How a Whole Swath of B2B Media Companies Got Wiped Out
And why the companies emerging from the conflagration are full of promise.
Reflect for a few minutes on the amazingly changed profile of B2B media. The first thing that’s apparent is that all of the large companies are gone. Fifteen or so years ago, there were many companies in the $300 million to $600 million range. There was VNU, Advanstar, Ziff Davis, IDG, Intertec Publishing, Penton Media, Cahners Business Information, McGraw-Hill, CMP Media, Hanley Wood, Miller Freeman, and more.
Most of those companies are gone. Penton is still a company of scale, but Hanley Wood is much smaller. Cygnus, VNU, Cahners, CMP, Intertec, and others are gone. IDG and Ziff have become radically different. Advanstar lives on as a unit of UBM.
UBM is one remaining giant, and has absorbed several media companies, but its main focus is events.
On the far opposite end of the spectrum, B2B media is in a period of great fluidity in the creation of new, much smaller, mostly digital companies. Among these are IndustryDive, Praetorian Digital, G3 Communications, Breaking Media, Skift, SmartBrief, and many others. This is healthy for B2B.
But when a whole swath of companies — an entire economic tier — is wiped out, there's something existential going on. The underlying trends need to be understood.
“I had this same thought six months ago,” says Hanley Wood's CEO, Peter Goldstone. "A lot of the big holding companies have been broken up. They divested a lot of assets to smaller capital platforms. Family-owned companies. It’s almost like the way it used to be in the old B2B world.”
Goldstone is not alone in recognizing this. Most of the experienced B2B executives who've gone through this industry transformation recognize it too, and can can usually put their finger directly on the cause.
"Your email struck me,” says Doug Manoni, CEO of SourceMedia. “You and I had this exact conversation in 2007 at an ABM event. We sat next to each other. It was already apparent then that the model was rapidly changing, but we weren’t sure what was coming. Private equity was pulling back. You could see this 10 years ago. There wasn’t the same interest level as there had been five years earlier."
So here’s what happened. Print media in B2B declined precipitously, but too many organizations kept print as their organizational focal point. Digital businesses didn’t make up for lost revenue. Private-equity ownership created debt that crippled the ability of many companies to invest and innovate. Tradeshows found new competition from corporate events. And marketers developed a new sophistication in databases, allowing them to communicate more effectively with their prospects.
Says Don Pazour, CEO of Access Intelligence (which owns Folio:): “Tens of thousands of pages are gone and hundreds of people are gone. CMP and Ziff had hundreds of millions of dollars coming from print. The digital replacement in their successors and competitors never got close to matching those dollars. Same is true in consumer. Remember the weeklies? TV Guide sold for billions at one point. On the event side, the PC Expos, the Comdexes, and other technology shows lost out to corporate events like Dreamforce. Finally, many companies brought lots of their spend inside to build marketing websites and content-marketing teams.”
Adds Manoni: "Traditional B2B markets have consolidated. In most of these markets there’s room for one or two information resources. [Note: It used to be three or four or more.] The whole B2B model is about niching out a niche. Many of these markets are too small to support a traditional ad-supported business model. And to shift from an ad model to a far more diverse model — those compounding requirements were overwhelming to many businesses. It broke their models.”
Goldstone is more succinct: “Debt and downturns. Everyone got whacked.”
The interesting news, though, is that the survivors have started to find their way, though at very different levels of progress, depending on the company. Now, true value comes from being able to combine content that engages audiences with research, data and marketing prowess, and deploy them in unison on behalf of a client. "The surviving businesses tend to be the better diversified,” Manoni says. "Subs, research, data and events. I still believe B2B serves a real purpose in the global economy. We are feeding information to every industry that drives the whole economy.”
As Goldstone says about Hanley Wood, the new model must be about "data that informs, media that connects, marketing that activates.”
It’s definitely a different world, Pazour says. “Sadly, one of the core products that we had has been disintermediated. But I firmly believe we will begin to see a shift of dollars back to branded digital products and events, as companies realize how expensive it is to do it themselves.” What’s more, he notes, “The clout of being associated with strong community brands increases reach and reputation, and the expense of keeping and developing leads for themselves becomes cumbersome and expensive. This trend will be accelerated in the next downturn."