Northstar CEO 'Tired of Apologizing' for Print Success
Tom Kemp signed on as CEO of b-to-b travel media company Northstar Travel Media in January 2009, one of the most trying times in most publishing company's history. "It was a tough time to start," says Kemp, a former private equity executive for Veronis Suhler Stevenson who got his start in publishing at Miller Freeman and Penton Media. But the company's low debt-to-revenue ratio and several rapidly growing new business initiatives—including webinars and a new $1-million marketing solutions division—have been steering the company through a period of growth.
Despite the new areas of growth, however, print comprises 60 percent of the company's media, and, as Kemp says, "[It] has a long-term part in our future," adding, "I ... get a little tired of apologizing that print is still a significant part of our business."
What's most important, though, he believes, is having strong brands that come to life in a variety of ways. Northstar's 10 brands (including 7 print publications-such as Travel Weekly, Meetings & Conventions, and TravelAge West—and several digital brands, such as Meeting News, OfficialCruiseGuide.com, and M&C Facilities Search) have stood the test of time and continue to serve as a foundation for expansion into new areas for serving the company's customers.
Here, Kemp shares details behind Northstar Travel Media's biggest growth areas, strategies for the future, company sales team structure and why digital specialists are important, and more.
The Revenue Picture
Noelle Skodzinski: What is Northstar Travel Media's fastest-growing revenue segment?
Tom Kemp: This year and last year, it was our face-to-face events business. Prior to my joining Northstar, we never really had much in the way of trade shows and conferences. And over the last year and half, we bought one small trade show business. But we've [recently] launched a number of events, and we now have about 20 to 25 events, almost all of which were organically built, leveraging off our brands and market position, and it's going to grow 100 percent this year compared to last year (from a relatively small base). But it's now become a meaningful part—about 10 percent—of our business, from 1 percent to 2 percent two years ago.
Skodzinski: What is the company's largest revenue segment?
Kemp: Our print business. Print continues to be a very important part of our business. Overall, it's a little less than 60 percent of our revenue.
Skodzinski: How does that compare to the past few years?
Kemp: Well, over the past couple of years, we've added a couple acquisitions. Overall, print, as a percentage of total revenues, has declined, but I really get a little tired of apologizing that print is still a significant part of our business, simply because our print business has held up relatively well. It clearly has been down the last couple of years, but not as dramatically as a lot of print products. And, in fact, I get a little annoyed that people make a virtue out of the fact that print is such a small part of their overall business by way of the fact that it's declined so dramatically over the last couple of years.
Our print business is actually pretty healthy. It's not growing—this year is about flat compared to last year, and was down a bit last year (low single digits) ... but it's not in terminal decline, and frankly we're relatively bullish on print and the markets we serve. But clearly the fastest-growing parts of our business are not print.
Skodzinski: Where do you see that figure in two years? Five years?
Kemp: Right now, our digital business is about 20 percent. I mentioned before that our face-to-face event business is about 10 percent, and our subscription information business is about 10 percent. And a little less than 60 percent is print. ... Because digital and face-to-face and subscriptions are growing, I would guess that in two years our print business is probably going to be around 35 to 40 percent ... and I would say that digital will probably be at least 25, and 15-20 [percent] would be face to face, and another 10 to 15 percent would be information subscriptions—depending how quickly things move.
Skodzinski: What does your paid subscription information business include?
Kemp: We have products on destination reports, professional hotel reviews, travel alerts, and this is information that is paid for by subscribers, in most cases travel agents who want access to this data. They may have clients interested in going to Ireland, or specifically Dublin, for example, and you can put together reports from our data.
Skodzinski: Many of your brands have significant digital components. For example, Travel Weekly recently launched "World of Luxury Online," a resource for agents of high-end travel packages. The big question for many publishers is how to grow digital revenue. To what degree have marketers in your industry adopted online marketing?
Kemp: I think, generally, our industry is probably pretty consistent with a lot of other large industries. Global travel industries, our major suppliers are hotels and resorts, airlines, tour operators, cruise lines, these are major consumer facing businesses ... and e-commerce is very important to them, so they're relatively sophisticated.
Our average brands still like print advertising. You still see a lot of advertising in print, in magazines and newspapers, and on television for hotels and resorts and cruise lines. But they've certainly adopted [digital], and I think an important part of any of our clients' market programs [is] digital information delivery.
What we're doing is trying to advance beyond traditional website advertising to have much more customized programs, educational platforms, so this is part of our whole marketing solutions initiative that you had asked me about [before this interview].
Skodzinski: Can you explain some examples of this?
Kemp: [For example,] we're doing virtual events that are on a proprietary platform that are much more engaging and educational in nature, ... deliver high-quality information to our users, ... as well as lead-generation products to our sponsors and advertisers.
We are doing a lot of webinars. We did one today on Mexico romance travel ... and we had over 1,000 travel agents on [it].
But we aren't doing a lot of the more traditional virtual events ... that try to imitate terrestrial trade shows.
The fastest-growing part of our digital business is in customized, proprietary, information lead-generation programs. We worked with an outside supplier on developing this platform, and it has a lot of interactive components, video, a lot of information delivered interactively with our sponsors. There's a live portion and then an archived portion.
We had one where we worked with the Tourism Board of Ireland, and they got a lot of their members to participate. [We featured] different parts of Ireland, with video and information.
And we're also doing a lot of educational platforms where we're teaching travel agents and travel suppliers about different regions and destinations, so they can be much more up to date when working with their clients.
We have a whole series ... and we have one specifically on Ireland Castles, one on golf, one on discover Northern Ireland, another one on Irish festivals, heritage and culture. So these are all specific events that we have that are live and then archived.
We have events—M&C Interact, for instance, that is an integrated digital [virtual] and hosted buyer face-to-face event. ... So we sell sponsorships to a destination, it could be for Phoenix [Convention and Visitors' Bureau], and sell them both a virtual event booth and as well as hosted-buyers sponsorship (in-person).
Skodzinski: Are most of your webinar/event programs sponsored or also paid for by attendees?
Kemp: They're all sponsored at this point. We've looked at a few media companies who are doing some paid-for webinars, and we've thought about it ... but generally all of our webinars and our online events are sponsored.
Skodzinski: How important have digital components been to your bottom line?
Kemp: It's a very fast-growing, double-digital growth part of our business. and strategically I think it's very important, as well as financially.
And potentially, you don't have some of the built-in costs factors that we do on the print side of our business with printing, paper and postage, but there's still a lot of investment in technology, infrastructure, product development ... and I spend a lot of my time worrying about finding new software developers. Twenty years ago we never worried about that; we looked for guys in the back office who were messing around with our computers. Now they're strategically a very important part of our business.
Skodzinski: How is your internal sales structure set up? Do you use one sales team for both print, events and digital products?
Kemp: For our trade shows, we have, for the most part, separate people who are responsible for selling trade show booths. But generally, ... we're organized by brands, and our salespeople are responsible for selling integrated marketing programs to our clients.
But we do have digital product specialists who work with our brand teams and the publishers and salespeople ... who can go out and present specific digital programs, who have a higher degree of familiarity and technology expertise.
So the salespeople, we see as primarily relationship managers and work as strategic partners with our clients, and then we'll have digital product specialists who can come in on specific proposals and can work very closely and directly in a sales capacity ... with our salespeople. So the salespeople are still responsible overall. But we have a lot of salespeople who've been around a long time; they aren't all as familiar with the digital products as we'd like them to be, so we try to supplement them with digital specialists.
Skodzinski: You also publish a daily e-newsletter for the meeting industry, called Meeting News. What has the primary role and benefit of this been?
Kemp: Meeting News has been around as a brand for at least 30 years. When we bought the Nielsen Travel Group last year, it came along with it. But we have Successful Meetings, Meetings & Conventions, and we have three print publications serving the meetings industry. And Meeting News was supposedly a news center, but it was published once a month at best, and we decided that was kind of ridiculous to try to be a news publication on a monthly print basis. So we converted it to a daily, online news and information site, and it comes out as a daily newsletter.
It's aggregation of all news, every day, that comes out on the meeting industry, and it has about 100,000 subscribers to it. It's doing extremely well, and we have great sponsorship for it. ... It's generating direct revenue for us and is also a great driver of traffic to our meetings websites.
Skodzinski: What are other significant revenue drivers?
Kemp: The one thing we haven't talked [much] about yet is our marketing solutions, and I think what's different about that as opposed to other branded online products [is that the marketing solutions initiative] is really customized for our clients that leverages our ... databases, our content and our relationships to have a broader relationship with our clients beyond traditional marketing and advertising.
The kind of things we're doing ... are things like educational platforms that are branded through the client [where you wouldn't necessarily see even the Northstar logo at all].. ... It could be a destination, cruise line or hotel and resort—all branded for their benefit.
We're doing loyalty programs, frequent traveler programs, redesigning websites for our clients—things we haven't traditionally done.
The key here isn't to move dollars from advertising to custom programs, but to have a deeper relationship with our clients and to have a stronger financial relationship with our clients in areas where they're growing, generally below-the-line marketing, developing sales promotion programs, e-commerce programs for them, and frankly tapping into budgets that we hadn't previously had access to.
This is an area where research by companies such as Outsell have demonstrated how much money is being invested into direct sales programs. These are dollars that will be taken away from traditional advertising and marketing.
It's still early; we launched the marketing solutions business late last year/early this year, and we've sold about $1 million in business this year so far, so we are optimistic that it will be a brand-new kind of a stand-alone operation.
Skodzinski: Where is Northstar Travel Media investing most heavily?
Kemp: Definitely our digital products. ... With digital, you constantly have to be developing new things and updating. If you have same website you had a few years ago, you aren't taking advantage of the new tools out there.
Skodzinski: Where do you see Northstar's print publications fitting in to the company's long-term strategy?
Kemp: I think that what's important to us is that these are brands ... that come to life in a variety of ways—print, digital, face-to-face. And, as far as we can see, print has a long-term part in our future.
Skodzinski: What are the company's biggest challenges?
Kemp: Continuing to invest in the future, to develop new products that create excitement among our customers, and to continue to be a valuable resource.
Skodzinski: Have you launched products in the mobile space?
Kemp: We have some mobile apps, specifically for our meetings area, and have some sponsorships around that.
Even More Interesting Stuff
Skodzinski What are you most excited about this year?
Kemp: The growth of our face-to-face and digital products, and new marketing solutions initiative.
Skodzinski: What keeps you awake at night?
Kemp: A major disruption to the global economy over which I have no control. And in the last decade, we've seen too many of these.
Skodzinski: What helps you sleep?
Kemp: The fact that our company has a very strong balance sheet and very little debt. Two-thousand-nine was a tough year, but unlike a lot of other companies, we didn't suffer the major reorganizations and bankruptcies. Not having a lot of debt compared to our revenue helps me sleep.