|Title:||United States annual business-to-business advertising expenditures and compound annual growth rate by advertising medium in dollars and percentages for 2009 to 2011, and annual forecast for 2012 to 2014|
Start of full article - but without data
THE B-TO-B SPEND
Dollars are continuing to shift away from traditional media to
($ millions) 2009 2010 2011 2012 2013 2014
BXB Magazines X,XXX X,XXX X,XXX X,XXX X,XXX X,XXX
Trade Shows & Exhibitions XX,XXX XX,XXX XX,XXX XX,XXX XX,XXX XX,XXX
Interactive Marketing XX,XXX XX,XXX XX,XXX XX,XXX XX,XXX XX,XXX
($ millions) CAGR
BXB Magazines -X%
Trade Shows & Exhibitions X%
Interactive Marketing XX%
Source: U.S. Interactive Marketing Forecast Online Survey,
Forrester Research, 2010; VSS Communications industry Forecast,
American Business Media's Annual Meeting, held in early May, took a single theme approach around the topic of marketing services. While the core of marketing services is based on many things publishers already offer (content, data, lead gen), it's also a different business with longer sales cycles, sometimes lower margins, and a different sales and editorial mentality. It's the latest example of publishers "chasing new money in a hurry," according to Mitch Rouda, president of e-media at Farm Journal Media.
But publishers need to be wary of not just chasing yet another "answer" to the problem of crumbling traditional revenue models. In response to a FOLIO: article about content marketing last month ["The Content Marketing Revolution," April 2011], Dan O'Connell president of agency Foodmix Marketing Communications said, "Publishers entering the agency world happens every decade with a different spin. It failed in the XXs, XXs and it will again. Why enter a business you don't understand when your core business is bleeding? Wouldn't a more powerful combination be for agencies and publishers to partner to meet the evolving needs of advertisers and their brands?"
Entering the Marketing Services World
For some publishers, acquiring their way into marketing services (in March, Penton bought online marketing firm EyeTraffic Media) may be the best option. Referencing the development of Meredith Integrated Marketing, Tom Stein, president and founder of b-to-b agency Stein Rogan + Partners, said it was based on six acquisitions and that former Meredith National Media group president Jack Griffin told him, "If we decided to do this in-house, we'd still be just talking about it."
However, most smaller publishers don't have the war chest for six marketing acquisitions (or spending $XXX million on a digital agency the way Hearst did for iCrossing). For them, entering marketing services requires a mix of in-house development and strategic partnering. Northstar Travel Media last month announced a marketing solutions division based around two internal staffers (a VP of marketing solutions in former TravelAge West publisher Michelle Rosenberg and a dedicated project manager), and a strategic tech partner in Decision Counsel to execute programs.
The Northstar Marketing Solutions group will focus on five key areas of client support: technology platforms, events, research, creative services and social media management. "In the middle of last year, the executive team at Northstar looked at how we were handling marketing services within each individual brand," says Rosenberg. "We found some synergies and opportunities to expand the range of services. That combined with investments we made in different assets--content, tech or research--allows us to look for cross-brand opportunities and delve into areas outside traditional media and marketing."
The Marketing Solutions Group has the potential to be a $X million to $X million business within two to three years, according to Rosenberg.
Like Northstar, many publishers are taking services they've historically offered as standalones (custom publishing, Web site development, lead gen) to the next level under the umbrella of a dedicated group. While publishers can tap existing resources and brand-related salespeople can funnel prospects to marketing services, it's a different enough business in terms of sales cycles, lead times and tech development that a separate approach is warranted.
"Because it's so heavily custom, we don't walk in with a line card," says Rosenberg "We say, here are our capabilities, what needs do you have? The biggest difference between pitching product advertising is a much longer cycle. These are complicated products."
Summit Media Group also debuted a new dedicated custom media group ("custom publishing" is increasingly becoming a description that marketers can't relate to--hence the rise of "marketing solutions") with seven full-time people and multiple freelancers. Summit is looking at an investment of several hundred thousand dollars "to move from where we are to where we want to be in the next six months to a year," says vice president and group publisher Joe Angel.
Summit takes a minimum quarterly retainer of $X,XXX (which can go up to $X,XXX or $X,XXX), but prices vary widely for its turnkey content creation services.
Many of the services now falling under the umbrella of "marketing solutions" have previously been offered as value-added. "We need to change the nature of free with things like copywriting, consulting, white papers and surveys," says Dave Newcorn, vice president of digital and custom media at Summit Media Group. "We charged one client $X,XXX to put together a survey and send it. In any other kind of work, that's consulting."
Summit came up with a price calculator that deducts hard costs but also incentivizes salespeople to sell high. Part of getting the new custom group off the ground was a "lunch & learn" campaign in which Newcorn and his group visited XXX customers in XX cities, explaining the concept of lead nurturing.
The publisher also did research identifying four stages of the buying process and what solutions to offer. They include:
STAGE X: STATUS QUO--No projects. Customers should be addressed with best practices and industry trends.
STAGE X: DISCOVERY--The customer knows they need a project but isn't sure what to do. Here, white papers and Webinars are applicable.
STAGE X: VENDOR SELECTION. Here Summit presents customer testimonials, assessment tools in which prospects can enter data and increasing use of video. "For our market, they want to see the machines in action," says Newcorn.
STAGE X: SHORT LIST. Vendor comparison charts. "Here, they need something downloadable," says Newcorn. "A chart indicates they're pretty far down the path. A boardroom PowerPoint is something junior execs can show to more senior, maybe less tech-savvy execs."
The Summit proposal package includes a kick-off meeting with the content creators, written analysis and recommendations and a XX-month road map. "Now that we have the infrastructure to produce custom packages, we have to look at how we sell it," says Newcorn.
With so many publishers competing with each other (and with agencies) over marketing services, real commitment from both management and staff is required. "I believe success will be defined by a commitment of resources and consistent commitment of the initiative from the top management of the organization," says Northstar CEO Tom Kemp.
Marketing services may be more successful in organizations that focus on specific sectors and have leadership brands within those sectors, Kemp notes. "Sector focus provides much more leverage of content, databases, domain expertise and relationships with major suppliers," he adds. "Sector concentration may be a reason that the early success has been with publishers such as IDG, Hanley Wood, and UBM."
Networld Alliance has been doing custom publications for so long (at least XX years) that they've become part of XX percent of all client sales, according to president Tom Harper. "Special reports, case studies and white papers are part of our core business, whereas video, research and Web development are truly 'custom' for us because they require different people to deliver them," he adds. "We are formally adding these new custom services after a year or so of testing them. And I don't mean just testing their effectiveness for our clients--but determining whether we can handle the new types of projects with current staff, and finding out which outsources are reliable."
Networld Alliance is looking to partner with an agency. "Our goal is to find a single agency we can trust who becomes a pseudo-division of our company without having to buy them out," says Harper. "We have to be smart about partnerships and margins. When you're our size, the outsource is the key to making the whole custom thing work."
Are Marketing Services Viable?
At the ABM Annual Conference, Andy Goodenough, CEO of Summit Business Media and Scott Vaughan, chief marketing officer of UBM TechWeb, debated the viability of marketing services. Goodenough was representative of most of the b-to-b publishing world today--a company that's seen dramatic changes to its business over the last few years (Summit Business Media just emerged from Chapter XX bankruptcy) and is taking stock of where to go next.
UBM TechWeb, on the other hand, has embraced marketing services and undergone a major internal shift to provide those services.
According to Goodenough, the original model for marketing services included these things:
* Sell advertising
* Track bingo card responses
* Offer up surveys
* List rental
* PR opportunities
* Reprint services