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Published: August 27, 2009

 
 

Reinventing Print Media

The ABM study demonstrated that companies that are further along either of these two transformation paths are outperforming their industry peers in revenue growth. In 2007, the last full year of data incorporated in the study, leaders along these two paths grew at double the average rate for B2B media. And they enjoyed higher growth in their core print advertising revenues as well. This is consistent with the experience of our media clients; providing marketing solutions enables them to tap into the broader marketing budget, while also gaining a larger share of the paid media budget.

Lead generation is a critical building block of the new model. Google has created new expectations for marketers, who are looking to focus spending on marketing activities that move consumers closer to the point at which they make purchase decisions. At the same time, paid search and ad networks provide a cost-effective way for marketers to drive traffic to their own private-label media. Building a broader set of solutions for marketers provides an opportunity for media companies to compete more on their own terms with search and ad networks. They can leverage a more engaged and premium relationship with their audiences, obtain deeper insights into consumer behavior, and enhance their strength in developing content that reaches consumers and serves their interests. Publishers also have an opportunity to capture marketer spending both from paid media advertising to help marketers build their brands and from marketing solutions that help marketers build their own private-label media.

Among print media companies, two players that have innovated new models very successfully are Meredith and IDG. Meredith has built a marketing solutions business that is estimated at more than US$200 million in revenues, fueled in part by multiple acquisitions of targeted digital agencies for custom content creation, database marketing, and word-of-mouth campaigns. IDG has also reinvented itself as a marketing solutions business, migrating its business to digital and lead generation at a rapid clip and reinvigorating growth and profitability. Both companies capture revenues from a mix of their own premium environments and the private-label media that they build on behalf of clients.

Like the B2B media companies represented in the ABM study, consumer media companies can follow transformation paths that both move beyond traditional advertising and tap into new revenue streams that come from readers rather than marketers. For example, the Harvard Business Review, the Wall Street Journal, and the Economist all generate meaningful revenue from selling reprints and repackaged content. This is a greater challenge with consumer media; readers will typically pay only for content that is hard to find elsewhere and difficult to replicate or copy. Some consumer publications such as Consumer Reports and the Zagat guides have overcome consumer reluctance to pay for content online by establishing their credibility through unique research that can’t be found elsewhere on the Web.

But some new solutions are emerging. For example, many new sites take advantage of consumer-oriented “data mining”: As people track the calories they eat, trips they take, miles they run, or money they spend, magazine and newspaper Web sites have an opportunity to help their readers make sense of this data. Media companies will also find new ways to brand themselves as community- or data-driven hubs. If they can’t charge directly for membership, they can charge for ancillary benefits that save people time or build their status or connection. As Chris Anderson points out in his book Free: The Future of a Radical Price (Hyperion, 2009), online role-playing games like Club Penguin allow people to join for free, but charge for perks that make it easier or more fun to play. Media sites can do the same if they provide utility to consumers along the path to purchase. To date, however, media companies have lost the lead to marketers who have built private-label media.

 
 
 
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Resources

  1. Booz & Company, “A Roadmap for Profitable Revenue Growth:
    ABM Top Management Meeting,” November 2008: Research report on business-to-business media; see the ABM’s Web site.
  2. Booz & Company, “Marketing & Media Ecosystem 2010: ANA Annual Meeting CMO Roundtable,” (PDF) October 2008: Presentation detailing a study Booz & Company conducted with the ANA, IAB, and AAAA.
  3. Matthew Egol, Leslie H. Moeller, and Christopher Vollmer, “The Promise of Private-label Media,” s+b, Summer 2009: Marketer-owned content is an influential factor in shaping the new media environment.
  4. Matthew Egol and Christopher Vollmer, “Major Media in the Shopping Aisle,” s+b, Winter 2008: Overview of new marketing initiatives in retail locations showing how one corner of the ecosystem is being transformed.
  5. Leslie H. Moeller and Edward C. Landry, with Theodore Kinni, The Four Pillars of Profit-Driven Marketing: How to Maximize Creativity, Accountability, and ROI (McGraw-Hill, 2009): Detailed guide to practices and organizational processes needed to implement marketing metrics and increase accountability for spending.
  6. Christopher Vollmer, “Digital Darwinism,” s+b, Spring 2009: Marketers, media companies, and advertising agencies are competing in new ways and forcing each other to evolve.
  7. Christopher Vollmer, with Geoffrey Precourt, Always On: Advertising, Marketing, and Media in an Era of Consumer Control (McGraw-Hill, 2008): How the digital age has reshaped all marketing imperatives and the industry as well.
  8. Mediaite Power Grid Web site: One model of new metrics for print media impact.
  9. For more business thought leadership, sign up for s+b’s RSS feed.
     
 
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