Farm Journal Media: Behind Its Growth in Print, Digital, Events and More
Imagine a story of double-digit print revenue growth in 2010, a mid-recession year which no longer needs further explanation. Then imagine another 21 percent growth in the first 6 months of 2011. Add to that digital growth of 24 percent last year. For Farm Journal Media, this story does not have to be imagined; it's the company's reality.
Farm Journal has been envied for many years for its pioneering work in targeted, versioned print publications for various regional and niche audience segments. According to the company's website, it "was the first magazine to bind its issues electronically [in partnership with RR Donnelley], thus customizing magazines based on readers' crops, livestock, size and region. The May 1984 issue, for example, had 8,896 different versions."
It now has carried that targeting through to its digital efforts. It also has built an extensive television business serving the agricultural market, and expanded its "nice little" events business and continuing education programs into a $5 million growth area. But what CEO Andy Weber is most excited about this year is the company's new nonprofit foundation that aims to raise significant funds to fight world hunger.
Here, Weber, a former executive vice president of Reed Business Information, and a senior vice president with Chilton Co., talks about Farm Journal Media's fast-growing revenue segments, investment areas, challenges, best business decisions and more.
The Revenue Picture
Noelle Skodzinski: What is Farm Journal Media fastest-growing revenue segment?
Andy Weber: Everything is growing fast, even print. Our print grew 23 percent last year, which matched overall company growth, and print will be up another 21 percent this year through 6 months. The fastest growth segment however is digital, which was up 24 percent last year, including a 36 percent increase in our Internet businesses and 16 percent increase in our TV business. Digital will be up about the same or slightly higher than print through 6 months of 2011.
Skodzinski: To what do you attribute that?
Weber: Well, the Ag[griculture] Market was strong in 2010; I estimate the spend was up 7 percent to 8 percent in the market. That said, more than 80 percent of our growth in 2010 came from totally new products, programs and services that we developed organically since 2008. It's our lifeblood. We have an incredibly talented senior management team that works seamlessly as a team in the market. They run their individual businesses extremely well, and are prolific at new product development and line extensions. Their talent has enabled me to get out of day-to-day and focus most of my time on breakout growth activities such as our advocacy platforms.
Skodzinski: What is the company's largest revenue segment?
Weber: Print and digital are about even at between 30 percent (digital) and 35 percent (print).
Skodzinski: Where do you see that figure in two years? Five years?
Weber: We have enough visibility over the next two years to suggest that our print will keep pace with the overall business and will remain about a third of the business. I do see print slowly representing a smaller percentage of our business over the long-haul, but I see our print business continuing to grow measurably in revenue in the foreseeable future. Our print market was cut in half in spending in the last decade, yet we grew our print revenues slightly in that environment. We're obviously experiencing strong growth now.
Skodzinski: What percent of your total revenue is driven by digital (Web, e-newsletters, etc.)?
Weber: Separating TV out of Digital—which is getting harder and harder to do because of convergence—we've budgeted pure Internet to represent nearly 18 percent of our business in 2011. 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?
Weber: Trending the same—probably 23 percent to 24 percent in two years and maybe 35 percent in five years. Acquisitions obviously can change all of the above ratios. For example, we just bought into the largest mobile marketing business in agriculture.
Skodzinski: You have several television broadcast components to your brands, such as "AgDay," which I believe is the nation's longest-running daily syndicated news program focused on agriculture and rural America. How has broadcast contributed to your brands and your bottom line? Is this an area in which you are expanding?
Weber: Actually, AgDay is the second-longest syndicated daily program in all of television, and we bought the weekly "U.S. Farm Report" from Tribune Co. in 2005, which is 35 years old. TV is a fixed-cost business, so the margins can swing wildly. This threw me for a loop 10 years ago when I came to Farm Journal; unlike print, where you can cut cost by book size, etc., we were still committed to producing 312 original shows per year on TV.
TV is one of Farm Journal Media's best stories. It contributes something no other competitor can match—but the cool part of the story is that I was treating this as a totally mature business five years ago; and our TV team proved me wrong and totally reinvented their business. Now we have five shows, producing over 400 original shows per year, and our video capability online is extraordinary.
Skodzinski: You have focused on building a significant database of some 450,000 active agricultural producers. How has this played a role in your business? Is it primarily a lead-generation tool? Or, how do you use it to serve your audience of marketers, and how has it contributed to your bottom line?
Weber: The entire company revolves around this database and how we use it to target our audience with content, advertising and solicitations. As a profit center, our Database Services division has been through a total rebuild. We lost more than half of our business in the first half of the last decade because the business was an opportunistic business built around several large turnkey data management clients. We've now regained most of those revenues with a broader base of products and clients, and it's a nicely profitable business.
Skodzinski: You produce a number of events, including "colleges," such as Farm Journal Wheat College. Can you explain what the "college" events are, as well as what percent of your revenue events contribute? Is this a growth area for you?
Weber: Well, this all sprung from our Corn College—including our new television program "Corn College TV"—which was the brainchild of our head of content development and our staff agronomist who started our own, unique test plots nearly 20 years ago. We began monetizing this by building a facility right in the middle of the plots and then providing continuing agronomic education to farmers. The "colleges" now number 15 events, and we have two different geographical facilities. Events and continuing education are a big growth area. Five or six years ago, it was a nice little business of line extensions for us; now it's a $5 million strategic growth area.
Skodzinski: What are other significant revenue drivers?
Weber: Two things come to mind that are directly related. We have a prolific multimedia content team that works extremely well together, and provides a number of broad and deep content platforms that give us unique offerings in the market. Right now, our industry advocacy programs made possible by this team and our brand strength are some of our biggest revenue drivers.
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?
Weber: Yes, but right now these are immaterial to our business—haven't really caught on in the agricultural market.
Skodzinski: Where is Farm Journal Media investing most heavily?
Skodzinski: Farm Journal Media was a pioneer in versioned magazine production—for example, you had a version for pig farmers, if I'm not mistaken, that would feature some unique content and advertising specifically targeted to that demographic, and another version for dairy farmers, etc. Is this still part of your print model?
Weber: Yes, this and our content are the heartbeats of the Flagship.
Skodzinski: Have you carried this targeted approach over into digital? If so, how?
Weber: Yes, we can serve digital ads to left-handed corn farmers in Nebraska. Seriously, this targeting is fundamental to everything we do at Farm Journal Media.
Skodzinski: Has the way you serve marketers/potential advertisers changed in the past year or two, or is it changing now? If so, how?
Weber: In 2009, we totally blew up our go-to-market strategy and combined three sales forces into one best-of-breed salesforce that represents all of our products. This has dramatically increased our ability to serve clients.
Skodzinski: Where do you see Farm Journal Media's print publications fitting in to the company's long-term strategy?
Weber: While we're building our business around digital, print will always be our brand strength.
Skodzinski: What are the company's biggest challenges?
Weber: We are absolutely wrestling with growing pains and trying to staff quickly while bringing in the right type of people to fit our family.
Skodzinski: Do you think the iPad/tablets are the answer to mobile magazines ... and/or that mobile/digital magazines are the future of the industry?
Weber: Well, tablets may be the answer today in b-to-b—stay tuned, you have to be ready for anything. Ag[griculture] is way behind the curve on this.
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?
Weber: We have fledgling mobile products in the space. AgWeb, for example, is available on mobile, and we're launching apps. It's still real early in the agricultural market because of low penetration of smart phones and tablets; but you have to be ready. Our biggest play so far is the equity investment we just made into Commodity Update LLC—the runaway leader in mobile marketing in agriculture.
Even More Interesting Stuff
Skodzinski: What is something your company did right to survive through difficult economic times?
Weber: Packaged our media effectively, cut all non-revenue producing [expense]. In 2003-2004, we eliminated 30 percent of staff. Those were the dark days.
Skodzinski: What are you most excited about this year?
Weber: Our new nonprofit corporation, The Farm Journal Foundation, which is a 501(c)3 public charity. Our first initiative is Farmers Feeding the World, which we're looking to rally agriculture to ultimately raise $100 million/year in the fight against world hunger.
Skodzinski: What is the best business decision you have made during the past year or two?
Weber: Easy. Realizing a couple of years ago that my senior management team didn't need me screwing up their operations day-to-day, which let me move on to new and bigger opportunities.
One of our mantras is "think a decimal bigger" and that has spread throughout the company.
Skodzinski: Has your company restructured internally to adapt to a shifting marketplace?
Weber: Repeatedly in the past 10 years.
Skodzinski: What keeps you awake at night?
Weber: Growing pains and the unknown.
Skodzinski: What helps you sleep?
Weber: A healthy family and new revenue coming into Farm Journal. I also have been known to have a glass of wine.