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Riches for All Seasons: Rich Data
Pumps Up Publishing Profits and Soaring Multiples |
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16 June 2006 |
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American Business Media has been pushing its "rich data"
concept to B2B media companies for some time, now, but only
a handful of business publishers have undertaken new
initiatives to develop new online data assets to service
their audiences beyond traditional editorial products. Yet
M&A data indicates that the payoff to publishers that
develop these assets is enormous. A recent ABM seminar
showcased the "hows" of successful rich data initiatives.
In a nutshell, the secret is this: listen to your audiences
and find out what you can offer them that will change their
work lives and their relationships with customers and
suppliers - year in and year out. |
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There's a particularly fat and
frisky squirrel that's been bouncing around our back yard
lately. What makes him such a healthy specimen? Nuts. In the
middle of June he's still digging up his bounty from the
previous Autumn, enjoying both immediate pleasures and
hard-earned treasures. Like this squirrel's nuts
rich data products allow B2B media companies to
fatten themselves up by adding premium data-oriented digital
assets to their ad-driven offerings. The climate for ads has
been very favorable in B2B media as of late, but ad revenues
follow business cycles that can change quite rapidly. New
streams of revenues generally don't pop out of the ground in
the middle of chilly markets: you tuck them away while
conditions are still decent.
As seen at today's American Business Media seminar on "The
Rich Data Opportunity" some leading publishers have been
quite busy storing up revenues and deepened relationships with
clients via rich data services during the recent ad-rich
recovery. The payoffs for rich data initiatives can be huge:
Adam Gross, VP of Marketing for media M&A specialists
The Jordan,
Edmiston Group pointed out that recent valuations for B2B
publishers with mature rich data strategies are running at
about 3.5 times revenues and 14-15 times EBITDA earnings -
roughly double that of trade magazines without rich data income
and ahead of straight business information database publishers.
Being able to develop both ad-supported and payment-supported
services is the key to being able to enjoy strong business
today and a meaty cash-out tomorrow.
In spite of these promising returns from rich data offerings
a relative handful of B2B publishers to date have opted to go
the rich data route. Success stories at the seminar
demonstrated that publishers of all sizes and shapes can
develop effective rich media products by focusing on what their
audiences need to succeed in their markets and in their daily
work. But getting to that point doesn't come without some
commitment and expense: the staffs and infrastructures of many
business media companies will require major revamping to
succeed with rich data. Even then, presenters at the seminar
made it clear that only publishers that had a prominent and
trusted position in their market segments were likely to be
trusted enough to have their audiences turn into paying
audiences for high-quality rich data products.
It definitely takes a strong relationship with an audience
to develop rich data products, but there are accelerated paths
to developing them that are evolving as publishers take
advantage of advanced technologies that allow for rapid
deployment of rich data solutions as they learn from the
lessons of already strong efforts. Here are a few of the key
insights that arose from the seminar that are worth bearing in
mind:
- Look carefully at your audience. Then look again.
As much as technology issues may challenge publishers
considering rich data plays many of the real issues seem to
center on how closely and broadly publishers are willing to
look at their potential audiences. The good news: many times
the best rich data plays are relatively simple solutions that
meet specific users' needs with very specific solutions in
ways that can dramatically expand the impact of a
publication. John Ware, SVP and GM of
Reed
Business Information, demonstrated a Web site tool using
their construction data that they license to consumer-oriented
sites wanting quick and general estimates on kitchen
construction projects and a separate tool for those wanting
very detailed estimates. Many solutions for rich data seem to
succeed when they're used to draw the customers and suppliers
of your core audiences closer together in very focused ways
that lead to transactions and better business relationships.
- Look carefully at your markets. Then look again.
Marc Ferrar, President of the Optical Group of
Jobson Medical Information, emphasized that complex
markets with a broad array of suppliers and customers make
for a fertile environment in which to develop rich data
services. As the array of eyeglass frames and manufacturers
exploded in recent years and retail outlets became more
diverse, Jobson saw a fragmented marketplace that was in
great need for online data-driven services to complement
their print publications. They provided value-add data and
graphics such as measurements not supplied by manufacturers
and additional photos that could drive "try them on" display
applications to help consumers make informed choices. In
markets where standards are lacking and there's a
proliferation of players and outlets rich data can help
publishers to create a level of community services that text
publications alone cannot provide.
- Look carefully at your own content. Then look again.
While data basics such as subscriber profiles are useful
assets it takes both an objective audit of your own content
resources and a strong willingness to partner when you're
coming up short to identify the content that's really going
to make a difference. Oftentimes the partners that can help
you the most are looking right at you: your audience.
Anne McMahon, Group Director for
McGraw-Hill Aerospace and Defense outlined how they
partnered with Boeing to develop a portal product that could
be used industry-wide and with consultants to build out
deeper data resources. John Lerner, VP and GM of eMedia for
VNU Business Media, detailed the threat to their
Backstage
weekly theatre trade publication from online upstarts who
were drawing away young audiences. The answer was an online
service where people in the theatre community could post
information, jobs and data-driven profiles that evolved into
an industry-leading 24x7 talent matching service. Leverage
your own assets, yes, but first and foremost service your
audience.
The phrase "rich data" may not resonate strongly with some
publishers but for those willing to take the plunge the
all-season riches that they enjoy speak for themselves. It's
really not about data, after all, but about services that make
a tangible difference to audiences' lives and that provide
valuable new contexts for core editorial assets. For an
industry whose fair-weather prospects are already dimming it's
time to think about chubby little squirrels and how much fun
they have come June - if they stowed away their riches in time.
-
John Blossom
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