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Jim Casella, CEO
Reed Business Information
Beginning in the second half of 2004, Reed Business Information (RBI)
has been seeing modest growth return to its core magazine business in
most of its sectors.
Three key areas of focus for accelerating growth even further are:
1) new electronic product development;
2) international expansion
3) acquisitions to upgrade the portfolio.
We have embraced the increased emphasis on digital marketing and are
focused on growing our online revenue, both from existing and new products.
International expansion will help RBI take advantage of high growth opportunities in
various emerging markets, particularly in Asia and Eastern Europe.
Acquisitions will be focused on complementing our core business and
extending RBI further into the online and data spaces.
Based on what we are seeing in the market, we believe our strategy is taking us in the right
direction and positioning us well for the future. One example is in the
area of search engines. While some say that search engines are keeping
them up at night, we are embracing the search engine/cost-per-click
advertising phenomenon as an opportunity to launch new products.
Gordon Crovitz, SVP, Dow Jones and President,
Electronic Publishing Dow Jones & Company
For the next 12 months, we expect strong double-digit revenue growth as we
focus on making the most of an improving environment for all the
electronic publishing operations of Dow Jones, as well as on integrating
the half dozen product lines we have acquired over the past 18 months.
In terms of acquisitions, the Dow Jones Newswires unit has created a Financial
Information Services division, which includes a number of acquired
properties. We have added VWD, the leading German-language financial
newswire, to our roster of 10 local-language wires around the world, as
well as the Dow Jones Commodities service.
The MarketWatch acquisition was one of the largest Dow Jones has made in many years. Along
with the Wall Street Journal Online, MarketWatch makes Dow Jones the
largest publisher of proprietary business and financial news on the Web.
Each of these acquisitions so far has met or exceeded our expectations.
Challenges certainly exist. There aren’t strong indicators that the large Wall Street financial
services firms are replenishing the ranks of bro-kers and traders that
were thinned out over the past few years. However, at the same time, the
venture capital and private equity markets are thriving.
What keeps me awake at night? It is not so much the B2B information market, which I think will
continue to improve, but just how quickly the B2C market will grow. The
Online Journal and MarketWatch have both grown advertising revenues in the
30% range over the past couple of years. Despite these numbers,
high-quality online publishers, including Dow Jones, have still not fully
proven the remarkable value of online advertising to the advertisers. This
is partly due to the overselling of the online medium during the Internet
boom, partly residue from the fallout of the Internet bust and partly the
natural lag (e.g., cable tele-vision in the US) between a medium
attracting a valuable audience and attracting significant advertising
"Acquisitions will be focused on complementing our core business and extending our brands
further into the online and data spaces."
Online advertising delivers extraordinary value to advertisers in both the size and quality
of the audience and the unprecedented targeting opportunities. However,
I’ll sleep better over the next 12 months once the online medium begins to
get more of its fair share of marketing spending.
Richard Harrington, President & CEO
By developing information solutions that focus on customer workflows and making tactical
acquisitions, The Thomson Corporation has been able to tap into new
revenue streams from existing customers and enter adjacent markets.
In 2004, our revenue grew 9%, and we see more opportunities to grow in 2005,
during which we expect to meet our long-term target of 7-9% annual top-line growth.
Thomson operates four market groups, and in any given year some of our markets
grow faster than others. Our portfolio partially insulates us from ups and downs in a
particular industry. However, our overall growth target exceeds expected
GDP growth. To achieve our goals, we will continue to seek new ways to add
value for sub-segments of our existing customers and for customers in
More and more of our customers are migrating to digital solutions. Electronic products,
soft-ware and services now account for two-thirds of our overall revenue.
The pace of this digital migration also varies by market. For example, 98%
of Thomson Financial’s revenue is generated from electronic products and
services, whereas the higher education market is in an earlier stage of
its transition to digital solutions. While we pride ourselves on the
breadth and relevance of our content, high-quality content alone does not
guarantee sustained growth. Rather, it’s the ticket to play. Our recipe
for growth involves combining must-have content with software tools and
applications and with value-added services that help our customers be more
"Online advertising delivers extraordinary value to advertisers in both the size
and quality of the audience and the unprecedented targeting opportunities."
In 2004, Thomson made several significant acquisitions, including TradeWeb,
CCBN, BIOSIS, Information Holdings Inc. (IHI), KnowledgeNet and Capstar. These
acquisitions helped us to expand our offerings and enter adjacent markets.
For example, IHI and BIO-SIS contribute significantly to our new Thomson
Pharma solution for pharmaceutical researchers, while TradeWeb gave us
access to new customers in the fixed income segment of the financial
In 2005, we anticipate a lower level of acquisition activity, as we fully integrate our
recent acquisitions. All of our market groups achieved organic growth last year,
and we expect that organic growth will further accelerate as we leverage
our increased size and skills and, importantly, continue to focus on
workflow solutions for our customers. It’s not the constant changes in our
markets that keep me awake at night. Every market discontinuity creates
new market opportunities that we are prepared to pursue. What keeps me up
at night is worrying about people. Recruiting, developing and retaining
talent is the key to sustainable competitive advantage, especially in our
industry. Over the past couple of years, we have placed a concentrated
effort into enhancing our talent management process, but you can never get
too good at that.
Chris Brown President & CEO,
Institutional Investor Euromoney Institutional
Acquisitions vs. organic growth expectations
In the past 18 months, Euromoney has made a number of significant acquisitions in
the hedge fund sector, the financial conference business and the online data aggregation
business. All of these have been very successful. We strive to balance
growth through acquisition with organic growth, and we are now seeing a
recovery in our financial publishing businesses after a number of
difficult years. Our challenge is to contain costs so that this recovery
can have an impact on profits. The challenge for acquisitions is the entry
of private equity bidders who have a more generous valuation model than
our own. "Recruiting, developing and retaining talent is the key to
sustainable competitive ad-vantage."
Factors limiting achievement of
Attracting and keeping talented people is always a necessary condition for achieving
growth. We have a very attractive compensation package that will reward all of our
senior managers handsomely, based on growth projections and their
contributions. Of course, we need to implement quality risk management and
maintain cost controls.
Impact of digital marketing and information flow on your business The impact of digital
marketing and information flow is immense and growing every day. We are
being asked by our clients whether people in our industry still read
magazines. Of course they do, but we are coming out with new digital and
electronic products and marketing solutions every week. It is both
exciting and challenging. Internally, we are find-ing that communication
with employees from around the world is far quicker and easier. Decisions
are made more quickly and with better communication of our objectives.
2005/2006: Growth, Flat or Decline
We are looking forward to growth over the next few years. Our
senior management is driven by the potential rewards from strong growth,
given the new compensation packages.
Nothing keeps me awake at night.
Charles Townsend, President & CEO
Conde Nast Publications
At Conde Nast, we expect consumer magazine advertising to continue growing in the mid-single digit
range through 2005 and 2006, in line with the overall economy. We plan to
achieve company growth objectives over the next three to five years
through both organic growth and external expansion.
In this competitive deal environment, where there are few properties of scale to acquire, we are
emphasizing new title launches and brand extensions.
We will also pursue opportunities to grow by capturing a share of content delivery via the
Internet. We believe that the Internet will be an increasing area of focus
for all traditional publishing companies.
Helen Alexander, Chief Executive Officer,
The Economist Group
For international media businesses, the opening years of the 21st Century have been
distinctly uncomfortable. First, there was an advertising recession, then the SARS
epidemic and now the weak dollar.
"We would expect the fastest growth to come from new Asian markets and digital media…"
However, the underlying position of The Economist Group continues to improve: we
have strong brands, excellent insight into our readers and the ability to offer
clients high value, tailored offerings across a broad product range. As a
result, we are seeing strong circulation growth, and ad revenue is growing
faster than the recovering market.
As far as acquisitions go, the weak dollar should make dollar priced assets cheap for
Europeans, but at the same time, dollar denominated profits are worth less.
Additionally, valuations for quality media businesses will continue to be
high (and may get higher). Over the midterm, we would expect the fastest
growth to come from new Asian markets and digital media, so this is where
we would anticipate seeing most activity.
Joe Loggia, CEO
Barring any uncontrollable external event, we anticipate that the industry’s current
growth prospects will continue to improve steadily.
2004 was a successful year for Advanstar, both financially and in the progress we made in
achieving our strategic objectives. We anticipate continuing to achieve
success throughout 2005.
However, in order to continue growing, media companies must respond to the
following industry challenges:
- Keep pace with customer expectations for new and improved products/services that
can be delivered according to their preferences;
- Provide superior customer service at all levels of the organization;
- Optimize and prove return on investment for customers; and Maximize operating efficiencies.
Advanstar will build upon its core mission: "Connecting our customers with
theirs." Our strategy is to continually redefine integrated marketing
beyond the traditional B2B model. This helps us develop innovative,
quality products that fill key niches along the communication supply chain
in our key markets.
Advanstar has been able to competitively and profitably improve its position in its key
markets by focusing on: operational excellence; enhanced internal processes; and a
culture dedicated to superior customer focus.
In the past year, we have made significant investments in the quality of our publications,
the content of our conference portfolio, our trade show environments, and our
capability to deliver multiple electronic media products to meet the
ever-changing needs of our customers.
On the acquisition front, we are pursuing tar-gets in our select market groups that improve
our market position, diversify our revenue streams and strengthen our
Looking forward, we will continue our strategy of focusing on our key industry groups, where we can
leverage our market positions, provide innovative quality products and
expand our customers’ opportunities to communicate with their markets.
Michael Marchesano, President & CEO
VNU Business Media
All three of VNU’s focus areas – print, eMedia and face-to-face events – are expected
to experience strong organic growth over the next year. However, we specifically plan to
explore acquisitions of business information companies.
Our greatest challenge in achieving growth in print is the ability to sell ad pages. Linked to
this will be the ability to establish an attractive price point for eMedia
advertisers (i.e., selling them on the value proposition of electronic vs.
Digital marketing has had a positive influence on our business, although its
success is tied to establishing an attractive price yield and making the investment in
technology required to drive future projects. This will be further
impacted by increasing labor costs as this area draws market focus.
Overall, I expect limited growth in print revenue in 2005, with strength in Film &
Entertainment, Media & Marketing, and Travel. Both face-to-face events and
eMedia business will see greater growth than print revenue over the same
I remain optimistic about the future direction of B2B, while carefully looking at business
models that capture increasing revenue from the audiences and communities
that we have defined.
Charles Gregson, Executive Director, Business Information
United Business Media
For those of us in the magazine publishing business who are dependant on
advertising revenue, the challenge for 2005 and 2006 will be to further
reengineer our businesses to maintain profits and margins as print yields
continue to fall. Additionally, magazine publishers will need to focus on
keeping print yields in line with online yields.
"Both face-to-face events and eMedia business will see greater growth
than print revenue…"
It is our belief that the cost cutting we’ve endured over the past few years is not yet over. As
an industry, we need to improve our ability to demonstrate ROI metrics to
our advertisers. Ultimately, we must be able to generate the ROI that they
want and expect from their advertising dollars.
Kelly Conlin, President & CEO
Our growth will be driven as much by our internal evolution as a company
as it is by the overall publishing environment. For example, take our
largest segment, enthusiast magazines – we are less tied to the
consumer-magazine industry, as defined by the monthly tracking of PIB
numbers, than we are to the markets we serve.
Of the approximately 80,000 advertising pages we produced last year, only about 10% came from
advertisers listed in PIB. The majority of our customers are specific to a
market – from fishing to skiing to quilting and do not advertise beyond
their core audience.
Securing and growing our revenue from these advertisers is increasingly dependent on
our ability to get consumers to take action – from visiting a custom micro-site to
attending an event to picking up the phone. Our opportunity and challenge
is to enhance the vitality of our brands and the relevance of our content
so that we are the best and richest source of expertise to these
passionate consumers. This is a major philosophical shift for us – a focus
on growing organically, rather than through acquisitions.
Longer term, however, we have to recognize that participation rates in the avocations
represented by our 120 enthusiast titles will likely increase at a faster rate than
advertising pages. Therefore, we need to increase the amount of revenue we
generate from consumers.
We have seen double-digit newsstand gains, for example, from the publications we have
upgraded and revitalized this last year. On the subscription side, we have
an opportunity to build a better value proposition since the beauty of a
special-interest title is the self-selection of its audience. Our revenue
per customer can and should be higher than just an $18 subscription.
Selling other information products that make a consumer more successful,
more accomplished, more satisfied with their avocation is a logical
extension of what consumers would expect from these brands.
This has been a very underdeveloped opportunity, but we are working hard to change that. As
just one example, later this Spring, consumers will be able to view on
their cell phones the current surfing conditions from Webcams that
Primedia’s Surfer magazine has installed all along the California coast.
The revenue model is subscriber fees from the wireless carriers.
Brand-by-brand, market-by-market we need to mine similar opportunities across our