Northstar Travel Media Launches Marketing Solutions Division
CEO Tom Kemp: "The idea is not to shift marketing dollars from advertising."
With the American Business Media Annual Conference set for next week with an agenda devoted almost exclusively to the rise of marketing services, Northstar Travel Media is the latest b-to-b publisher to announce a new dedicated marketing solutions division.
The new group will be led by vice president of marketing solutions Michelle Rosenberg (who previously served as publisher of Northstar’s TravelAge West) and will focus on five key areas of client support: technology platforms; events, research, creative services and social media management.
"In the middle of last year, the executive team at Northstar looked at how we were handling marketing services within each individual brand," says Rosenberg. "We found some synergies and opportunities to expand the range of services. That combined with investments we made in different assets-content, tech or research-allows us to look for cross-brand opportunities and delve into areas outside traditional media and marketing."
Currently the group includes Rosenberg and a dedicated project manager, and staffing will scale as the business grows. Northstar Marketing Solutions also leverages a strategic tech partner (Decision Counsel) to help execute programs. "I’d say 60 percent to 70 percent of our early pieces of business are tech-related," says Rosenberg.
The real ramp-up will occur in the next 18-24 months and the Marketing Solutions group has the potential to be a $2 million to $3 million business within two to three years, according to Rosenberg.
Making It Work
Earlier this month, Penton Media launched its own new marketing services division while Summit Media debuted a dedicated custom group.
Like Northstar, many publishers are taking services they’ve historically offered as standalones (custom publishing, Web site development, lead gen) to the next level under the umbrella of a dedicated group. While publishers can tap existing resources and brand-related salespeople can funnel prospects to marketing services, it’s a different enough business in terms of sales cycles, lead times and tech development that a separate approach is warranted.
"Because it’s so heavily custom, we don’t walk in with a line card," says Rosenberg "We say, here are our capabilities, what needs do you have? The biggest difference between pitching product advertising is a much longer cycle. These are complicated products. It comes down to how we’re leveraging our content, technology and audience-outside of traditional media solutions, it’s a much more complicated dialogue."
Summit, which has hired several new staffers and has seven full-time people as well as multiple freelancers in its custom group, is looking at an investment of several hundred thousand dollars "to move from where we are to where we want to be in the next six months to a year," says vice president and group publisher Joe Angel.
The publisher takes a minimum quarterly retainer of $2,200 (which can go up to $7,000 or $8,000), but prices vary widely for its turnkey content creation services.
Summit has seen online grow to about 25 percent of the overall portfolio and expects to bring another 15-20 percent in on bottom line growth for custom, according to Angel, who says the company will probably be handling six to 10 custom projects at any one time. "Projects are fewer and farther between but they are substantial, and in some cases, we’ve incorporated print options as well."
With so many publishers competing with each other (and with agencies) over marketing services, real commitment from both management and staff is required. "I believe success will be defined by a commitment of resources and consistent commitment of the initiative from the top management of the organization," says Northstar CEO Tom Kemp. "I know from our own experience that there are inherent challenges as publishers/brand managers focus on their specific goals and may see a corporate initiative as a competitive threat to their budget objectives. Assuring that there is alignment of interests among the brand managers and sales teams with the objectives of marketing services is incredibly important. That will likely translate to compensation plans and accounting of revenues and profits for incremental marketing services revenues."
Marketing services may be more successful in organizations that focus on specific sectors and have leadership brands within those sectors, Kemp notes. "Sector focus provides much more leverage of content, databases, domain expertise and relationships with major suppliers," he adds. "Sector concentration may be a reason that the early success has been with publishers such as IDG, Hanley-Wood, and UBM."
Another key factor is to offer more than traditional custom publishing programs to really drive incremental revenues. "The idea is not to shift marketing dollars from advertising to marketing services but to tap into new budgets, previously unavailable to publishers," says Kemp.