BUSINESS PRESS REPORT: BUSINESS PUBLISHERS LOOK BEYOND PRINT - With so many different marketing opportunities now available to advertisers, publishers have been forced to become more flexible to stay ahead in an increasingly competitive sector. By Lucy Ho

Over the past five years, business-to-business publishers have taken on a range of activities outside their traditional remit. With their immense databases of business contacts, wealth of information, and editorial authority, they are well placed to extend brands to include exhibitions, online services, directories and conferences.

Over the past five years, business-to-business publishers have

taken on a range of activities outside their traditional remit. With

their immense databases of business contacts, wealth of information, and

editorial authority, they are well placed to extend brands to include

exhibitions, online services, directories and conferences.



Last month, Reed Business Publishing relaunched itself as Reed Business

Information, reflecting the broadening of its activities and the fact it

no longer wants to be regarded exclusively as a publisher. Similar

rebranding and expansion of activities has taken place over the past

five years at other companies. In 1993, Emap merged its business

publishing and exhibitions divisions to form Emap Business

Communications. And in 1995, Morgan-Grampian reinvented itself as Miller

Freeman, taking the metamorphosis one stage further in 1996 with the

pounds 200 million acquisition of Blenheim Exhibitions.



Nowadays, many business magazine publishers prefer to see themselves as

business information providers. The information they disseminate remains

the core value and resource but the method of transmission has

changed.



In today’s market, few business publishers can afford to concentrate

solely on the traditional magazine format.



’There was a time when producing a business magazine was the be-all and

end-all, but now it’s only one part of the communication mix,’ says

Andrew Shanks, European development director of Miller Freeman. Reed

Business Information’s electronic publishing director, Jim Muttram,

agrees: ’In today’s environment we cannot allow ourselves to become too

worried about one media type versus another.’



However, this is not to say publishers are abandoning their heartland

completely. They might be investing heavily in electronic media and

other brand extensions, but business magazines are still their main

source of revenue.



A recent survey by the Periodical Publishers Association of the

attitudes of business publishers revealed that from 1991 to 1996 the

number of magazines produced by the survey’s participants increased by

48 per cent. It also predicted a 30 per cent growth in the total number

of titles to the year 2001. Publishers clearly have no plans to give up

on magazines in favour of electronic or any other media.



Neil Thackray, director at Miller Freeman, sums up what is a familiar

story across the business press: ’Around 70 per cent of our revenue

still comes from advertising, but now we’re in the process of increasing

our revenue and profit from other product strands.’



Where did the impetus for this shift come from? Some people say

publishers are merely answering the demands of the market and protecting

themselves from a migration of clients’ budgets from display towards a

broader range of marketing tools.



Other sources suggest the trend is driven by publishers searching for

alternative profit centres as the magazine market shows signs of

maturity.



Most publishers accept their interest in alternative media is driven by

both the requirements of the market and those of their investors. Tim

Brooks, managing director of Emap Healthcare, says: ’Exhibitions have

been much more resilient in the 90s than magazines. Display revenues

have come under pressure from other media, such as direct marketing, and

we’ve had to respond to that.’



With so many different marketing options now available to them, clients

often prefer to opt for a more easily- quantifiable medium than display

advertising. This is one of the main reasons for the direct marketing

boom over the past five years.



To stay ahead, publishers have been forced to become more flexible.

’We’re absolutely agnostic about the media we use to supply our clients’

needs.



If they decide to produce their own booklet for customers rather than

invest in display, we need to be media-neutral and offer to create that

product for them. If not, they’ll take their money elsewhere,’ explains

Brooks.



There’s no denying these alternative products do represent lucrative

opportunities for publishers operating in an increasingly competitive

and mature market. ’The business magazine world is mature and many

sectors are full of magazines that have reached their limit in terms of

profitability,’ says Thackray. Where competition is tough, it makes

sense to take advantage of the strength of the brands we’ve worked hard

to establish and spawn them into new sectors to generate new kinds of

revenue. Without new media and other ancillary products it would be

difficult to find significant new profits.’



How much publishers have been hit by a migration of clients’ marketing

budgets away from display advertising depends on individual markets.

Tony Read, managing director of Carat Business, which deals with clients

as diverse as Apple, ERF Trucks and Philips, says: ’Funds have been

diverted away from display in favour of other media in the building and

construction, and media markets, but in the IT and financial markets,

advertisers have increased their display budgets.’



Given the nature of the IT sector, online services and CD-Roms are

readily accepted, but it’s a very different story in traditional markets

such as catering.



Ian Fearnley, communications planning director at specialist agency,

Clark and Taylor, believes publishers are more concerned with paying

lip-service to progress than actually changing the way they work.



’I often have clients who want to do something outside display, such as

distributing sample packs. Although publishers will tell you they want

to serve the advertiser’s needs, it’s a very different matter when you

try to get the ad sales teams to do something out of the ordinary for

you,’ says Fearnley.



The catering market has seen clients cut back on display in favour of

direct marketing and exhibitions. ’The fact that leading groups such as

Reed have both exhibitions and publishing covered means that they get

our money one way or another,’ says Fearnley.



The ups and downs of the economic cycle have played a significant role

in moulding Britain’s business communications industry. The growing

strength of the economy through the second part of the 90s has enabled

publishers to firm up rates, producing an uplift on yields as high as

500 per cent in the computing sector.



This trend, combined with the burgeoning pagination of IT titles such as

Computer Shopper, which usually has more than 1000 pages, has prompted

many advertisers to look elsewhere to establish a stronger presence in

the market.



George Shaw, managing partner of the specialist IT agency, Joslin Shaw,

says: ’Because of the increased ’thud’ factor, I’ve taken to buying more

outside back covers for my client Kingston Technology. Where we can’t

get the OBC, we’ve dropped the title from the schedule.’ Joslin Shaw has

doubled Kingston’s spend in the national press for 1998 and is running

campaigns on the London Underground, on the outside of taxis and in

Dennis Publishing’s consumer titles, Maxim and Stuff.



From publishers’ points of view, the economic recovery might be

producing a huge upturn in advertising revenues -both classified and

display - but the ravages of the last recession are still at the front

of their minds.



At the height of the recession in 1989-1990 recruitment advertising

revenues dropped to such an extent - falling 50 per cent in one year in

the nursing market and 80 per cent in the architectural market - that

publishers set about expanding their ancillary revenue streams to avoid

the same thing happening again.



However, with the economy at a ten- year high, things are looking up in

the recruitment field. Emap’s Brooks declines to reveal any figures but

says: ’In all our markets with significant recruitment business -

nursing, local government, media, fashion and construction - this year

will be the best for some years.’



With the fortunes of the recruitment and display market so closely tied

to economic fluctuations, it’s no wonder publishers want to establish

themselves in other media. The difficulty for business publishers is

predicting from which direction their future profits will come.



Fearnley fears business-to-business publishers’ tendency to bury their

heads in the sand could be their downfall over the next few years.

’We’re pushing them to consider the future. Publishers have got to start

looking at their products as brands with unlimited potential, like

Manchester United, not just as magazines. It’s now 1998 and we’re on the

verge of a massive digital explosion. The first people to normally

accept new technology are business people, yet they still appear to be

blinkered.’



To survive the new media environment, business-to-business publishers

will have to be adaptable and not hamstrung by emotional ties to

traditional products.



DIRECTORIES AND CD-ROMS



Electronic media has revolutionised the directory business. Not only do

CD-Roms offer greater search facilities, speed and flexibility than

their printed counterparts, but new products are continually coming

on-stream, such as the new-look Conference Blue Book, which will be

available this October on a ’hybrid’ CD-Rom. The directory, which is

Miller Freeman’s most profitable, has been available on CD-Rom since

February 1996, but the new edition will allow users to switch from the

CD-Rom to the Internet to check up on continually updated conference

deals.



The flexibility allows CD-Roms to avoid the most common complaint

levelled at directories: that they’re out of date as soon as they’re

printed. George Shaw, managing partner of Joslin Shaw, calls yearbooks

’dust gatherers’, a description that falls in line with the view of many

agencies, although his criticisms are levelled at the IT market in

particular, which is too fast-moving for directories.



Another often-heard criticism of directories concerns their sales

tactics.



Sarah du Heaume, director of Just Media, says: ’Directories/yearbooks

are the bane of most media buyers’ lives. They are normally sold very

hard by commission-based sales people who have been in the job ten

minutes and read a script over the phone.



The directories rarely have audited circulations and are normally

overpriced.



Uggh.’



That said, the PPA’s Media Convergence and the Business Press report

predicted a 55 per cent growth in the number of directories over the

five years to 2001.



ELECTRONIC MEDIA



Business-to-business publishers have realised that in order not to be

left behind in the new-media revolution, they have had to become part of

it.



They’ve invested millions of pounds and the best part of three years

trying to establish how to package their expertise on the Internet and

CD-Rom, with mixed successes. Despite the widespread enthusiasm for the

Web, there is little evidence of profit so far.



Estates Gazette Interactive, which launched in June 1996 and is one of

the first online services offered by a business publisher, has 1,300

subscribers and is expected to be profit-making by 2000.



One of the main problems with online advertising is the difficulty of

measuring its effectiveness, particularly compared with off-the-page

advertising or direct marketing.



Ziff-Davis is trying to alleviate this problem by commissioning MAGtrack

to develop NETtest, an electronic equivalent of the media research

company’s hard copy reports. NETtest provides advertisers with

information on the type of people who access publishers’ Websites, what

they read and how long they spend online. Most media owners quote number

of hits using their own figures.



Neil Thackray, director of Miller Freeman, says: ’The trick to making

money out of Websites is to understand what information the users

require to help them make a better decision. Many sites fail because all

their creators have done is repackage existing content.’ Used properly,

the Web’s interactive nature provides advertisers with a forum to talk

to their clients and target them accurately with messages tailored

towards a specific audience. For the moment, online investment is

strategic and most definitely long term.



LIST RENTAL AND DATABASE MARKETING



Client awareness of the value of customer data has increased rapidly

over the past five years, producing unprecedented interest and growth in

direct marketing. The direct marketing boom has largely been driven by a

desire by clients to find a more easily-quantifiable medium than display

advertising.



At the same time, leading business-to-business publishers have realised

the value of their expensively compiled databases and are now drawing

significant revenue from them.



Costs vary depending on the size and detail of the database, whether

it’s an original creation and how much on-going support the publisher

provides, but most publishers deal off a ratecard, offering 1,000 names

for around pounds 150.



The biggest hurdle in database marketing is ensuring the list is up to

date, which is costly.



Tony Read, managing director of Carat Business, says: ’Direct marketing

can provide excellent direct targeting opportunities, with less wastage

than display advertising. But you have got to be really confident that

the publisher has kept the list up to date, which in the past they

haven’t been too hot on, and it has to be part of a wider marketing

mix.’



EXHIBITIONS AND CONFERENCES



Business-to-business agencies generally regard exhibitions as

worthwhile.



Sarah du Heaume, director of Just Media, says: ’Exhibitions give you a

chance to demonstrate the value of your products. You don’t get that

from an ad. But you need to make sure you have the right traffic on your

stand.’ They also allow manufacturers to meet clients face-to-face,

which often throws up new business leads.’



Along with direct marketing, expenditure on trade shows is growing

faster than business-to-business advertising. Business publishers have

been swift to take advantage of this trend, prompting Miller Freeman’s

acquisition of Blenheim Exhibitions in 1996, and the launch of a raft of

exhibitions such as Emap Business Communications’ new engineering event,

Civils 98, this May.



Conferences can also form a valuable role for clients, providing they’re

attended by a certain level of delegate and the issues under discussion

are well researched beforehand.



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