Bobit Business Media CEO: “Last year was the worst year in our 49-year history.”
Bobit Business Media will be celebrating its 50th anniversary in January 2011, no small feat in today's evolving publishing environment and onerous economic times. The company publishes 20 print magazines in the business-to-business space in automotive aftermarket, law enforcement and physical security, and beauty segments (such as Automotive Fleet—the company's first publication launched in 1961—Limousine, Charter and Tour, Modern Tire Dealer, Police, Nails and VietSalon). It also produces nearly 30 websites and 14 events, and as Ty Bobit, Bobit Business Media's president and CEO, explains, is " pretty much a typical b-to-b media company," focusing on print, -in-person and online methods to reach its audiences.
Also typical of many b-to-b companies is the uncertainty Bobit Business Media and its leader of 35 years faced during 2009 about the future of the industry and the company. This year, however, Bobit says things are looking up significantly financially, and the company has a better handle on where it's headed. It's investing in areas where it sees the most growth potential and is cautiously prepared to face impending changes in media consumption as they impact the markets the company serves.
Here, Bobit shares with Publishing Business Insider's special Executive Insights edition his concerns about challenges in print and events—though he expects print to "stay healthy for a good number of years to come"—and his outlook on the iPad, mobile content and his company's future in an increasingly integrated media world.
The Revenue Picture
Noelle Skodzinski: What is Bobit Business Media's fastest-growing revenue segment?
Ty Bobit: Law enforcement has really taken off for us this year for both print and online.
Skodzinski: To what do you attribute that?
Bobit: One key factor was upgrading our staff. We took advantage of the chaos going on in media last year and universally tried to upgrade people where we could. It's making a big difference. We also developed a better online strategy for law enforcement that's been working incredibly well. We've tripled our revenue year-over-year.
Skodzinski: What is the company's largest revenue segment?
Bobit: Our largest revenue segment is vehicle fleets. That is made up of car and light truck fleets, school bus, transit bus and motorcoach fleets. My father started the company with Automotive Fleet in 1961, so fleets have been our forte for nearly 50 years. We're also in the automotive aftermarket, law enforcement and physical security, and beauty segments.
Skodzinski: What percentage of your revenue currently is driven by print?
Bobit: We're currently at 68 percent. That's down three percentage points from a year ago.
Skodzinski: Where do you see that figure in two years? Five years?
Bobit: I expect we'll bring the percentage down a little every year until there's a mass exodus (from print). Who knows where technology will be in five years and how many of our print-oriented readers will make the leap to e-readers or be displaced by younger people who prefer getting their information online?
Skodzinski: What percent of your total revenue is driven by digital (Web, e-newsletters, etc.)?
Bobit: We're currently at 15 percent, up from nine percent a year ago. Online revenue is up 34 percent year over year.
Skodzinski: Where do you see that figure in two years? Five?
Bobit: We're trying to lead our advertisers into a more integrated approach. I see us being in the mid-20-percent range in two years. Five years from now we may be at 40 percent to 50 percent. The world is changing fast.
Skodzinski: You publish 20 print magazines and 29 websites. This is not entirely unusual, especially today, for Web products to outnumber print products, but can you explain why this is the case for your company?
Bobit: We have more websites than print magazine titles due to us also including our event websites in our portfolio numbers. We expect them to generate good traffic and produce revenue for us.
Skodzinski: You currently produce 14 events. What percent of your revenue do events contribute?
Bobit: Trade shows and conferences represent 17 percent of our total revenue.
Skodzinski: Have events been a growth area for you? Do you anticipate them to be in the future?
Bobit: We've been producing trade shows for 26 years. Generally speaking, events have been doing well for us. Most are now flat or growing. A lot depends on the market.
It's a real challenge building the attendance to make our exhibitors happy. That's where we're putting a lot of our resources. If business continues to ask more from everyone, I expect we'll see less people traveling to events, and it will be difficult to keep up overall growth.
Skodzinski: What are other significant revenue drivers?
Bobit: We're pretty much a typical b-to-b media company right now focusing on print, online and events.
Skodzinski: Have you held any virtual events or webinars? If so, do these provide significant supplemental revenue, or do you expect them to in the future? If not, do you plan to?
Bobit: We conduct 20 or so webinars annually, and they've been great lead-generators for our sponsors. An advertiser would have to run a full 12- month schedule to get as many leads off of ads as they do from one webinar. Unfortunately, a lot of marketers in our segments are not seriously interested in lead-gen and feel that webinars are too expensive.
We haven't conducted any virtual events yet, but we definitely see this as an opportunity for us, especially in market segments where people have travel restrictions.
Skodzinski: Where is Bobit Business Media investing most heavily?
Bobit: The Web, of course, is our No. 1 area for investment. We have a great, growing in-house Web team, and we're looking for ways in which we can automate more. We've also invested in training for our content producers and salespeople.
Additionally, we're really focusing on growing deeper in each of the segments we're currently in. We're challenging our publishers to develop more revenue-generating ideas, and we continue to look for acquisitions that make sense. Rich media intrigues me, and that could be a big new area for us.
Skodzinski: Has the way you serve marketers/potential advertisers changed in the past year or two, or is it changing now? If so, how?
Bobit: We've always been very consultative in our sales approach, and we thankfully have publishers and salespeople who've been with us a long time. They know their markets and do a lot of hand-holding. We're building our salespeople into e-media experts who can help lead their customers into the online world.
Skodzinski: Bobit has been known as building a significant lead-generation business. Is this still an area of focus for you, and if so, how have you built upon it? What new things are you doing to build your lists and generate leads?
Bobit: What marketer doesn't like sales leads? We do have one market, though, where leads are really critical, and our people have been very proactive to do whatever it takes to generate leads to keep their customers happy. That includes online, print and even telemarketing.
On building lists, our audience-marketing people have really been on the ball developing community through social media and SEO [search engine optimization]. Their job is so incredibly different today than it was five years ago. It's exciting to see how much more of an integral partner they've become to our brand teams.
Skodzinski: Where do you see Bobit's print publications fitting in to the company's long-term strategy?
Bobit: I think print has good potential to remain a strong revenue producer for us in our niches. We have very close relationships with marketers, and our magazine brands are trusted.
Even though the online experience is growing for our audiences, most of those people are older and continue to embrace print. Sure, over time things will change, but if we can keep our titles No. 1 in their markets, they should stay healthy for a good number of years to come.
Skodzinski: What are the company's biggest challenges?
Bobit: For the most part, we're in smaller niche segments, so getting the critical mass necessary for the Internet is difficult. We couldn't survive solely in a low CPM online world. We have to find ways to increase revenue in areas outside of advertising.
Skodzinski: Do you think the iPad is the answer to mobile magazines ... and/or that mobile/digital magazines are the future of the industry?
Bobit: I've been reading books on a Kindle for five years and love it, but never found the medium to be user-friendly for the non-book reading experience such as newspapers. The iPad brings in some great opportunities.
I don't think the answer is viewing a digital edition on these electronic devices, though. I like the kind of stuff Sports Illustrated is doing, but we don't want to put the cart before the horse. We monitor how our audiences receive their information, and we'll be ready for iPads when the time is right for us.
Skodzinski: Have you launched products in the mobile space? If so, can you give a couple of examples of what has been successful for you? If not, do you have plans to ... and why or why not?
Bobit: We haven't launched anything to date, but we're close to launching mobile apps in some of our markets. Since we're in fairly low-tech markets, we feel we can watch others in more sophisticated markets conduct the R&D. We're happy to learn from them.
Even More Interesting Stuff
Skodzinski: You serve a few industries that were hit particularly hard during the recession. What is something your company did right to survive through difficult economic times?
Bobit: You're correct; the automotive industry was hit really hard last year and late '08. A number of our bigger advertisers went dark or twilight. We did what a lot of companies did, we cut costs wherever we could. We shuttered five titles in 2009, and as a last resort, we laid off 20 associates. I hated to do it, but it was absolutely necessary. Last year was the worst year in our 49-year history. This year we're seeing the results. Profits are up significantly.
Skodzinski: What are you most excited about this year?
Bobit: This was the second year in a row in which our associates didn't receive compensation increases. Earlier this year, though, we instituted a year-end bonus program based on overall profit performance. At the end of every quarter our CFO and I give a state of Bobit Business Media presentation that includes a lot of financial information. It lets our people know how we are progressing toward having them receive their bonus.
Things are looking really good, and I can't wait to present everyone with a check at year-end. Our people have been wonderful working with us through the tough times and they deserve to be rewarded. I'm also very excited that my son, Blake, recently joined the company. He loves the business and brings a whole new perspective to it. My father still comes in at 7:30 every morning when he's not traveling on business, so we now have three generations of Bobits working under one roof. It's great!
Skodzinski: What is the best business decision you have made during the past year or two?
Bobit: Besides implementing our cost-cutting initiatives, I put one of our group publishers in charge of e-media. The fact that she really gets it from a practical standpoint has been a great help for all of our publishers, salespeople and editors, as well as our Web department. Everyone has benefited and feels much more confident.
Skodzinski: Has your company restructured internally to adapt to a shifting marketplace?
Bobit: Late last year, we made a conscious effort to bring entire brand teams together for information sharing. We utilize a number of centralized support departments, and it's really easy for them to feel like they're not connected. We now have everyone who has anything to do with the brand-print, online, events and support-meet at least quarterly to review market conditions, short-term goals and processes. This has really created a team atmosphere within the organization. Compared to today, life seemed so much easier years ago when we were only publishing print magazines.
Skodzinski: What keeps you awake at night?
Bobit: I sleep a lot better this year than last, but our company is like a family to me and, frankly, I let a lot of day-to-day issues get to me. On top of that, I think about what we can do to be better positioned in a non-print world.
Skodzinski: What helps you sleep?
Bobit: "Seinfeld." I try to watch a rerun before shutting down to help me relax, but I'm now on my third go-around with episodes, so I may have to go back to reading. What really helps me sleep, though, is not having bankers or PE [private equity] guys breathing down my neck. We're fortunate to be closely held and debt-free.