Posted by bernardlunn in B2B Media, Globalization, India, Online Advertising.
American Business Media firms have a big opportunity to globalize. There is no other country that has a large enough market to support most of the niches that make up the 1,000 titles in the B2B Media world. So American B2B Media firms are the only ones with the scale and brand to go global in most of these niches. The question is how to take this opportunity.
The traditional answer has been licensing. That was the right answer for a print-centric world. You needed a local partner that understood the local nuances of content, circulation, production and advertising.
However the print economics in some of these markets are challenging. Take India as an example. That 300 million middle class is an enticing market and the opportunity in consumer publishing is growing fast; this is is country where new Newspapers are starting up! However B2B makes up only 1% of the media market and 50% of that is within IT. Advertising rates are far lower than in the US and with print costs pretty similar it is hard to see the economics working out.
However online it is a different story. With an almost zero cost per additonal online subscriber, the gross margins look good. Many Publishers tell me that they get a lot of traffic internationally and they know a lot of smaller vendors who want access to their US audience. This is not just classic English-speaking markets (UK, Canada, India, Australia, New Zealand) as the “business class” globally tends to speak English and seek out content from US based sites.
With User Generated Content (UGC) techniques it should be relatively easy to localize content; but even without this there is a big market as markets globalize.
Currently many Publishers are in reactive mode. They know from the weblogs that international visitors are coming but they don’t know enough to really sell that audience to advertisers. This requires a more proactive global audience development strategy.
Posted by bernardlunn in B2B Media, Events, social networks.
According to the numbers from ABM, face to face events are booming, overtaking print as the single largest source of revenue for B2B Media. The ability to connect online, using email, webcasts and social networking seems to drive more need for face time rather than less. This makes sense. In the Attention Economy, face to face attention is where the real scarcity value lies.
The Events business is often described as “trade shows and conferences”. It is possible that these two parts – trade shows and conferences – are impacted differently and one maybe more healthy than the other. Conferences, seminars and other events where the attendee pays to receive high quality content from expert speakers and the opportunity to mingle with their peers are one proposition that is doing very well. The fact that much of the same content is available online does not detract from the networking value of being there.
These conferences are often linked with trade shows. I wonder how the trade shows part of the business is doing. I have noticed the following as both an Attendee and and Exhibitor. As an Attendee:
1. I can very easily get the same or even better data online. With Blogs I can read what the CEO of the vendor is thinking, rather than getting a rehearsed sales spiel.
2. It is quite simple to set up an online demo, teleconference and even video conference when I want more information.
3. The networking advantage comes from the Conference, not the trade show.
As an Exhibitor, I have noticed that the trade show is often slotted in for the lunch and coffee breaks and that the Attendee traffic is getting weaker. This maybe a reflection of what I am seeing as an Attendee.
What can be done to make the trade show part of Events more relevant in the age of Internet and social networking? I can see a few interesting possibilities:
1. Scheduled meetings with senior people and/or specialists from the vendor. This works well for both Attendee and Exhibitor. It does require a more sophisticated registration process that is linked to a more segmented audience database.
2. Using social networking techniques to find who else is attending that I would like to meet at the Event and a mechanism to make connections at the event itself. This can use a mix of wireless technology as well as coordination by the Event organizer.
Posted by bernardlunn in Globalization, India.
Coming back from a week in India, I am reflecting on how different business feels like when GDP growth is in double digits. This is very different from simply growth in asset valuation (i.e. stock & property prices). This is the whole economy growing at 10%. It is certainly not just outsourcing, in fact that is not where you saw the excitement. Think Eisenhower America building the physical infrastructure that enables a mass-scale consumer economy, but at Internet speed.
I have been doing business in India since 1994 and this boom looks very different. One acid test I have is looking at the Billboards on the way into Mumbai from the airport. In 1994 they were advertising stock exchange shares and my instinct was bubble and that proved right. In the shortest bubble in history, for a about 3 months in late 1999, you saw Dot Com billboards. Now it is what you would expect for billboards, consumer products and services.
Looking at the newspaper on the first day, two stories jump out:
One. A company called Suzlon Energy, making alternative energy from massive wind power farms, buying a $10m SAP implementation from IBM. Another story relates how Suzlon is a huge success story for American investors through funds such as Citi and ChrysCapital. This is certainly not another outsourcing story.
Two. An article about how Indian entrepreneurs and old family business owners are more willing to sell out. This is leading to capital formation within India, liquidity that is going
into Indian based VC/PE funds as well as angel investing.
Now a quiz. I am eating airplane food that is fresh and tasty using real cutlery and a cloth napkins, served by 4 cabin crew in a two aisle plane and they seem genuinely pleased to serve people. My personalized entertainment system has a huge choice of movies, news, games, music. Am I on long haul business class? No, this is domestic Economy on Jet Airways from Delhi to Mumbai. The founder CEO of Jet, Naresh Goyal, goes down in my book as one of the truly great entrepreneurs. Building this kind of consistently high levels of service in a country where infrastructure is a challenge and where large institutions have typically treated customers as annoying pests is a massive achievement. Jet has set the standard that has forced the other airlines to follow. Now the airports are starting to get revamped as customers come to expect the same quality on the ground.
Posted by bernardlunn in B2B Media, Online Advertising, social networks.
Unless you have been meditating in a cave in the Himalayas, the hype about Facebook has probably come to your attention. A 23 year old turning down a $1 billion offer has a certain ring to it.
What about those of us who are paying for the kids who are using MySpace or Facebook? Is it possible for traditional B2B Media firms to make money from creating community sites?
I have heard the complaint that “it is easy enough to build the sandbox and people do come and play, but how do I make money from their play?” This is a tough question. In a real operational business, any project has to meet stringent hurdles for Return On Capital. There is not the luxury that some start ups have of just building traffic and then later figuring out how to make money. However the investment required is not great and, if there is money to be made, it is almost certain that some start-up will be looking at doing it in your market; so ignoring the question is not a serious option.
I see two big positives and two big issues (that may be negatives or maybe resolvable). First the two positives:
- Positive # 1. The cost of entry is low. Setting up a site is inexpensive and traffic does build virally if you build good features.
- Positive # 2. Users who contribute, share, comment, communicate are more loyal (aka “sticky” or “engaged”) than people who only read.
The two big issues:
- Issue # 1. These are not environments for grown-ups doing business. Do you want your readers hanging out in a place that looks like this? (Actually this is my brother in law and he is a really good wholesome guy, but you get the point). This is pretty easy to fix, it is really just a style/design issue.
- Issue # 2. CPM rates and click-throughs are low. This is OK if you have 30 million users (Facebook) but not if you have a controlled circulation audience around 50,000. You need every one of your community to count. They are important, influential people and not college kids with budgets for books and beer, so the potential is there but the $ per person must be way higher.
Google makes tons of money because they create a “database of intentions“. When you search for something you reveal your interest. This is not true in social networks. You don’t even have context to help target the advertising. This is like selling advertising on email systems. You are too consumed with writing or reading email to look at ads and if the provider serves ads that are based on what you are writing your privacy is invaded.
There is a possible direction for this that does make sense for B2B Media which tackles both big issues. First, lets drop the term “Social Networking”. Your readers (to use a terribly old-fashioned term) are not interested in dating (at least they don’t equate your brands with dating). They use your sites for “research”. Which is rather more than Search. (Re)Search is what we do after Search.
The best Research data comes from your community. If you build a “Research Network” (as opposed to a “Social Network”) that enables this to happen you will deliver value to your community and you may be able to create a “database of intentions” that can be monetized.
There is an excellent book called Wikinomics, How Mass Collaboration Changes Everything that I am currently half way through. I recommend it to anybody who thinks this is a passing fad for teenagers. There are complex issues to think through related to editorial control and the authentication of posters. In niche B2B markets, the totally open model of Wikipedia is unlikely to be ideal. A more balanced approach, between total editorial control and total open model will need to evolve.
