Two years after the launch of a for-profit association intended to transform his company and, even more ambitiously, transform the way b-to-b media companies serve their markets, Hoyt Publishing Co. ‘s In-Store Marketing Institute has more than 350 paid members and will hit 400 by the end of the year, president Peter Hoyt says.
The number is significant, he adds, because it is an indication that Hoyt’s concept is a success. And if it works for Hoyt Publishing, then there’s no reason that b-to-b publishers in other markets shouldn’t also consider the approach. “The real issue wasn’t whether we could sell initial memberships,” Hoyt says. “The critical question was whether we could keep them. We are enjoying a renewal rate of between 75 to 80 percent and we ultimately want to get to 900-1,000 memberships;I think the market is at least that big.”
A Logical Progression
For Hoyt and a growing number of b-to-b publishers, the institute model is a logical progression in the school of thought that says publishers should surround their markets with products and services. Here, the publisher essentially starts an association and because of its for-profit nature can hire skilled full-time staff to gather, analyze, interpret, edit and present relevant information. Says Hoyt, “The association model depends on volunteer help. It worked better at a time when people had more free time. Publishers are always better at gathering and disseminating information, so this is just leaning on that strength.”
In markets where lobbying is not important, he adds, a for-profit association becomes a more effective way to produce and distribute information. “There is no reason for this to only be the purview of a not-for-profit,” Hoyt says. “Ultimately, it might also be the model for a profitable Web site.”
CMP Media and 101communications are two other publishers with institutes;CMP has three and 101 has two. In July, Manhasset, New York-based CMP acquired the 20-year-old Incoming Calls Management Institute, which serves corporate call centers. “The most important thing about institutes is that they bring an intimacy that magazines tend not to have,” says Philip Chapnick, vice president of CMP’s applied technologies group. “The institute has to be maintained as an organic unity. The services all fit together.”
101communications, the Chatsworth, California-based IT publisher, has the Data Warehousing Institute and the IT Compliance Institute. The data warehousing business, or TDWI as it’s referred to by 101, is established (created 10 years ago) and big: 101 CEO Jeff Klein says it accounts for more than 10 percent of the company’s revenue. Membership is fee based;$250 per year. “Institutes force you to think more broadly about the audience you’re serving,” Klein says. “You can produce special publications, research, certification;all this flows naturally out of the business model. And revenue can come from books, research, conferences, events, seminars, online training, certification.”
Which Markets Are Appropriate?
101 evaluates which markets might be appropriate for an institute based on their complexity. “We looked at TDWI to see what attributes it had and while this may not be true for other industries, in our case you have to be something that is really complex,” says Klein. “If it’s stuff you can get elsewhere it may not be as compelling.”
On the other hand, “It would be a mistake for b-to-b publishers to slap the word ﾑinstitute’ onto other things they already do and expect to be successful,” he says.” They have to really rethink the market and the content for the market much more broadly.”
Hoyt’s In-Store Marketing Institute was launched in mid-2003 with the support of four founding ﾑbenefactors’ who put up a combined $250,000, and 12 founding members, who each put up $15,000;good for five years in advance. The one-year cost of membership is $2,950 for 10 companywide seats and $950 for individual memberships.
In its most literal definition, the In-Store Marketing Institute is an online information-sharing co-op for the point-of-purchase advertising industry. Content is pulled together from 15 years of Hoyt Publishing’s print magazines, POP Times, and POP Design. The site allows members access to 10,000 images, and 3,000 case studies of displays and point-of-purchase tactics.
But in a larger sense, the institute has redefined Hoyt Publishing. “This institute becomes a beautiful kimono that we wrap around our shows and magazines and conferences and we present it all as one integrated thing,” says Hoyt.
The move was not cheap. The In-Store Marketing Institute has three-to-four editors dedicated to seeking new research, identifying case studies and producing content for the site and associated newsletters. “There was a lot of overhead,” Hoyt says. “For these first few years our existing products were financing the launch of the institute, but it has already become very clear that in a year or two the institute will be the horse that is pulling the cart.” Ad sales are up and the company has relationships with critical players in the market;such as Procter & Gamble;that go much deeper than in the past. “Is that the institute or the overall health of the market?” Hoyt asks. “I don’t know how to separate them, but the whole package is a lot more attractive to a larger group of people because of the institute.”
Why So Few?
So if institutes are such a great idea, why don’t more companies create them? After all, in an era of integrated media, they’re the ultimate expression of the discipline. And they add revenue, bolster credibility and bring your brands closer to the reader.
CMP’s Chapnick says it’s because they require a dramatic shift in mindset. “It takes an incredible level of passion and knowledge for an industry that is not common,” he says. “And it is very hard for media companies to think of themselves that way;they say ﾑI’m a magazine, or I’m a trade show, or I’m a Web site.’ They really need to take that global and intimate sense of their clients. I think it’s a barrier to entry.”
For his part, Hoyt says any publishing market is potentially one that will accommodate an institute. Any market with a less-than-stellar association is one where you should be sizing up the opportunity,” he says. “Don’t go at it directly;it is too politically sensitive, but go at it from an angle;try to find the unserved need.”