What a difference a few years can make. It wasn’t that long ago that business information providers and professional publishers, hit square in the chops by the perfect storm of a global economic slowdown and an unprecedented phase of tech-driven transformation, faced real challenges in adapting their business models to fit a new reality. There can be few B2B businesses that will look back on all of the last ten years with undiluted pleasure.
Plenty has been written about this, with the commentary typically infused with negative labels that characterised ‘traditional B2B publishing’ as an ailing relation to dynamic, emerging digital businesses.
The hour had come for many B2B businesses to change - and change they did. As a result, B2B has experienced – and continues to experience - an extraordinary cultural shift that today sees it form part of the UK’s wider £15.5bn Business Information Sector.
Through data, events and multi-platform publishing operations, these companies have quietly redefined their approach and are looking optimistically at new opportunities. Here, we look at the factors which underpin that optimism:
International Expansion
The PPA’s Publishing Futures annual census has shown a dramatic shift towards international expansion for B2B media. Over half of revenues on average are now derived from non-UK markets, according to PPA/Outsell research, and UK exports of business information amounted to £9.15bn in 2012. Interestingly, UK-based business information providers, who employ 70,000 people in the UK, now employ 80,000 overseas. William Reed Business Media, a company which ten years ago had no international business whatsoever, now has offices in New York, South America and Singapore and has recently launched its historic and iconic brand The Grocer into India. As another example, Haymarket Business Media’s Windpower Monthly brand now delivers insight, events, expert reports, and business intelligence to five key global regions including North America, South America, Europe, Asia Pacific and the Middle East and Africa (MEA). Overseas markets now dwarf the domestic revenues of many B2B media companies, a whopping 55 per cent of revenues for BMJ, for example, compared with 30 per cent ten years ago.
Events: The Third Channel
A 2013 PPA poll revealed that 86 per cent of PPA Business members intended to launch a brand new live event in 2014. This is in addition to the existing spectrum of exhibitions, conferences, webinars and roundtables that drive 30 per cent of revenues for PPA Business members on average - though for some it is as high as 70 per cent. EMAP alone runs 177 events each year, attracting just under 37,000 attendees, and that is before we consider that EMAP is not Top Right Group’s dedicated events division! To a certain extent this is not new. Trusted B2B brands, as experts in creating content for specialist audiences, have a heritage in bringing that content onto a conference stage or exhibition floor, supported by their native publishing skills. As time passes, pure-play conference businesses are likely to look more and more like B2B media companies as they try to match the trust and authority commanded by our brands, and replicate the year-round dialogue we have with our communities through our magazines and websites.
“We should not get too hung up on platforms”
Digital has enabled many B2B media companies to do bigger, better and more profitable things but it is often viewed too simplistically as merely the replacement for the old model.
Most PPA Business members are beyond this print vs digital debate. Take Reed Business Information for example, a business that once had over 100 printed magazines today has just seven and derives 75 per cent of its revenue from high-value paid content almost all of which is delivered through digital subscription services. However, RBI’s COO Dominic Feltham is clear that RBI’s strategy was “not about print versus digital”, and was instead all about the value that RBI could offer its users through new channels. He says: “The exciting thing about digital is the new propositions we can take to customers driven by access to this wonderful technology we have – the types of propositions we now offer can help our users with their strategic decision-making, and can help them identify leads for the business.” At RBI, ‘digital’ hasn’t been used to replace anything, it has simply enabled the development of a wider spectrum of increasingly valuable products and services, delivering immediate information which users are prepared to pay for. And further to this, digital has accelerated RBI’s international reach – three quarters of RBI’s revenues now come from outside the UK.
Euromonitor International, the multi-national market research data business, delivers almost all of its content through digital subscription services. Euromonitor customers overwhelmingly prefer to receive their data service in this way, though managing director Trevor Fenwick insists that his company will deliver the information in any way that the user wants, saying: “We should not get too hung up on platforms, we still produce printed materials – if the clients wants to receive the data in print we’re perfectly happy to do that. However, it is the new technologies that have enabled us to grow as quickly and as strongly as we have.”
EMAP CEO Natasha Christie-Miller, whose businesses have 870,000 registered users, agrees: “As an industry, the value we offer our customers - great information, important analysis and fantastic connections - doesn’t change, so the opportunity for growth is to keep delivering that value in different ways on different platforms and in different products that our users are willing to pay for.”
Marketing Services
B2B magazine publishers are built up of deeply trusted, high-value brands that are integral to specific professional communities. EMAP has delivered considerable success through innovative approaches to its sales culture and the products they are selling – packaged marketing solutions which integrate clients into all channels of the host brand.
Today, 70 per cent of the revenue EMAP derives from its weekly brands comes from these integrated marketing solutions, up from just 25 per cent in 2007, and growing at 20 per cent year-on-year. The success has been somewhat inevitable, following a considerable investment in staff sales training, the development of a ‘trading floor’ culture and generous rewards for sales success.
And the good news doesn’t just come from EMAP. In the US, Outsell’s annual US advertising and marketing study showed that advertisers are increasingly choosing to work with publishers for marketing services, and in some cases spend with agencies has reduced.
However, some B2B media companies have never offered advertising, and for others it is no longer a core part of the business. One could compare this shift in the advertising-reliant business model with buses – the transport company uses its visibility to sell advertising and provide itself with a secondary revenue stream, but fundamentally, its business is built on transporting passengers. Similarly, many business information platforms do have discreet advertising but fundamentally the business is selling access to an essential service. The advertising disappears? Service is maintained.
Cash for content
B2B media is increasingly investing in a model based on essential, highly relevant, highly valuable content. Low-quality content, news and republished press releases are, as far as professional information is concerned, an unprofitable business – we are just unable to compete with Google and Twitter and the news will be online quicker than our editorial teams can write it. B2B publishers are, therefore, working a lot harder and investing a lot more in content that is worth owning and, from a user’s perspective, worth paying for. Essentially, it represents a move from simply providing news to understanding and relaying how that news will improve a user’s day-to-day operational effectiveness, enhance their strategic intelligence and assist with their future planning.
Analysis and the ability to explore information is therefore vital to all strands of business information, and we need to invest in making raw information easy to interrogate and easy to use. IHS, for example, offers a variety of software tools that assist users in getting a better understanding, and therefore better use, of large datasets.
So, as you can see, things have changed. Business information providers have arguably never been more sanguine or bullish about the future. “The cultural shift has happened,” explains PPA Business chairman Michael Dell, senior vice-president at IHS, “You see it in the success in the industry. Around the PPA Business board table, every single person and the company they represent is talking about growth: growth in subscriptions, new ways of delivering marketing solutions, the growth of conference-based businesses, event and webinar-based businesses, and they’re all seeing opportunity – often not just on one of those fronts, but in many cases on all of those fronts. And it isn’t just future aspiration. You see it in the current performance of those businesses.”
The priority for PPA Business in 2014 is to tell this story: to tell customers and advertisers that our industry’s transformation has enabled us to create a better spectrum of products and services; to tell the next generation of talent that this is a sector looking to match their skills and approach with a dynamic, internationally-focused career; and lastly, to tell the government that, at three times the size of the UK film industry, we deserve more recognition for our contribution to UK plc.
