E-News : May 6, 2008
Celebrating Progress, Change and Achievement with ABM's Committees & Councils
While the focus of our nation is on Hillary, Barack and the North Carolina and Indiana primaries, all eyes at Spring Meeting were on ABM’s own leaders, the Committee & Council representatives who shared some of the biggest business ideas they’ve developed: Heather Cejovic, Jeff Lapin, Jim Meyers and Guy Wendler. The four dynamic ABM members explained just what their groups – the Circulation/Audience Development Committee, Agri Council, Custom Media Committee, and Government Affairs Committee – are doing to advance the interests of both the Association and the industry. And these four have been busy!
Moderator Jeff Lapin of the Agri Council and Farm Progress Companies discussed the Council’s new marketing campaign, which stresses the importance of utilizing a broad mix of media to reach the Ag audience with its slogan, “The best way to reach farmers is to plant many seeds.” The Council’s quarterly e-newsletter, the Ag Council Intelligence Report, reaches more than 5,000 of AgriMarketing magazine’s subscribers. In addition, the Agri Council plans to hit several Ag media convocations, including the National Agri Marketing Association and the Ag Media Summit. Sounds as though the Agri Council has a green thumb!
Heather Cejovic, of Computer Fulfillment, represented ABM’s Circulation/Audience Development Committee. Building on yesterday’s awards show, she introduced the Circulation Career Award, given to an ABM professional with a proven record of circulation accomplishment and directed circulation initiatives. Nominations are due this Friday, May 9, and the award will be bestowed during the ABM Achievement Awards breakfast on June 17. As if that weren’t enough, the Committee has developed white papers that you’ll find under the “Circulation” section of www.AmericanBusinessMedia.com.
Cejovic personally worked on the Integrated Database Report that provides tips on how to best build one, as well as five different case studies. The Committee has also developed policies and procedures for circulation departments, including rules on telemarketing and Internet e-mail marketing, and published an e-mail delivery report that offers guidelines to help ABM members maximize their e-mail marketing. The Committee meets four times a year, which explains its impressive output.
Jim Meyers took the spotlight next. As president and founder of Imagination Media, he has grown the business in only one year, from zero to 55 employees. Meyers’ message: Content is king, especially as far as the Custom Media Committee is concerned. Their new Micro site runs four blogs on custom media and custom publishing to drive traffic to ABM’s site. Not to be outdone in the awards department, the Committee recently launched the Custom Media Innovator of the Year Award. Make your colleague a star for helping you grow custom media, and send that person to the Committee’s fall breakfast series on custom publishing.
As ABM members probably heard yesterday, the new buzzword is “transformation.” And Guy Wendler of Stamats knows plenty about that. The Government Affairs Committee fought strongly for postal reform … they fought and they won! There was only a 2.8% average member CPI increase in 2008, which translates to $30 million saved. As Guy Wendler noted about the Committee, “its purpose is to watch your backs, basically.”
There are still ongoing battles and a ticking time bomb resulting from postal costs increasing more than revenue, in which case the level of service may drop (we didn’t think that was possible). Then there are the tricky new minefields of free speech, reporter shield laws, intellectual property, Internet access monopolies, liability limitation in case your data gets breached, and access to government information, as well as the ad tax, which the Committee has already defeated.
“The postal rate case was like fighting World War II battles,” Wendler said. “Today it’s a little bit different, it’s like the War on Terror.” Luckily, the Information Policy Committee, headed by Cindy Braddon of McGraw-Hill, has generated policy statements for reporter shield laws (pro), Web consumer tracking (no policy yet), green initiatives (no issues), and the “Do Not Call/E-Mail/Fax List” (which scam companies are already using to try and extort money from ABM, but David Straus has our back!). Wendler named generals in this fight: David Straus and Mark Sableman of Thompson Coburn LLP, our legal counsel Dave Nichols of Morgan Lewis, and of course yesterday’s wonderful speaker Robert Walker, our point man in Washington. The Committee emphasized cooperation and working with Washington … what a concept!
The breakfast adjourned with the invitation to nominate your favorite HR manager (no, not Catbert of “Dilbert” fame) for the ABM Human Resources Executive of the Year Award by May 12.
The New (Monetary) Face of B-to-B
ABM’s incoming chair Gary Fitzgerald opened Tuesday’s general session by introducing attendees to b-to-b’s new owners, who were more helpful and informative than intimidating.
Moderator Jeffrey T. Stevenson of private equity fund Veronis Suhler Stevenson (VSS), asked panelists to talk about the M & A market, since there’s a lot of deal flow right now. There are still a number of banks out there willing to finance smaller transactions, though very little left of the syndication market.
Philip Thompson of Alta Communications sees the world falling into haves and have-nots in terms of aggregate deals: a handful of companies that have organic growth strategies (haves) and a lot of companies that, a few years ago, would have gotten sold for a good multiple (have-nots). There’s a finite amount of debt capital for the first time in a long time. It is increasingly difficult to finance companies, but easy to finance anything that requires less than $30 million of debt. Thompson added, “If you don’t have to sell right now, it’s not a great time to sell.” Stevenson offered a devil’s advocate point of view, arguing that the market isn’t full and therefore, it’s a good time to sell.
Michael Hannon of CCMP Capital Advisors observed that credit markets are clearing but slowly, adding that 2007 was tumultuous but today, there’s still money available for good companies and stable business models with recurring monthly revenues and very good leverage.
Gordon Crovitz, former publisher of The Wall Street Journal, took the view from 30,000 feet and said that there is a real benefit of private ownership as opposed to public membership. He quoted Tom Gloser of Reuters.com as saying that in the b-to-c media world, no company should be publicly-traded in the next decade.
Hannon said that for private equity, “it’s back to the future,” where you parse the capital structure according to the business and divide capital structure into the most advantageous terms. You might go to a mezzanine fund, and Hannon plugged VSS as an example, cautioning the audience to “be very careful in terms of what the company needs during these economic times.”
Stevenson asked the panel, “What do you say to the owner of a b-to-b company who wants to invest in order to grow the business?”
Thompson answered to the hypothetical company: “You’ve had a lot more fun in the business these last few years than we have. If you look at the amount of leverage, it’s dipped from 4-4 ½ to 3-3 ½.” He noted that it was easy to refinance debt before and reset covenants, whereas right now, it’s extremely difficult to refinance companies and it’s very expensive.
With the EBITDA data up and down, and multiples up in the air, Stevenson asked panelists for their 2009 outlook. Thompson thinks values will be slightly up, although there will be repressed value in b-to-b media that hasn’t figured out that growth. Hannon concurred, and said he shares the ‘W” shape economic chart from yesterday’s luncheon speaker Dr. Kasputys (up-tick after the rebate checks, then leveling out). Crovitz affirmed that the “Dr. Kasputys explanation” is about where we’ll end up, though he’s looking for predictable top-line growth.”
Crovitz commented on the industry transformation, noting that “the first law of technology is that whenever there’s a change in technology that changes people’s behavior, we tend to overestimate the short-term impact but underestimate the long-term impact.” He added, “Companies with great brands that end up serving audiences will be winners five years from now. We’re in a period where change is accelerating and technology is unpredictable, but it’s going in the direction of empowering consumers.”
Stevenson jumped in with a question about WSJ.com’s hugely successful paid online subscription model. Crovitz answered, “the secret to having a paid subscription site is to start with a brand that has a 100-year-old model.” WSJ Online has 1.1 million paying subscribers, more than the number of people who pay to subscribe to The New York Times in print.
The question, he said, is not whether the customer should pay for content, but whether the content is a good use of their time (and their company’s resources) … For example, will it give companies a leg up over the competition? The incremental profitability of subscription to a Web site is very high, and the price to deliver those subscriptions is modest. People do rely on information they can’t get free, and print is still dominant as an information provider among the new forms of reaching the marketplace.
An attendee asked Stevenson which criteria VSS uses to evaluate where a company presently stands. Stevenson answered, “five years ago it was print only. Today, we wouldn’t even consider making an investment on a company that hadn’t changed.” A company that can do that will command two-digit multiples. CNBC’S Jim Cramer emphasized that where a company is headed begins with its management. Hannon agreed. “We would take our model from one that is more future-oriented rather than one that is historically set.”
Face-to-face panel moderator Galen A. Poss, president of Hanley Wood Exhibitions, defined a “keystone” as a piece that locks all other pieces into position. Integration itself seemed to be that keystone, according to the panel discussion. In response to Poss’ question about integrated operations, TechWeb’s Live Event head, Eric Faurot, who manages a $75 million division (worth $40 million when acquired), said events are the center of the company’s ecosystem. His company serves the vertical and has a strong online resource. Darlene Gudea, VP/publisher/Editor of Trade Show Executive, said 90% of the company’s revenue is from print, with just 10% from online platforms. Her company is a single title publisher, so it’s easy to be fully-integrated. Trade Show Executive will produce an interactive digital show, which creates selling teams of online salespeople and corner-office executives. Faurot said that you have to look at an integrated strategy both internally and externally. TechWeb and the industry are moving towards aggressive sales teams “where we are completely aligned in how we look at the market.” They leverage that objective across online properties and try to eliminate barriers internally to help companies have a conversation. Poss asked the distinguished panel whether customers are asking across the board for integration. Mary Dolaher, CEO of IDG World Expo, responded with a resounding yes, and said her corporate sales people are working to make it seamless. For instance, they built a Web site for gaming and social networking for an expo. Faurot added that “some trade show models are less threatened by digital … It’s not about one format or another, it’s how you’re serving the audience.” Frank Anton asked from the floor, “What kind of online services do you offer and how successful are they?” Faurot responded, “This is the Holy Grail.” He recommended combining the online world with the concrete world so that everyone is not exhausted, say, after a four-day event (like this one). He added that he’s seeing traction in virtual trade shows (where 4,000 people signed up to get 2,000 leads). Gudea added that virtual is not a replacement for face-to-face, but does bring in a global audience. Poss argued that what happens at the ABM Spring Meeting networking breaks doesn’t happen online, however Faurot argued that barriers are often lowered in a virtual coffee bar. Dolaher added that because of Facebook and MySpace, people are becoming much more comfortable and adventurous online. Remember, though, as Gudea said, “It starts in the corner office.” It starts with ABM members. Before lunch, Neal Vitale, CEO of 1105 Media, whetted everyone’s appetite with an appetizer of CEOs, namely David Mather, president of Hoover’s, Dun & Bradstreet, a veteran of the tech world who has been involved in established companies such as Unisys and eight start-ups; Charlie McCurdy, chair/CEO of Canon Communications LLC/Apprise Media LLC and former founder of Primedia; and Tony Uphoff, CEO of TechWeb. The panel ably rose to the challenge of discussing the dreaded R-word. Mather, facing an 18-month window before prices pick up again, said, “It’s tough to judge. We see some slowdowns, mainly in decision-making, corporations creating their rainy day fund.” He explained that the advertising side of the business (and monetizing advertising) is where Hoover’s probably sees the biggest slowdown. On the other hand, it’s a mixed bag: Hoover’s is seeing fresh subscriptions. Uphoff said that TechWeb is not feeling the impact thanks to its expos and forums (mentioned in the last panel by TechWeb’s Eric Faurot) such as Web 2.0, Black Hat, and VoiceCon. In today’s world, people can’t stop acquiring technology, whereas before they cut back. TechWeb puts live events and online media at the forefront. Each CEO gave varying figures as to what percentages of their revenues come from print, online, events, etc. But for the first time, print is not growing. Vitale asked the panel how to transform the industry. McCurdy said that Canon has a healthy majority in trade show business, modest growth in print and very healthy continued growth in digital. Morris said that Hoover’s side is “very, very small,” but actually growing. Hoover’s has acquired AllBusiness.com, which supplies research articles normally found in print. The future, as he views it, is trying to catch customers in the context of their activity and finding the best time to interact with them. The big development at Canon is digital media business, which is still growing rapidly, a hybrid integrated with print. McCurdy said, that the one thing he is certain of is that “there’s no one answer,” adding, “the only thing I can say from my experience is that it’s a function of how your customers want to buy.”
David Klein, VP/publisher/editorial director of The Ad Age Group, must have felt a bit like Johnny Carson or his successor Jay Leno in interviewing David Bell, senior advisor to a little company you may know by the name of Google, and Jean-Philippe Maheu of Ogilvy North America. For people who remember Abbott and Costello (the rest of us can look it up on Wikipedia – or Google them!), imagine that one of them is French.
Maheu started off the exchange by talking about brand dollars and lead generation, strong content, identification with quantified audiences and building a product to engage users. Bell replied that core content has never been more important. The digital revolution has changed the traditional top-down funnel discussed yesterday, though Bell said content must be accessible (and accessible forever). The whole shift from pushing information to facilitating conversation necessitates digital media. There’s the social community aspect and whether business media companies want to be the Facebook for their clients, and, more broadly, for the industry.
Maheu agreed that social media is popular, but the success of social media platforms “was a combination of luck and hard work.” He also coined the aphorism, “To fish with a fish is out,” and added, “Why don’t we engage this audience where the audience is? Start thinking about how you can distribute content to other places where there’s an audience. Stop thinking of your Web site as a Web site.”
Bell noted that distributed content, widgets and other gadgets are huge, but the next iteration is connecting content for the long tail of the Web, building communities and facilitating them.
Bell explained that the opportunity to tell different stories about the same product is only available on the Web. You can spend $30,000 for each of 30 videos (45 seconds) versus $1 million for just one commercial. Maheu concurred that marketers need to be able to tell stories in multiple mediums, and pointed to Cisco Systems replacing PDF white papers with video content. The click-through rate on the video is seven times higher than on the PDFs.
Klein asked the two playfully-friendly debaters about what’s happening in the ad agency world and how easy it is to change cultures. Bell responded that all 27 different kinds of agencies are trying to get to the Promised Land – creatively-focused, digitally-centric, interactively-led – but there’s a tremendous amount of disintermediation going on in the media landscape. Some quarters have moved beyond the philosophy of “clout is king,” with the exception of big media conglomerates, and are reconnecting media planners to the entire process.
Klein inserted the observation that there used to be one big agency. “Now everyone’s a specialist.”
Maheu said that Ogilvy considers everything digital. “Don’t view digital as a different department,” he said, adding that “digital DNA” is going to be highly-valued, and if you as the professional send a signal to the agency, everyone will go digital. He agreed that there will be mistakes along the way. “We’ve made tons of mistakes, we advertised Razorfish for many years. When you make mistakes, stop what you’re doing quickly.”
Klein asked what b-to-b media can do for Google and Ogilvy North. Bell said b-to-b companies must have salespeople that can sit down with agency teams and co-create solutions. Companies should always be striving to break ground with new ideas. He also recommended that b-to-b media treat the agency as a partner. Maheu agreed that flexibility and the creation of new concepts are vital to agency success, but underscored the significance of analytics. A b-to-b media company needs to understand its audience for the media buyer and what that audience is engaged in.
The two debaters reached consensus on one final (and vital) point: Bullish or bearish on b-to-b media companies?
Bell: “Based on what I’ve heard today, I’m super bullish.”
Maheu: “Me too. I’m very bullish.”
Junta42 is a Digg-like bookmarking/social media-type tool. Therefore, Joe Pulizzi, who launched the company, is in the thick of social media. Should you be? What exactly is social media? Chavoen said LinkedIn and Facebook represent just one aspect. She sees a “bifurcation” of social media, internally as in company Web sites and externally as in out on the Web where the customers are playing. Then there’s passive and active social media, passive is listening and learning from social media sites, listening to customers and getting exposure to new audiences and new opportunities while active is creating Facebook widgets to drive certain Facebook groups back to your site. She said, “You always have to tie it back to your business.” Morris passionately said that “people are actually participants; they communicate with each other. We’re just not faceless automatons to be bombarded with messages.” When digital media encroaches into traditional media, “niches start forming and people start talking. Social media is the glue that facilitates conversation, but what really matters is the content.” So how should a b-to-b publisher get started in this brave new world? Weisfeld said that barriers to entry have come down so far that experts are competing, communicating in the same way business media can. Breed told attendees to answer the “So What?” question. What did I really accomplish with an article or a blog? Does it help me increase brand awareness/circulation? He then asked, “Why not give people the opportunity to discuss content and products on your site rather than trying to harvest it from other properties you don’t have control over?” What about editing customer comments? Panelists recommend you guide the conversation rather than edit criticisms (unless those posts violate the terms of use). Other posters may become your best advocate. Chavoen’s company has a professional whose job it is to read all comments and peer reviews. How do you make social media even more interactive and integrate it with existing media? Pulizzi said that Junta42 aimed to capture a lot of the conversation in the content marketing custom publishing industry, but it’s important to stay open-minded. Companies can take a leaf out of Google’s e-book and use competitors’ content to attract Web site traffic. Chavoen articulated her vision: “You have to be willing to change the way you do business, see how your brand is being talked about externally. She recommended Joseph Jaffe’s book, “Join the Conversation,” which proposes a job title of Chief Conversation Officer. Final question from Pulizzi: What should we be doing now? Breed: “Use social media as just another medium to deliver quality content that people want, then they will engage with you in the way that you want.” Chavoen: “Social media does not always have to be an active sport. Find, follow, listen and learn. Conversations can’t happen without content.” Weisfeld: “Provide the tools to share content; that drives more eyeballs to your page.” Morris: “Standing for something. I don’t think anything’s more important than that. People love opinion. The days of general media being recorders of events and news is just not enough any more. The more interesting your space is, the more people will come.” Pulizzi: “It’s hard to understand on a personal level if you’re not involved. Get involved. Follow the conversation in your industry. Everybody should have a Facebook and LinkedIn account.” All Spring Meeting coverage by guest reporter Kristin Johnson. Spring Meeting 2008 is sponsored by Audit Bureau of Circulations, Berkery, Noyes & Co., BPA Worldwide, BtoB, CDS Global, Computer Fulfillment, Convera, DeSilva + Phillips, Dragonfly, FOLIO:, FosteReprints, The Howard-Sloan-Koller Group, InXpo, The Jordan, Edmiston Group, Inc., Nstein, PARS International Corp., Quebecor World, Readex Research and Tradeshow Week. Virtual or Real-World Networking ... Or Both?
Integration, Globalization and Conversation with the CEO Roundtable
McCurdy said he’ll take the current “soft economy” any day over the tech bubble and post-9/11 one of 2001 and 2002. As a publisher, Canon specializes in the advance manufacturing sector of North America, probably one of the healthiest parts of the U.S. economy.Silicon Valley Meets Madision Avenue - Who's On First?
The Face-to-Face of Facebook: Where Social Media and Publishing Collide
Panelist Laura Chavoen, VP of digital marketing for Imagination Media, builds relationships with content and views social media as one of the ingredients of the media pie. Jason Breed of Neighborhood America, which builds communities across the Web and mobile platforms, heads up social media on the b-to-c side (You Report for FOX News, Consumer Reports for ABC and CBS) and said it’s not about the medium, but about the engagement. Michael Weisfeld of BusinessOnLine, which strives to leverage social media across various platforms, said his enterprise meets with clients to find out what they’re trying to accomplish in engaging consumers. Jeremy Morris of Campbell Ewald, which he calls “a big old lumbering ad agency in Detroit representing some big old lumbering company, General Motors and Chevrolet,” thinks that we all have a different angle to play in social media today.
Edited by Kate Patton and Samantha Sims.