Special Report: Fast rise for 'Industry Standard'

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With 201 ad pages, the Feb. 14 issue of The Industry Standard was as thick as a fashion magazine and heavy enough to shatter a plate glass window.

Monster issues are becoming standard with Industry Standard. Approaching the two-year anniversary of its April 1998 launch, the International Data Group's magazine has lured readers and seduced advertisers almost effortlessly.

The title's base circulation has more than doubled, jumping from 60,000 at its launch to 150,000, 40% of that paid, with its April 1 issue.

Ad pages have grown at an even faster rate, climbing from 251.17 in the fourth quarter of 1998 to 1,678.12 in the fourth quarter of last year, an increase of 568%, according to tracking service Adscope.

Now the Industry Standard's magazine, conferences and Web site are on track to produce $100 million in revenues for 2000.

This year Industry Standard will publish 48 issues, up from 39 in '99.


Consumer advertisers such as Seagram Americas' Absolut vodka, which secured a recent back cover of the magazine, are buying space along with traditional tech trade advertisers. Automotive and airline categories are represented as well.

Industry Standard's rocketing trajectory seems to signal the weekly's success was preordained. But two years ago, there hadn't yet been a blockbuster Internet magazine. Internet World corralled a limited technology audience. Other Web publications failed. And Industry Standard started slowly, with its initial issues garnering less than 20 ad pages apiece.

John Battelle, president-CEO of IDG's Industry Standard Communications, says he remained confident, nonetheless, in the publication's potential. Mr. Battelle, who describes himself as a "fifth-generation Californian," uses a surfing metaphor to explain the success of the launch.

"Not that I'm particularly good at surfing, but the key thing about it is picking the right spot, so that you're right in front of the wave," Mr. Battelle says.

While other publications chose to ride the technology wave, Industry Standard decided to wait for what initially seemed a less promising swell. While other trades focused on the technology, Industry Standard saw that the Internet wasn't a speeds and feeds story, but instead a business strategy story.


"The story is not about the technology or the Internet per se," says Jonathan Weber, editor in chief. "The story is about the transformation of business being brought about by this technology."

Expanding upon his Beach Boys-style metaphor, Mr. Battelle says the surfboard -- in this case, the various media platforms where Industry Standard has a presence -- is critical.

In addition to the print publication, the publication hosts a Web site that is updated several times a day and tallies about 6.9 million page views monthly. Industry Standard also publishes 17 e-mail newsletters, which it says reach 240,000 opt-in subscribers. The most popular of these newsletters is the "Media Grok, " which critiques, often with a sarcastic and derisive tone, the media coverage of Internet topics five days a week.

This year the magazine will host at least five conferences, including its "iB2B" this month in Boca Raton, Fla. Company conferences have attracted the top names in the Internet industry.

For example, Industry Standard's first conference last July, "Internet Summit 99," was an invitation-only affair hosted by Mary Meeker, Internet analyst for Morgan Stanley Dean Witter.

Speakers included Amazon.com founder Jeff Bezos, Yahoo CEO Tim Koogle and Softbank Corp. President-CEO Masayoshi Son.

The summit also attracted 500 executives, each paying nearly $4,000, according to Industry Standard, which claims it turned away another 1,200 executives who wanted to attend.

It expects this year's conferences to be sold out "by the middle of the second quarter," says David Evans, VP-conferences.

The key readership target of each of these brand extensions is comprised of the people the magazine has christened "Internet business strategists." They are the people who are deciding how their companies will attack e-business. A wide variety of advertisers is scrambling to reach this audience.

"The target they're reaching is undoubtedly an upscale target, a sophisticated target," says Laura Bracken, VP-media director with Saatchi & Saatchi, San Francisco.


Saatchi has placed ads in the publication for Hewlett-Packard Co. and other clients. About 35% of the title's advertisers are dot-com companies, such as B2Bworks, an Internet advertising network for business-to-business marketers.

B2BWorks bought a spread in the Jan. 31, Feb. 14 and March 13 issues and banner ads on the Web site and sponsored an e-mail newsletter and will sponsor an upcoming conference, says Bill Furlong, B2BWorks' president-CEO.

"Industry Standard, for us, is a magazine that is reaching everyone we want to reach: marketing people, [information systems], the investor community and the e-commerce director title," says Mr. Furlong, a former managing director of Advertising Age sister publication Business Marketing.

Currently, Industry Standard fills its pages with much more dot-com advertising than it anticipated.


"The nice thing about the explosion of dot-com advertising is we didn't plan on it," Mr. Battelle says. " . . . If it were to go away tomorrow, we'd still be a healthy magazine."

He says he is less concerned about the dot-com bubble bursting or Internet consolidation cutting ad pages than he is about the clutter that is beginning to characterize the thick-as-a-brick weekly issues of the magazine. Mr. Battelle says he hopes to boost ad rates to create a less cluttered vehicle for repeat advertisers.

The flood of advertising also results in unanticipated editorial pages. On some issues, the editorial staff had to place a cap on the number of pages it could produce.

To handle the problem, the editorial staff was beefed up to 75 from only 25 at the time of launch.

Industry Standard plans to continue its editorial expansion, promising additional print products, an expanded Web site, more e-mail newsletters and further conferences.

An influx of $30 million from a variety of investors, including Morgan Stanley Dean Witter, will be used to fund these additional products and international expansion.


Mr. Battelle says, however, that the funding is not necessarily a prelude to an initial public offering.

"The business is doing so well, the last thing I need to do is sell off a bunch of it to the public," he says, "but there may come a time when that makes sense."

For now, life is good. Advertisers keep rolling in. More than 130 new contracts have been signed for 2000, says Publisher Steve Thompson.

An atmosphere of celebration seems to envelope Industry Standard. It is becoming famous for its Friday night parties where it brings together those who implement the new economy with those who report on it. The gatherings take place on a rooftop overlooking the San Francisco skyline and the Bay Bridge.

It's all part of the wave Industry Standard is riding, and that wave is no longer a simple whitecap. It has turned into something bigger. "We're just racing to stay ahead of the tidal wave, " Mr. Thompson says.

Copyright March 2000, Crain Communications Inc.

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