New Business (to Business) Models
The same technological changes that have upended publishing business models are providing new avenues for growth. Just ask B-to-B companies, poised to use big data, short-run printing, automated content creation, innovative product development and sophisticated list services to create new revenue. To hear some in the industry talk, there may never have been a better time for creating and implementing game-changing ideas than right now; yet, for the three publishers queried by Publishing Executive, it all comes down to variations on a very old theme: building relationships.
Connecting the Dots
Earl Heard became a publisher almost by accident. A trainer and human resources executive for the oil industry, Heard decided to break out on his own in the early 1980s, and noticed early on there was no publication reaching the audience he sought: human resources decision-makers across multiple industries in the oil and gas business.
"In the energy sector all the big publications have vertical magazines—one for drilling, one for pipelines, marine, terminals, etc.," Heard says. "We came out with one that was horizontal."
What started as a newsletter would grow into a profitable magazine and company, BIC Alliance, and Heard eventually abandoned the training business to become a full-time publisher. His business acumen and knowledge of the Gulf Coast oil industry led him to try some unorthodox ideas for creating revenue, such as selling the cover of the magazine to sponsors.
"People said it would not work," he says, "but I said if the content is strong enough on the inside people don't care, especially if it's a trade publication."
In addition to selling covers, BIC Alliance now has 350 clients using the magazine as a third-party newsletter, marketing partners who use the publication multiple times a year for campaigns. The upshot? "We are probably the most profitable small trade publication in America," Heard surmises.
With BIC Magazine as the foundation, Heard has built an interesting business model. After one advertiser came to him asking for help finding a salesperson, he decided to launch a recruitment arm; BIC now employs four full-time recruiters leveraging the company's extensive contacts in the energy sector to match prospects with employers. In the 1990s, BIC got into a whole new level of "recruitment": helping clients looking to buy or sell companies. Investment banking is now one of three key elements (publishing and recruiting are the others) of what Heard considers a kind of synergistic golden triangle.
"[One] leg is magazines and books to help publicize and build relationships. [The second is] recruiting marketing and salespeople, who can buy ads, and C-level people, because they can buy companies. The third leg is investment banking," Heard says.
In recent years, BIC Alliance has moved into books. Examples include a collection of company profiles, "Energy Entrepreneurs," for which it sold custom covers; "Louisiana Sports Legends and Heroes," profiling athletic and philanthropic achievement, which sold ad space in the back ("People said if you offer sponsorships in the back of the book you will never get it into bookstores. That is a myth," Heard says); and books collecting material appearing over the years in BIC Magazine. "I don't make a lot of money publishing books," Heard says, "but it leads to other business."
New Ways To Serve
While not every B-to-B publisher could travel this route, BIC Alliance demonstrates the power of outside-the-box thinking for publishers able to leverage an intimate knowledge of the industries and people they serve. Audiences, in turn, look to publishers help them make new connections, create new business and expand their insight. "In B-to-B, the purpose of publishing should be to give decision-makers what they need, not just feed them content that they believe they could generate themselves in a few seconds on Google," Tim Baskerville, director at HG Data Company, told SIPAlert Daily last year.
Baskerville believes B-to-B publishers have been shortsighted in seeing new technology mainly as a means to improve distribution and marketing. "Strategically," he says, "the bigger shift that is emerging is using technology to generate the content itself. … By mashing up cutting-edge analytics with terabytes of unstructured data, it's often possible to create at relatively low cost the proprietary, valuable content that can help B-to-B decision-makers."
Baskerville is bullish about data. "Personally, I'm … excited by taking a publisher's domain expertise, combining it with structured data, and building a major revenue stream," he says. "That's the hottest area for us right now at HG Data. We're partnering with B-to-B publishers to produce augmented leads as an extension of the publisher's lead-gen programs."
In other words, sales leads generated via a publisher's own content can be "enhanced" by information from HG Data, allowing the publisher to charge a premium for it. This enhanced information can include the category of company connected to a lead, revenue levels, locations and hardware or software utilized—all valuable additions to what is already deemed a highly relevant contact.
HG Data customers are a "mixed bag" depending on the product, Baskerville says. "For a tablet app that contains a limited amount of genuinely new content, most likely the customer is the advertiser who sees the program as a natural extension of the existing advertising relationship," he says. "But if there's a major investment in new content, such as with a line extension containing a significant amount of custom information, then it's quite likely this will be a paid medium and the end-user will pay the bill."
B-to-B publishers should never assume users will pay for "nice to have" content. Strive for "must have" information, Baskerville says, citing Bloomberg as an example of a publisher business model built on paid subscriptions. "Make sure the product justifies the fees you'll need to extract from the marketplace."
Fort Atkinson, Wis.-based Cygnus Business Media, a publisher in the aviation, building & construction, public safety, security and agriculture verticals, is also making hay with data. "If you've got the data and are able to focus the data on a sale and connect [it] with everything else [you offer] there are a whole series of ancillary products you can sell around that," notes Raymond L. Bianchi, vice president and group show director of Cygnus' Agriculture, Transportation & Technology group.
Events have become a major driver of business at Cygnus, and the company has refined its process for deciding how and when to build out new shows.
"We have a 12-step program," Bianchi says. "We look at our portfolio, the event market and a couple of different matrices to decide whether to build and launch a live event and what type of event it will be, using data but also using a set [development] program."
A recent event launched in the agriculture space, IDEAg Interactivity, focusing on how the Internet is transforming agriculture, was developed after market research zeroed in on the target audience's main concerns. Surveys were conducted and an advisory board convened. "As we go through each of these steps there are fail-safes and tests to test the efficacy of the idea," Bianchi says. "When you get to the point of launch you've already really run it through the gauntlet—so you don't discover six weeks later, 'I've really made a huge mistake here.'"
Some of this process is proprietary, but Bianchi says the fail-safes are built around close contact with different communities of interest within industries, including sponsors and "major attendee types" identified by the publisher representing new audiences. "People who might be interested on the periphery but who are not currently a customer of your magazine or website," he says. "You want to ask pointed questions to each of those communities and use those pointed questions to determine whether your concept is the right concept. It's kind of like laying on a table a series of Venn diagrams and then, where the communities come together and there's an overlap—there is your event."
In planning the interactivity conference, Cygnus at first thought understanding technology was what its target audience cared about. After careful research and consultation, however, it found that the technology itself was not the problem, it was how to connect technologies and stakeholders to better function in the global food supply chain.
Whether in the B-to-B or consumer space, media companies that are really growing are becoming community focused, Bianchi says. Smart companies are developing targeted products based on a thorough understanding of these discrete communities.
"If you have good data and can ask good questions of the right demographic, then you have your attendee list," he notes. "You can take your data and lay it against the questions you've asked and the interviews you've done. If the community is there, you can use that data to invite that community to your live event, then go to a sponsor and say, 'I have 300 people who really care about this type of product, do you want to sponsor that?' They are going to say yes because its like shooting fish in a barrel for them."
"People like to be around other people like themselves," he adds. "It gives advantage to your career in a B-to-B environment. "Fifteen years ago I was getting Trade Show Week and read it cover to cover. Now I'm looking for that info on the Internet. But what can't be done on the Internet is walking across the room and walking up to a president of a company and shaking their hand and talking for five minutes." PE