Hal Espo, President of Contextual Connections, LLC interviews Glenn S. Goldberg, President Information & Media, The McGraw-Hill Companies. McGraw-Hill has a global footprint in which it delivers both traditional media and enterprise information products. "Content really matters," Notes Goldberg, looking at the energy markets Platt's is doing very well as an example, also helping OEMs build their network in China.

Espo: Content matters more in some markets and less in others. What does McGraw-Hill do to stay ahead?
Goldberg: B2B is key, construction marketplace is a good example, trading and energy also, people make big bets. B2C is more dubious, but in BWeek, traffic has returned to trusted brands.
Espo: Tell us about recent content investments.
Goldberg: Organized around principles, made the McGraw-Hill Construction Network, not just about advertising but also about solutions, not all efforts succeed. Need to understand how leverageable your brand is in specific spaces. We get some plaudits, but the customers need to respond, some customers are slow to pick up in some sectors.
Espo: Layered applications, how do you see content and technology interplay?
Goldberg: Believe deeply in it, but we're not there yet, some do wonderful things around code, still suspicion around motives. Most startups challenge large companies to think different about customers, then they hit a ceiling and look away. There are demarcations that need to be broken down in our own company to be as nimble.
Espo: Tell us about JD Power
Goldberg: Syndicated model focused on customer satisfaction, well-known by auto marketers, helped Toyota get into the marketplace. Were getting paid for surveys and access to surveys, saw that they were missing underlying value, went further in their research into other corporate roles, took a generation or two to move up the value chain. Sweets can now sell lead generation and other extensions of the core value proposition.
Espo: Is the overall strategy a portfolio play?
Goldberg: JD Power is a marketing services company, in autos but also in financial services. We view industries that have benchmarks and standards that can be embedded in the workflow of customers. Each of our properties are the standard in their industry in their own ways. Platt's is the benchmark in oil prices, construction - those are the standards that we look at, don't want to be all things to all people.
Espo: McGraw-Hill purchased Umbria, what does it do so extend the brand?
Goldberg: PhD/Math guys, every year we do syndicated studies, get paid a nice fee to sell studies, but in Web 2.0 once-a-year studies aren't going to cut it. They scrape the web for information on products and brands, can pull comments about brands, e.g. Honda is launching a new Accord, organize in "tribes"/market segmentation, can organize it in ways as to who's saying what by demographics, can complement once-a-year reports.
Espo: Web 2.0, in customer 3.0 model customers are going to dictate model. Shopzilla, Pricegrabber, etc.?
Goldberg: Good point, if you're building a billion-dollar brand, you'll need more than Shopzilla. People still care about quality information, quality content. It's a balance, don't turn our cheek to Shopzilla, but there are other angles.
Espo: Platt's - tell us about this.
Goldberg: 60 percent of revenues are from out of U.S., our oil prices are the industry benchmark. Hard not to see that with globalization trading in commodities is going to be the future. In industries where there's a benchmark, we do it well.
Espo: New energy sources, is that's where Platt's headed?
Goldberg: If it's commodity-related, that's where Platt's is headed.
Espo: What do you think about the new administration's impact on Platt's?
Goldberg: Hopefully they will get the economy in better shape, that will help Platt's, but "shovel-ready" projects will help construction, bailouts of Detriot OEMs will help, investment in education will help.
Espo: What role do ads play.
Goldberg: In aviation and construction it was all advertising, much more broad-based. Major constraint is not hurting brands. Trust is built up in aviation for initiatives for conferences, for example, but you need to be respectful for brand.
Espo: BizWeek, forecast?
Goldberg: Slower years recently, news is commoditized but content matters. We serve a business news audience, last 4-5 months traffic is better, the editorial model needs to evolve, need to create content as they always have, but will also curate content, not just a gatherer and interpreter of news and creating communities. Another way to think about content, helps editorial and helps advertisers, since advertisers want to see their ads in context.
Espo: Television, let's overlay print with TV changes, insufficiently local, what makes it different?
Goldberg: Needs to change as well, hard to envision the longer-term, but people are still going to it in some demographics, kids still put on ESPN, it's not about the medium, it's about the value proposition. When an avalance occurs people still turn to the television. The challenge is to respond to both localization and broader markets. TV still has a longer role to play in markets, but the balance is still to be figured out.
Espo: People turned to CNN.com, not television, for the revent airplane crash landing.
Goldberg: Some of our Web sites have more traffic than local Web sites. The economic model is a balance. We're not an enormous media player, being smaller gives us the opportunity to figure out.
Espo: You're a senior officer in a well-known company. What are the major challenges that you and your peers face?
Goldberg: Sounds trite, but the reality is we have people who really understand what the custoemr needs, I think that I have the right people to solve the next 25 years, but the barriers between content and technology people are hard to break down. Can you get it done, can you keep things simple and communicate with your audience and give them a stake in the future.
Espo: "Digital Immigrants" in our generation, what do you see in the digital native generation that makes you worry?
Goldberg: If my kids who have mid-terms today don't do well as they were multitasking the night before...democratization is a wonderful thing, they're curious, do things on Google immediately that are remarkable. The world truly is borderless now, great for business, thinking about where to place bets. Our kids need to build relationships, devices will be different, but they still need to conduct themselves holistically to be better people down the road.

Standard & Poor's role is under question now, need to evolve steps to transparency, welcome the opportunity to take uncertainty out of the marketplace, will work with regulators to make that happen.

Question: In efforts to trim costs, in a large public company what are the risks that you'll over-react and discover that you should have been more selective?

Goldberg: That's the reality, Platt's is doing very well, large Washington presence, regulatory presence, in business we've made a decision to downsize Washington a bit and deploy elsewhere, it's no longer the only very important place. New tools also allow people to deliver services more quickly. We can use third parties to cover less newsworthy hearing and events. Many of the Platt's investments were done three to four years ago, have to make tough calls sometimes.

Question: Old model was collecting information and selling by the pound, tell us about applications.

Goldberg: Example I use in contruction is forecasting, if you're about to bid on a major job, Autodesk will use our applications to help them to see what's different in a building design with different materials. Take some time, but we're getting there as investments mature.

Espo: Innovation is everywhere, right or wrong, there's a perception that McGraw-Hill is slow, doesn't get it. How do you respond to that?

Goldberg: The reality is that we've done as good a job as we can to be on the cutting edge. (COMMENT: Big problem at McGraw-Hill is culture, I.T. is very traditionally oriented, internally oriented, sales teams have their own resistance also. Heritage does matter, but in some divisions walls do need to be broken down. Heritage isn't always about the past, but about how you apply its lessons to new challenges.)

Great interview, Hal!

Labels: events, SIIA Information Industry Summit 2009