models. To compete, publishers will need more capital to invest in the repositioning and strengthening of their brands and online offerings. Unfortunately, capital is in short supply, both internally and from external sources, and this may lead to further consolidation in the b-to-b media industry.

MB: What can the more traditional b-to-b publishers learn from the experience of tech publishers, who always seem to be on the bleeding edge of online publishing?

Mead: Not so long ago, an IT b-to-b publisher was issuing monthly bulletins on declining revenues and increasing market share. Pyrrhus (the king from ancient Greece who fought successful battles but with heavy losses) would be familiar with this concept. The IT sector has been overserved with print magazines for many years, and traditional IT publishers have seen their market shares eroded by street-smart online startups. The response has been to go all-online, even though some subsectors of the IT industry may still prefer print over electronic delivery.

Publishers in other sectors will have observed that: a) Market leadership comes from providing comprehensive, valuable, quality content in a timely fashion, and b) it takes capital to achieve this. The last one standing should win, provided that the ROI proposition for marketers is demonstrable and can withMB: What are b-to-b publishers doing well online and can you cite some examples?

MB: What are b-to-b publishers doing well online and can you cite some examples?

Mead: Most publishers now have a much better sense of what their served markets need in terms of content, frequency and delivery mechanisms. Print magazines continue to exist, despite many doomsayers' dire predictions, and certain sectors still prefer print over online delivery. However, this is likely to change in the coming years, as digital delivery systems continue to improve (e.g., Apple's iPad, etc.).

Publishers with the best prospects for long-term viability are those that use a fully integrated media approach, with one or more Web sites at its core, to bind their communities to them as the source of marketing intelligence about the industries they serve. For example, CFO magazine, recently acquired by Seguin Partners, has accomplished this well. It developed as its online centerpiece and uses it to promote other b-to-b products and services to its readers. The Web site provides CFOs with the information they need 24/7, while the magazine provides the platform for thought leadership.

Broadcasting & Cable began its transition to online under the ownership of Reed Business Information-US. Now, under the ownership of NewBay, its reach can be broadened through leveraging the Web sites of other leading broadcasting industry media and titles in NewBay's stable.

MB: In what areas can b-to-b publishers improve their online offerings?

Mead: American Business Media ran a session on virtual events at its Executive Forum conference last year. The audience of b-to-b publishers was very taken with the concept—lots of “oohs” and “ahs.” Nevertheless, digital expos are not a panacea for distressed publishers. Rather, they may add another valuable online media outlet to reach a targeted audience and bring customers and suppliers together. Live events are still very much alive and offer a key component that virtual events do not—a face-to-face, live interaction with potential business partners. Still, we are likely to see virtual events continue to increase in usage and size in the coming years.

The overall message is that the Internet is very flexible, with new technologies and opportunities arising all the time. Publishers with the imagination and willingness to provide tailored online offerings to meet their customers' needs will find lots of ways to do so.

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