Cover Story: The Search for Profitable Publishing
"One of best case studies I have ever heard about … was when Hanley Wood partnered with Meredith—and again, this is on a big scale, but you can use the same tenets no matter what your size is," she says. "Hanley Wood said, 'We're the top b-to-b, home-builder trade publisher in the U.S. We talk about designing or building homes. Meredith talks about making a house a home.' So they partnered on a year-long project that I think had a print component, some kind of face-to-face event, and online. … They both were able to capture share of market in dollars that they wouldn't have been able to individually."
While pursuing new revenue sources to offset ad-revenue declines is one thing, Sabatier believes, "Diversification makes sense in a good economy, not just a bad economy. Because advertising is volatile, you're trying to minimize and spread your risk. This has been talked about for many years within b-to-b and consumer publishing. I think the climate is forcing the question to the top; it's not a choice anymore."
But diversification isn't something just to jump into head-first, sans strategy. First, Sabatier suggests, officially assess product opportunities and overall business performance. "'Official' doesn't have to be an outside consultant, but it needs to be a process you're committed to methodically, every year to 2 years. If you don't assess, you end up doing 'tactics' … [that] end up not tying to things, and you're not leveraging the company as a whole," Sabatier explains.
Before companies diversify, she suggests they ask themselves, "Diversify into what?"
Think about innovation as a process, "breaking outside the norm—whether … you go to people you normally wouldn't talk to, or talking to customers in a different way," she notes.
She cautions that diversification can mean something different to every business. "[It] can … mean … maybe your other revenue stream is data; it doesn't have to always be charging for content or [launching] an event. It may look very different based on what's going on in your niche."