B-to-B’s New Hope: Marketing Services
Creating a new solutions mix to turn marketing services into a real business.
American Business Media’s Annual Meeting, held in early May, took a single theme approach around the topic of marketing services. While the core of marketing services is based on many things publishers already offer (content, data, lead gen), it’s also a different business with longer sales cycles, sometimes lower margins, and a different sales and editorial mentality. It’s the latest example of publishers “chasing new money in a hurry,” according to Mitch Rouda, president of e-media at Farm Journal Media.
But publishers need to be wary of not just chasing yet another “answer” to the problem of crumbling traditional revenue models. In response to a FOLIO: article about content marketing last month [“The Content Marketing Revolution,” April 2011], Dan O’Connell president of agency Foodmix Marketing Communications said, “Publishers entering the agency world happens every decade with a different spin. It failed in the 80s, 90s and it will again. Why enter a business you don’t understand when your core business is bleeding? Wouldn’t a more powerful combination be for agencies and publishers to partner to meet the evolving needs of advertisers and their brands?”
Entering the Marketing Services World
For some publishers, acquiring their way into marketing services (in March, Penton bought online marketing firm EyeTraffic Media) may be the best option. Referencing the development of Meredith Integrated Marketing, Tom Stein, president and founder of b-to-b agency Stein Rogan + Partners, said it was based on six acquisitions and that former Meredith National Media group president Jack Griffin told him, “If we decided to do this in-house, we’d still be just talking about it.”
However, most smaller publishers don’t have the war chest for six marketing acquisitions (or spending $350 million on a digital agency the way Hearst did for iCrossing). For them, entering marketing services requires a mix of in-house development and strategic partnering. Northstar Travel Media last month announced a marketing solutions division based around two internal staffers (a VP of marketing solutions in former TravelAge West publisher Michelle Rosenberg and a dedicated project manager), and a strategic tech partner in Decision Counsel to execute programs.
The Northstar Marketing Solutions group 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.”
The Marketing Solutions Group has the potential to be a $2 million to $3 million business within two to three years, according to Rosenberg.
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.”
Summit Media Group also debuted a new dedicated custom media group (“custom publishing” is increasingly becoming a description that marketers can’t relate to—hence the rise of “marketing solutions”) with seven full-time people and multiple freelancers. Summit 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.
Summit 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.
Many of the services now falling under the umbrella of “marketing solutions” have previously been offered as value-added. “We need to change the nature of free with things like copywriting, consulting, white papers and surveys,” says Dave Newcorn, vice president of digital and custom media at Summit Media Group. “We charged one client $7,500 to put together a survey and send it. In any other kind of work, that’s consulting.”
Summit came up with a price calculator that deducts hard costs but also incentivizes salespeople to sell high. Part of getting the new custom group off the ground was a “lunch & learn” campaign in which Newcorn and his group visited 108 customers in 15 cities, explaining the concept of lead nurturing.
The publisher also did research identifying four stages of the buying process and what solutions to offer. They include:
Stage 1: Status quo—No projects. Customers should be addressed with best practices and industry trends.
Stage 2: Discovery—The customer knows they need a project but isn’t sure what to do. Here, white papers and Webinars are applicable.
Stage 3: Vendor selection. Here Summit presents customer testimonials, assessment tools in which prospects can enter data and increasing use of video. “For our market, they want to see the machines in action,” says Newcorn.
Stage 4: Short list. Vendor comparison charts. “Here, they need something downloadable,” says Newcorn. “A chart indicates they’re pretty far down the path. A boardroom PowerPoint is something junior execs can show to more senior, maybe less tech-savvy execs.”
The Summit proposal package includes a kick-off meeting with the content creators, written analysis and recommendations and a 12-month road map. “Now that we have the infrastructure to produce custom packages, we have to look at how we sell it,” says Newcorn.
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.
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.”
NetWorld Alliance has been doing custom publications for so long (at least 12 years) that they’ve become part of 70 percent of all client sales, according to president Tom Harper. “Special reports, case studies and white papers are part of our core business, whereas video, research and Web development are truly ‘custom’ for us because they require different people to deliver them,” he adds. “We are formally adding these new custom services after a year or so of testing them. And I don’t mean just testing their effectiveness for our clients—but determining whether we can handle the new types of projects with current staff, and finding out which outsources are reliable.”
The publisher is looking to partner with an agency. “Our goal is to find a single agency we can trust who becomes a pseudo-division of our company without having to buy them out,” says Harper. “We have to be smart about partnerships and margins. When you’re our size, the outsource is the key to making the whole custom thing work.”
Are Marketing Services Viable?
At the ABM Annual Conference, Andy Goodenough, CEO of Summit Business Media and Scott Vaughan, chief marketing officer of UBM TechWeb, debated the viability of marketing services. Goodenough was representative of most of the b-to-b publishing world today—a company that’s seen dramatic changes to its business over the last few years (Summit Business Media just emerged from Chapter 11 bankruptcy) and is taking stock of where to go next.
UBM TechWeb, on the other hand, has embraced marketing services and undergone a major internal shift to provide those services.
According to Goodenough, the original model for marketing services included these things:
• Sell advertising
• Track bingo card responses
• Offer up surveys
• List rental
• PR opportunities
• Reprint services
• Ad Plaques
• Sponsored supplements
And all the while, the sales executive is the principal entry point into the advertiser relationship. Now, however, the new model looks like this:
• Digital advertising
• Print advertising
• Lead tracking
• Marketing data
• E-mail messages
• Custom marketing
And the sales executive is still the principal entry point to the marketer relationship. “The new model,” Goodenough said, “looks a lot like the old model, except that the products are a little different.” Going forward, a key question is this, Goodenough said: “Are we media companies or marketing services agencies, and is there an orderly progression?”
In his case study, Vaughan described his approach, which he calls “Marketing-as-a-Service.” In b-to-b media, he said, marketers now have a whole new array of ways to listen, engage and connect, and the challenge for media companies is to align with these shifts. Marketers expect performance with guaranteed metrics, he said. They want deeper integration of their media spend with ROI and revenue. They want a single point of accountability and they want expertise and efficiency.
In 2011 and beyond, Vaughan said, b-to-b means no longer chasing customers and moving toward creating the next customer. Equally important, he said, is that media companies need to understand that it’s not about their own cool internal innovation, but rather, “what business my customers demand me to be in?”
The way UBM TechWeb handles it, he said, is by looking at its business as two distinct units. The business information unit fuels insights into technology decision making. This includes education and conferences, research and analytics, Web sites, newsletters, magazines and the like.
Marketing-as-a-service plays off the strength of the business information side and offers content development, communities, lead services and performance marketing. It guides buyers through a lead lifecycle and quantifies who makes which decisions. MaaS, Vaughan said, is not custom publishing, it’s not custom media, and it’s not integrated marketing. Instead, it’s a cluster of services built around four service areas and four distinct platforms. “For a fee, we’ll make your content perform better,” Vaughan said. “We call it MaaS because it keeps us focused on what business we’re in.”
The Return of Content
Content creation, long viewed as a cost center within traditional publishing, took some hard lumps in recent years, as the means of paying for that content—advertising dollars—eroded. The early days of digital media weren’t any better, as media companies quickly realized the revenue online just wasn’t enough to pay for content creation on any real scale. Aggregation, social media, user-generated content and licensing were looked at as ways to fill the content gap without breaking the bank (and still are).
However, the rise of marketing services has made publishers once again realize the need for original, quality content—both in serving marketing clients and attracting those clients in the first place through the publisher’s core brands. “What’s interesting is [clients] want our expertise as content producers, not our audience,” says Dave Newcorn, vice president of digital and custom media at Summit Media.
While publishers scramble to hire salespeople with an agency understanding of account management, agencies are looking for content experts. “You can’t have a social strategy without a content strategy,” says Tom Stein, president and founder of b-to-b agency Stein Rogan + Partners. “You can’t have a CRM strategy without a content strategy. Some days in my agency I feel as much like an editor as anything else.”