Private equity will improve the b-to-b industry

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I have spent more than 25 years working in the b-to-b industry. During that time, working for both public and private companies, I have experienced the pros and cons of private versus public b-to-b media companies. I have seen many of the public companies become frustrated about the cyclicality of our advertising-driven, controlled-circulation models. I have heard people say, "I wish there were more paid circulation b-to-b brands." I have observed several private companies be more willing to take a long-term view and be more patient with their launches. We are in the midst of a major transition from print to online, and many of the companies will find that private equity funds will be excellent partners in this process.

My experience in the b-to-b industry spans several different areas, with a primary focus in general management since the mid '80s. I started in advertising sales, became an advertising director and then a publisher. A publisher is one of the alltime great media roles, and its face to the industry is unique. This is the way many of us grew up in the business.

Then I moved into operations, becoming VP-operations at Capital Cities/ABC. This job was essential preparation for my general management roles, starting with my first as president of the special interest consumer magazine unit.

This was during the "Murphy/Burke/Sias era" and it gave me true appreciation for operational excellence and the need for efficiency. The skills of an experienced publisher, together with operational expertise and an appreciation for product excellence, will be required as our industry moves forward. We need to focus on our strengths if we are going to be successful in this process.

As an industry, we have always been about bringing buyers and sellers together by generating leads—both in our publications and through our live events. This strength is not exclusive, and we need to continue to offer vehicles that allow for brand building by our clients. We need to be diligent and make certain that we are providing both print and online opportunities that deliver on their promise for our clients' needs.

During the nuclear winter of 2002–04, I actively participated in the search for more subscription-based properties to offset the advertising decline. A balanced portfolio should continue to be a priority.

Then the paid search model—or perhaps we should call it the "lead-generation model"—emerged, with Google leading the way, as the recovery advanced.

During this time, all of us accelerated the development of our online platforms—built around our strong brands—with community-based sites and strong lead-generation components. In spite of the cyclical nature of our business, advertising and sponsor-driven models—when combined with robust lead-generation programs—will remain strong and continue to be the most viable marketing vehicles for client companies in the diverse sectors we serve.

During this transition process, there will be disruptions. The ownership of these unique brands will continue to evolve, as new investors/owners come into the b-to-b market. Many weaker brands will not survive, and those that misjudge this migration will be replaced by those with a clearer vision of the future.

I believe this transition will continue to be greatly assisted by private equity funds that love our business, our cash flow profile and our low capital expenditures.

These investors embrace our models and understand that in a private light, we will re-engineer our models once again, as we have over the past 100 years. We must be prepared to go beyond our historic Fortune 1,000 accounts.

Through new "self-serve advertising options and other innovations" made available to the "long tail" by Google, Yahoo and Microsoft, we must open our audiences to small and midsize enterprises. Strategic investors will rediscover the strength of our re-engineered companies. Over the many sectors we serve as an industry, these companies will emerge from this period with their well-known brands intact and with new online offerings that will enhance their position.

Jim Casella is CEO-in-residence at Austin Ventures and was most recently vice chairman of Reed Business, the world's largest b-to-b media company. He can be reached at [email protected]

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