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Mike Marchesano im Interview: B2B-Media Publishing Trends USA

Vor zwei Jahren machte der Zusammenschluss der American Business Media Association (ABM) mit der Software and Information Industry Association (SIIA) nicht nur in den USA Schlagzeilen. Im Interview spricht ABM-Präsident Mike Marchesano über die Vorteile eines ‚one-stop shops’ und aktuelle Publishing Trends in den USA, über die er auch als Keynote-Speaker am Kongress der Deutschen Fachpresse berichten wird.

Could you please provide first of all data to give us an overview of the current US B2B market? 

Mike Marchesano: Yes, of course. Overall, the U.S. B2B media industry was up 3.5 percent in 2014 to an aggregate of 27.59 billion dollar. If we factor in both B2B media and B2B media information services (paid content) the total U.S. B2B market is about 40 billion dollar.Digital advertising is the single fastest growing revenue category, up 15 percent to 5.78 billion dollar. For the year, digital advertising is the third largest revenue category after print, but quarter to quarter digital advertising occasionally exceeds print in overall dollars. However, digital advertising is not the cash cow that everyone hoped it would be 10 years ago. CPMs (cost per thousand) are falling in both B2B and consumer media and will continue to fall thanks to ad networks, the rise of programmatic buying and search. The digital advertising market is as much as a free-for-all today as it ever was—few follow standards and the metrics of the industry are changing from metrics of mass like clicks to metrics such as engagement. B2B has an advantage here in that B2B has always sold by the attractiveness of its audience, not the size of its audience. Also, most B2B companies are focused on marketing services and selling integrated packages rather than straight ad space, with digital advertising as an important component of that. 

Content marketing and native advertising are two huge contributions to B2B media. According to a Forrester survey, 59 percent of brand marketers were increasing their investment in content marketing, second only to digital advertising (where 70 percent of brand marketers are boosting spending). While ‘custom publishing’ and ‘branded content’ have existed for years, the difference today is what content marketing can accomplish, thanks for digital delivery and social media, customer understanding via audience data and modeling, and the fulfillment of lead generation. 

Native advertising, in which ads and sponsored messages are integrated more directly into the content (and which is a sub-segment of content marketing), is growing quickly as well. Polar, a company that specializes in native advertising, predicts that while direct-sold display ads account for 65 percent of publisher inventory and content-based ads generate about 20 percent , in the next two years content programs will swell to 50 percent of the marketing programs that publishers offer. In 2014, legal publisher ALM launched ALM Brand Perspectives, a proprietary native advertising platform. In less than six months it became a seven figure business for ALM. 

Events is the largest overall revenue stream and profit center overall for B2B media at 12.23 billion dollar in 2014. In recent years, two events-driven companies – Advanstar and Nielsen Expo – were sold for nearly $1 billion each. That said event revenue was up less than 2% in 2014 after being flat for most of the year. Print advertising fell 2.7 percent to 6.71 billion dollar in 2014 – the least bad decline in the last two years. The print market is stabilizing and certain markets are even up. There is money to be made, print is not dead, it’s still the second largest revenue stream after events for B2B as a whole but it’s not coming back to what it used to be. 

Data: By data, we mean selling data as a product. At just under 3 billion dollar, this is the smallest individual revenue stream in B2B media but it’s consistently been the second fastest growing category behind digital advertising (up 5.4 percent in 2014) and it’s part of why there’s been an explosion in B2B media M&A over the last two years. Business-to-business media companies that can develop profitable data sales operations are very attractive to buyers today.  

What are the important trends in the development of the US B2B media market?

Mike Marchesano: Overall, the B2B media industry is starting to capitalize on new business models that connect buyers and sellers and provide users with information they need to do their jobs more effectively and more efficiently than ever before. B2B is once again very attractive to buyers – both merger and acquisition volume and value increased dramatically in B2B media in 2014, with 38 deals (up from 34 in 2013) and deal value of 3.2 billion dollar, up from 452 million in 2013, according to the Jordan Edmiston Group.

Taking control of data is key for the development of US B2B companies. That refers to taking control of both customer data – finding out who your customers are, what they need, how to serve them and how to sell to them is critical. Audience data is the cutting edge of marketing technology today. It also refers to developing market data as a sellable product.

Randall Reilly is a U.S. media company serving the trucking industry that’s done a terrific job of packaging data that it’s able to collect during the course of its publishing duties and selling that data for an on-demand view of the marketplace. ALM bought RivalEdge, a data platform that monitors and filters legal news for attorneys. Sophisticated algorithms allow RivalEdge users to search by concepts, rather than just keywords. 

The opportunity extends beyond just the B2B publishing industry – one of the fastest growing revenue streams for The Weather Channel is selling B2B weather-related data to vertical markets and governments that may not have a weather-monitoring infrastructure like the U.S. or Europe. A single canceled flight from San Francisco to Hong Kong could cost an airline 250,000 dollar – data that can help them avoid those cancellations is worth a tremendous amount and shows the real power of B2B information. Converting data into a sellable product isn’t the sole domain of larger companies. 

The B2B industry is starting to capitalize on the power of technology to both collect and disseminate information. Companies are starting to engineer their workflows, rather than follow a process of simply writing content and then posting it to the relevant platform. The monthly editorial calendar is starting to be replaced by day-parting strategies in which publishers serve different types of content to readers based on their changing needs throughout the day, and on the best platforms to serve those needs throughout the day. For years, the industry has spoken about how lines have blurred between publishers and advertising agencies in the way they handle and serve advertising clients – now the lines are starting to blur between publishers and technology companies. Although it’s still a fairly small part of the business, publishers are developing workflow tools and software-as-a-solution products to serve their customers. It’s not about simply filling the information needs of customers but solving actual problems for customers as well. 

How do most of U.S. B2B media companies generate their revenues? Are there new business segments which develop successfully?

Mike Marchesano: Lead generation is the core business model of B2B – but the best platforms for generating leads can vary. Most larger B2B publishers (50 million dollar in annual revenue and up) see events as their single largest revenue stream. Marketing services (offering fully integrated marketing solutions and campaigns, rather than selling space in print or online) are typically the fastest growing revenue streams. Print remains the largest revenue stream for many smaller publishers, although digital advertising is gaining rapidly. Many publishers are also developing paid content models, that can range from individual subscriptions for magazines and newsletters to information services that bring together news, research, data and more that are sold to corporations for six-figure licenses. Marketing services, data sales and digital advertising are typically the three fastest growing businesses for B2B publishers. International expansion is another tremendous opportunity for U.S.-based b2b media companies, particularly in China, South America and Russia.

Many B2B companies are identifying innovative ways of incorporating social networking and other user-generated content sites into their business model, using these for lead generation and content development. Can you think of a business model in this context which you regard as outstanding?

Mike Marchesano: The primary mission of B2B media is to connect buyers and sellers and lead generation is at the core of what B2B media does. In fact, the overall business model is changing from share of voice (how many potential buyers receive an advertiser’s marketing message) to cost-per-lead, in which publishers are making money according to how many qualified buyers they are able to deliver to a marketer. Many B2B publishers are doing a terrific job with a variety of lead generation strategies. If you’re talking specifically about leveraging user generated content to foster leads, some B2B publishers such as ALM are tapping into the Forbes Contributor Network, a white label solution that both curates expert third-party content while offering a content management system to publish both reader and original content. Penton has launched IdeaXchange, a platform that connects business decision-makers across its core vertical sectors such as agriculture, transportation, natural products and food, infrastructure and design and manufacturing with industry experts (dubbed ‘Xperts’). The Xperts post brief, engaging and thought-provoking entries across more than 70 Penton websites, starting dialogues with readers. Penton has developed more than 130 contributors and the metrics show that readers visit IdeaXchange author profiles five times more often than traditional authors and users are also eight times more likely to comment on provocative IdeaXchange post than with standard content.

The merger of ABM with the Software and Information Industry Association (SIIA) in 2013 made big waves. Which consequences had this move?

Mike Marchesano: The merger of SIIA and ABM creates an organization that represents a far stronger and more complete B2B universe. Specifically, the merger brings together ABM – the Association of Business Information & Media Companies with SIIA’s Content & Information Services Division, resulting in a single group that serves information, publishing and media companies, as well as business that create technologies serving the content and business needs of the b2b marketplace. Representing a market of more than $40 billion, the new ABM/CISD is focused on the intersection of information and technology that includes advertising, paid content, events, and software and technology. The new ABM/CISD is the ‘one-stop shop’ for the B2B media and information industry. 

The membership base of SIIA includes both software developers and information providers such as Reed Elsevier and Pearson. It also includes companies that seem to have a somewhat different focus than ABM. What do you expect from merging various industries into one association?

Mike Marchesano: As mentioned, ABM/CISD is focused on the intersection of technology and information. The lines are blurring between ‘information provider’ and ‘technology provider’ and we are providing a forum for both sides to come together, make deals, swap best practices and raise the quality of discussion and learning. 

Late last year the ABM hosted the yearly ‘Business Information and Media Summit’ in Miami. What were the leading topics during the congress? 

Mike Marchesano: This conference  was the first event to officially bring together the membership of ABM, CISD and another SIIA division, the Specialized Information Publishers Association, which represents entrepreneurial paid content publishers. This event featured four tracks, including Data Content, which focused on developing a data sales business; two tracks dedicated to marketing, with sessions ranging from segmenting and targeting to social media listening to designing landing pages that work; a Media Sales track that included topics such as Structuring the Sales Force for Media and Events and Future Selling: Marketing Automation, Programmatic Buying and Re-targeting; and a Strategy Track specifically for c-level executives that looked at leadership concerns from managing workforce to managing mergers and acquisitions. Our keynote speakers included David Kieselstein, CEO of Penton. David is the former CEO of market research company TNS America, who is now in charge of transforming one of the largest B2B players in the U.S. Other keynotes included Brent Reilly, president and CEO of Randall-Reilly, a B2B publisher that’s developed a terrific data business, and Patricia Arundel, head of media and high tech for Google Enterprise, another SIIA member. Archives of many of the presentations are available . The conference gave ABM, CISD and SIPA members the opportunity to make new contacts, be exposed to new business models and new types of thinking, and convey the rich opportunities in the B2B media and information space. 

Die Fragen stellte Karin Hartmeyer.

Das Interview erschien in "Letter 2/2015"