Chicago—Facing a likely recession in the U.S. and unprecedented volatility in global financial systems, a panel of seasoned media leaders discussed their management strategies and priorities at ABM's annual Top Management Meeting last Wednesday.
"We've been doing what Booz tells us not to do," said Andrew Goodenough, CEO of privately backed Summit Business Media, referring to a study conducted by Booz & Co. for ABM. The study, released at the ABM meeting Tuesday, advises media companies to pick one of two paths–one focused on solutions for marketers and the other focused on solutions, primarily online and data products for end-users.
"In my view, advertising is a rocket fuel of profitability," Goodenough said, noting that 50% of Summit's revenue comes from advertising. Founded two years ago, Summit serves the insurance, investment and financial services industry; it has made seven acquisitions, tripling in size. Goodenough later made an impassioned plea for publishers in the room to be "very careful" not to denigrate their core print businesses, even as they shift large portions of their business to the Web.
Charles McCurdy, chairman-CEO of Apprise Media and moderator of the CEO panel, also referenced the Booz study.
"The solutions [in the report] are great," he said, but then quipped: "This past Saturday night I was having dinner in Montecito, which is outside of Santa Barbara, where all the rich people's houses have burned down. And I was just thinking that Booz coming here to give this survey is a little bit like an interior decorator showing up to peoples' houses that are on fire."
Ty Bobit, president-CEO of Bobit Business Media, said print titles can work, given a careful consideration of an opportunity. For instance, he said Work Truck, a title launched last year, has done well. By plumbing the title's circulation of truck fleet owners, he is able to deliver qualified leads to car manufacturers, going so far as to use a telemarketing operation to set up appointments between these buyers and sellers. "We have 10 magazines that have a better gross profit in 2008 than in 2007," he said.
But the dominant theme of the session was cost savings. Bobit, for instance, has asked all his publishers to make a 10% cost reduction. Goodenough talked about consolidating printers, taking down paper quality and reducing circulation.
Marion Minor, CEO of M2MMEDIA360, a six-year-old company with 16 titles covering the beverage and retail store sectors, said the uncertain economy had "increased the appetite or the comfort level" for risk within her company and has been a catalyst for innovation. She said it was important to "challenge the conventional wisdom" that a bigger circulation is always better, adding that reducing circ is sure to hit resistance from long-time publishers, editors and salespeople.
Indeed, when McCurdy asked the audience if they, too, were looking at reducing circulation for their titles, approximately a quarter of the people in the room raised their hands.