While it has been a nightmare year for the dotcoms, the picture in
the online business-to-business market is not nearly so frightful.
Demand for business information remains strong and the web is
unquestionably a speedy, efficient channel through which to supply
Consequently, there is a steadiness to the business sector that dotcoms,
which must deal with waxing and waning consumer appetite for e-commerce,
must find enviable. Moreover, while the dotcoms have the added cost and
complexity of fulfilment - the delivery of goods to the consumer's
doorstep - to worry about, publisher-owned business sites for the most
part provide data or facilitate transactions rather than focusing on the
shipment of products.
Yet although the business publishers are working in a less fickle
environment than the consumer-oriented dotcoms, they do not have the
luxury of standing still. Expectations of online business offerings
continue to grow. In some categories, it is no longer merely enough to
provide market news and analysis.
There is now a trend towards online exchanges that simplify the buying
and selling process and cut down on costs. In order to put these in
place, some publishers have formed partnerships after reaching the
conclusion that alone they do not have the capabilities necessary to
make transactional sites viable.
'The publishers are coming round to the idea that they cannot do it all
themselves,' David Worlock, the chairman of Electronic Publishing
Services, says. 'They need to ally themselves with customers. Their
content is only important if it is accessed in a context where large
groups of buyers and sellers are at work.'
EPS is a specialist consultancy providing research, information and
analytical services to business publishing groups. Worlock takes the
view that the online business market has already gone through four
phases of development.
First, the business publishers began putting their content online.
Second, then pure-play e-commerce operations sprang up with the
objective of launching e-marketplaces. Third, as some of these failed,
groups of large buyers and sellers got together to create their own
online marketplaces. And finally - the stage we are at now - publishers
have come back into the frame by forming joint ventures with groups of
buyers and sellers.
The advantage of this model is that publishers can bring their strong
brands, databases and news-gathering facilities to the party, while the
participation of major buyers and sellers provides the critical mass to
kick-start online trading.
A good example of this is Emap Digital's Construction Plus, which
launched in January 2000 and has become the most-visited construction
internet site in the UK. Not only does the site leverage content from
Emap's extensive portfolio of offline construction media, including
Architects' Journal, Construction News, New Civil Engineer, Interbuild
and Glenigan, but through partnerships with companies such as the
leading builders merchants Travis Perkins and Wolsely, it is able to
provide a heavyweight online trading option. At the end of last year,
Construction Plus was chosen as 'Best Internet Business-to-Business
Company in the UK' in Internet Business magazine's Internet Business
Meanwhile, in the case of its online dealer-to-dealer car-auction site
CAP, Emap acquired a specialist software company to give itself the
necessary e-commerce capabilities.
'We've done quite a lot of strategic thinking about the characteristics
of the different spaces we are in,' Luke Alvarez, Emap Digital's chief
operating officer, says. 'For example, we have 'companion sites', where
they provide online content and sit alongside the offline brands. But
there are some areas where the site can evolve into an exchange.
However, it can be hard to make money on exchanges per se, so a more
sustainable model is to reverse engineer into the workflow of an
industry. And sometimes you have to partner up to do that.'
Reed Business Information, like Emap, has also brought in partners where
it has made sense to do so. Last year it relaunched EGPropertylink, a
sister site to the online version of its commercial property flagship
Estates Gazette Interactive (egi). While egi uses a subscription and
banner advertising model to make money, EGPropertylink is devoted to
advertising commercial properties for sale. Basic listings are free but
a charge is made for including more comprehensive information such as
images, location maps and floorplans.
Interestingly, although egi is fully owned by RBI and now has 90 staff,
EGPropertylink is only 50 per cent owned by the publisher with the
remaining equity split equally between the leading commercial property
In a similar vein, RBI's Computer Weekly website is also part-owned by
an external partner. 'Old-style Reed never gave anything away,' Worlock
says. 'This shows how important partnerships have become.'
Egi's electronic publishing director, Jim Muttram, adds: 'We're starting
to work out how to integrate the relevant egi information with the
property listings information to provide a fuller service.'
Later this year Haymarket, the publisher of Campaign, is to go live with
Brand Republic, a website leveraging content from its leading marketing
and media titles. Brand Republic's business development manager, Nick
Molden, denies it is a riposte to Centaur Communications' MAD website
that similarly aggregates content from across the spectrum of its
Instead, Molden asserts, it is intended to offer advertisers a 'coherent
online recruitment strategy' and provide useful services such as a
research facility. Centaur, for its part, is to launch a new
media-focused portal, newmediazero, in addition to its broader MAD
Whatever the model they have chosen, it is clear that most publishers
have now reached the conclusion that if they are to make money from the
internet they must offer more online than the content of their business
As Future Publishing's internet director, John Weir, puts it:
'Replicating the magazine online would be futile. People use the web for
different things. It has more of a sense of community and there's an
immediacy you can't get in the pages of a magazine.'
IS ONLINE REVENUE FOR BUSINESS PUBLISHING STILL BOOMING?
PETE ROBINS - director, Beyond Interactive 'I don't think it's near its
potential yet. The number of business publishers realising they have
assets that can migrate to a digital market is obviously on the up. For
the right product, the audience is reachable via digital media. Quality
products will survive and flourish especially at the earlier stages of
the business-to-business market development. Audiences will follow
useful products and where there's a quality audience there will be
money. Consumer-oriented digital advertisers and marketers are turning
their attention to the business market in attempts to make best use of
their existing infrastructure investments.
'This is good news for the business guys if they can deliver the quality
products that are required. However, I suspect that many of the
potential business advertisers will not be anywhere near ready to
evaluate their digital marketing efforts - even though they think they
can - and that could have a detrimental effect at a later stage.
Potentially, the most challenging aspect for these business publishers
might be their ability to be flexible enough to cope with the rigours of
unrealistic digital expectations. If they can handle this then their
immediate future should be rosy.'
LUKE ALVAREZ - chief operating officer, Emap Digital
'We're pretty bullish about it. There's been all this stuff in the press
about the so-called slump in online advertising, but most of that has
been confined to the consumer space. In any case, even the most
conservative projections are still talking about growth of 40 per cent
and we're happy with that. There's a move by the buyers and sellers of
business-to-business advertising to make more sophisticated media
offerings. It's not all about serving banners and buttons. It's become
about doing cool microsites and sponsorships and that sort of
ILANA ABRAHAMS - business director, m digital EMEA
'The environment has changed, but not necessarily in a negative way. We
see that there is a need to explore other opportunities than banner
positionings. We're looking more at content integration and larger
partnership deals. Mostly, we're working with fewer sites but doing more
with the sites that we have decided to pursue a relationship with.'
CLAIRE BUTCHER - media director, Ogilvy Primary Contact
'Online has just become part of the portfolio of media solutions for
clients; it's settled down to yet another tool in the kit. Some business
sectors are far more sophisticated than others. IT people can be online
a lot but other people in business are not on the web all the time.
'So it's horses for courses. Now things are settling down after the
initial rush to go online, maybe some of the areas have been a bit
slower to take off than the publishers might have hoped. A site has got
to be good and relevant; it's not enough just to be there.'
GARETH PASK - media operations director, Engage
'There's still tremendous growth to be had. One of the big problems is
that business-to-business advertisers are still trying to get to grips
with how it works. That's because it's different to business to
consumer, where people often buy on impulse. With business to business,
people are often looking for something and go online to do some
research, then go offline and think about it for a while.
'So it's a case of advertisers and agencies coming to terms with how
online business advertising can be effective and not judging it in the
same way as they judge consumer advertising.'
FAITH CARTHY - buying director, i-Level
'We're definitely in a transitional period. For the business sector, as
with the internet as a whole, the real truth lies midway between the
prophets of doom and the seekers of the holy grail, although the former
seem to shout louder these days. Online ad revenue in the business
sector is still growing at a very healthy rate. But there has been a
period of adjustment that has seen CPM rates come down.
'This is partly a result of advertisers having more learning and
experience available to them with which to gauge the real contribution
online activity makes to their business. Partly as a result of unsold
inventory due to a proliferation of business-to-business sites, many of
whom are claiming to deliver the same audience - SMEs seem to be the
'next big thing'.
'Those sites that have invested in understanding their audience and can
provide advertisers with evidence of their users' 'qualifications' will
fare best, especially as people re-evaluate the contribution online
activity can make in the broader marketing context, such as growing
brand awareness. This could be the real key in this sector, as the very
nature of most business-to-business offerings requires a more complex
communication than a response to a banner.'