The ‘simple’ reason for the economic disruption of traditional media is the intensified digital competition for advertisers and readers.
Media is no longer the closed world of publishing companies operating with a reasonably fixed range of ‘channels’ (publishing, services and events). The competition is diverse, ever-changing and increasingly global.
For print media, the direct result of the post-digital new competition has been the erosion of its long-term dependence on two revenue streams: readers and advertisers. New-style digital competitors are increasingly focused on media that is either funded by readers OR advertisers. Seldom both. That is the future of most media.
It is a measure of how different the B2B media market will be from the days when the long-time advertising boom effectively incentivised publishers to hype circulations in order to boost revenues. Weekly magazines and newspapers, which once accounted for 100% of B2B profits in the UK, were swollen by the most profitable ads of all, recruitment.
Much of that advertising has gone online or been swallowed by Google search. So, the B2B focus is back to where, arguably, it should always have been: providing valued information that helps readers succeed in business. But the loss of revenue and the additional costs of digital create the need for a totally new business model.
The challenge for these companies is to become versatile information and marketing providers. The most successful will increasingly be ‘narrow but deep’ specialists providing business services including consulting, research, content marketing and executive search – in addition to the traditional range of information and events. They will provide customers with the information, advice, events and digital tools they need. Crucially, companies that once were responsible for printed products must now be service providers.
That requires a complete change in economics and culture. B2B magazine companies, 30-40% of whose staff were once journalists must morph into teams that comprise, perhaps, 25% digital engineers. Just as all kinds of companies are now in ‘media’, so B2B media groups must become more like the tech companies with which they increasingly compete.
For the most versatile, this is an exciting world of possibilities. It is the chance to capitalise on market sectors that had – even before the digital explosion – been leaking high-margin revenues to consulting and market research companies. And even smaller operators can become truly global.
That is both the opportunity for, and the threat to, B2B media groups everywhere. Many will get there with partnerships, joint ventures, alliances and acquisitions that can help them become global B2B winners. That’s the promise of 2016 and beyond.