The ROI Experts
Needham, Mass.-based TechTarget bills itself as “The IT Media ROI Experts,” and return on investment is certainly what both IT professionals and vendors are looking for from products featured online. With potentially millions of dollars at stake in a major hardware purchase, companies seek the highest-quality information targeted to their specific needs and business strategies. TechTarget has built its reputation—and ever-expanding share of the media market for IT research and peer support—on providing precisely that.
Founded in September 1999, the company has grown to 474 employees, and it generated revenues of $79 million in 2006. With the acquisition last June of TechnologyGuide.com Inc. and Ajaxian Inc., followed, in November, by the purchase of KnowledgeStorm Inc., TechTarget now runs 46 Web sites, drawing 6 million active, registered members, and two print magazines.
Eclipsing even these benchmarks was the company’s transition from private to public in May 2007, making TechTarget the only Web-based publisher to go public last year and, according to company CEO and Co-founder Greg Strakosch, the only online business-to-business media company to go public in the last eight years.
Strakosch chalks TechTarget’s success up to an ability to recognize and capitalize on important trends in online usage. “The main shift that has fueled the growth of our business is that every major purchase is researched on the Web,” he notes. “Whether bought online or bought offline, the audience has shifted to the Web, and the ad dollars have followed the audience, and that’s been very disruptive to the traditional media companies.”
Put simply, according to Strakosch, TechTarget’s success has been built on three major market opportunities: a migration of IT professionals from print to online media, the use of the Web for highly targeted product research, and the desire of advertisers and vendors to have quantifiable results and multiple points of access to potential customers.
Content Mirroring Needs
As far as its approach to targeted content, TechTarget takes the overall IT market and carves it up into categories reflecting real workplace divisions and specializations. “If you look at how IT is organized in mid-sized and larger companies, it’s usually divided up into some standard pillars: servers, storage, applications, application development, security and so on,” explains Mark Schlack, vice president of editorial operations. “We have groups of sites that address all of the major pillars. Within each group, we try to address either different groups of IT people or different technologies used by that IT discipline. That might take the form of a separate site, or newsletter, or just a section of a site.”
Such categories also align with the way IT professionals do research, Strakosch points out.
“One of the things going on in the media space right now is people want very specific, targeted information,” he says. “We have very in-depth content online for people doing in-depth research.”
The needs of IT professionals have changed in recent years, Schlack says. There is less comparing among products being done and more desire for interpretive and analytic information.
“Specs you can get from vendor Web sites,” he notes. “For all IT professionals, the biggest issue is, what’s the future of this technology? No one wants to spend a couple of million dollars on something that’s going to be obsolete in a year.”
IT users want answers to a lot of other questions as well, Schlack notes: What do these products really do? How do they work with other products in my environment? What has been my peers’ experience with them? If I buy them, what are the operational issues?
To fill these needs, TechTarget has positioned itself as the No. 1 purveyor on the Web of independent, peer-to-peer and vendor contacts, according to Strakosch. It is also the largest distributor of white papers in the IT market, and the largest producer of podcasts and webcasts. “In this very targeted arena … if you’re researching which product to buy, every type of information you would want about every major technology product is all on the same Web site.”
Strakosch says advertisers aim to reach audiences during each of the three “stages” of the purchasing process: the pre-research stage of keeping up with industry news and trends; the active part of the research process, when people are on the Web with a specific goal in mind; and the face-to-face contact/product-demonstration stage, where purchasers have already made a short list and are deciding which among similar products best fits their needs.
“The most important part of the purchasing process is the research they are doing on the Web, because that’s when they’re narrowing down from 50 potential vendors to three,” Strakosch notes. “As a vendor, you need to get to that final list of three vendors, or you’re not going to win the business. That’s where we invest most of our resources, and that’s why all the ad dollars are switching from traditional media to online media, where people can do very targeted, very efficient campaigns and reach, in our case, IT professionals who are actively researching which product to buy.”
To find proof of this model’s success, one can simply look at the company’s top-tier advertising client base, which includes names like Microsoft, Dell, Red Hat, Sun, Oracle and Google.
Another gauge for success—page views and click-throughs—Schlack says, are important, but don’t tell you everything. “We do surveys of our readership to understand what topics they are most interested in, and, beyond that, we do a lot of surveys to understand what they’re actually doing in IT and why,” he says. “… Anyone can come to a Web site. We try to understand: Who’s coming? Is it our intended audience … or is our content somehow missing the mark with the right people?”
Relationship Building: An Eventful Proposition
Along with reader surveys, events offer an unparalleled opportunity to learn about the audience, Schlack says.
As opportunities for vendors and subscribers to come together, invitation-only conferences are seen by TechTarget as more than just a way to round out a portfolio of revenue-generating platforms; they are recognized as an integral part of a vendor’s relationship-building strategy and, therefore, given equal weight within the online/print/in-person formula.
“We have a very profitable event business, and the key part of the profitability there is that the audience from our Web sites are the people who attend our conferences,” Strakosch says. “In the conference business, audience acquisition is [normally] a major expense item, but for us it’s not because we have 6 million registered members [on our sites].”
TechTarget’s member list is derived from those who register for a conference or as a reader of one of the company’s vertical Web sites. The company asks each member about their specific interests and uses that information to target select invitees, who attend conferences for free. (The company also offers list rentals to vendors.)
For vendors, events offer the opportunity to understand their clientele and close on sales.
“We divide events in half, with one side of the house crackerjack at logistics, and the editorial side taking responsibility on the content front,” says Schlack.