When I arrived at the the ABM Digital Velocity event Tom Cintorino, SVP for Digital Media for PennWell Corporation was chairing a panel on revenues at the ABM Digital Velocity conference, which focused on how to drive revenues in the digital era. The key factor that struck me in listening to this panel was that the margins found in online B2B media - approaching 85 percent in some instances - are becoming a very attractive incentive for publishers to sell online ads and services far more aggressively.
Yet while Tom put out a hypothetical 1/3-1/3-1/3 ideal for a current revenue mix between print, digital and events few in the audience raised their hands to say that they were anywhere near that mix today. So although publishers are moving rapidly to push online revenues and starting to combine print and online sales forces aggressively the traditional dominance and allure of print for B2B publishers has hardly disappeared.
Yet I heard a lot of hopeful trends from the panelists and people in the audience which indicate just how much velocity towards digital services is entering B2B trade publishing:
- One publisher talked about how they were in an interesting quandary - they had to change their sales incentives plan for selling print advertising because the sales force was focusing so much on online sales. It may be kind of ironic to be having to subsidize flagship print titles to keep sales foces interested in them but it's really about leaving no money on the table - publishers can't afford to have advertisers say "Well, you're our online strategy, we'll use your competitor for ptint." That leaves to big a door open for competitors to expand from their print base into online sales later. So print will be a decreasing revenue stream but one which publishers simply don't want to let go of as a strategic investment for some time to come.
- One person in the audience noted how in construction services print titles are still very important to architects who still need and appreciate the high quality of graphic presentation that print affords them - and that appeals to their clients. However, when it comes to finding suppliers and solving specific problems in their trade they go online aggressively. So even where print services the lifestyles of specific audiences in specific modes, online is the focus for advertising and marketing that captureds people in a mode that advertisers will value highly - and that provide concrete and detailed metrics of campaign performance.
- Sales lead generation is becoming a key strategy for B2B publishers, so much so that one panelist noted that that sometimes they will have to tell potential clients that their ad campaigns really won't work on their platforms. The good news for those marketers though is that the ability of online B2B publishing to return great sales leads is proven and strong - a campaign that returns 300 leads for high-end B2B products may result in around ten percent of these suspects being converted into prospects.
- Converting print sales forces can be challenging: looking at the third-third-third revenue mix suggested by Tom is also a roadmap as to how many in traditional sales forces might not be able to make the leap to online sales. But publishers were offering stories of veteran salespeople who they thought would never be able to make the leap into online sales working off of laptops on wireless connections doing online presentations. Thinking of many of the great veterans from the early days of financial trading technologies who had to make the leap from "ticker" sales to sophisticated system sales it's a hard transition to manage for many. But in industries where relationships are built up over many years these transitions may be needed at times to ensure stability at major accounts while still enabling more online sales. Nevertheless, one of the major pain points for publishers is to realize that they are not in business to keep a sales force but to solve their clients' needs.
- This panel highlighted that one of the problems in making the transition to online sales is to recognize that it's no longer a brand sale as much as it is a product sale. Marketers are looking for vehicles that produce results: it's no longer as ephemeral as the appeal of a print title that is based on many intangibles and relatively few advantages in the product platform itself. This is very hard for publishers raised on the mystique of print brands to accept. The product is now not just what's on the editorial side of the wall.
- This need for looking at publications as products was highlighted also in the next panel on new technologies, where eMedia consultant Mitch Rouda highlighted the need for traditional publishers to embrace a concept that's familiar to many other industies and still somewhat foreign to them: product management. Who is to fulfill that role today in publishing? Editors to some degree, perhaps, but whatever the solution the "throw it over the wall" solution to technology hasn't worked for digital native publications for a long time and print publications are struggling on this cultural divide.
- A B2B and Media Business indicated that investment in print for B2B publishers was expected to decrease for 45 percent of respondents in the 2008-2009 time frame, with just a handful expecting an increase. A marketer's panel pointed out that this isn't automatically mean that marketers are getting what they want for online: they're less interested in CPM and other online concepts than they are in lead generation. Increases in online investment, though, are still fairly conservative according to the B2B survey, with increases of 10 percent expected. Granted that's a good chunk, but with the open-ended investments being pursued by private equity players in online-only publishing one wonders if it's really going to make enough.
The gaps are closing between what B2B publishers need to do and what they are actually doing to build stronger revenues from online media. But it's safe to say that many publishers have a legacy of old methods and outlooks that are still having a hard time making the transition to a more client-oriented and market-oriented approach to publishing product developmtn. In the final panel of the day the questoin was raised about how marketers could place an industrial video in an online publication and provide a new form of content and community just didn't register with this crowd. The discussion shifted rather rapidly to how to manage print sales.
I am more hopeful than ever that major publishers will be able to thrive through this transition but the small to medium portfolios of trade magazines who may have a harder time reinventing sales, technology, events management and editorial staffs all at once are certainly at risk in this transition. Here's hoping everyone gets their digital velocity souped up as soon as possible. You may have "ink in your blood" but it's time to start breathing the same air that your marketing and advertising clients need to breathe.
Labels: ABM, B2b media, Digital Velocity, events, revenues
