THE E-BUSINESS: If business publishers are to make the most of the internet, they must go well beyond the online magazine model. The future lies in partnerships that facilitate online trading. Robert Gray reports

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

it.



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

Awards.



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

agents.



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

marketing titles.



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

site.



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

magazines.



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

thing.'



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.'



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Digital marketing executives oversee the online marketing strategy for their organisation. They plan and execute digital (including email) marketing campaigns and design, maintain and supply content for the organisation's website(s).