Many B2B publishers are struggling to support legacy business models based on vulnerable revenue streams such as display advertising and classifieds. Still tied to print publishing, brands are careful to protect the current model, while innovating around the edges.
But it doesn’t have to be that way. Here we profile three businesses who are reinventing the trade publishing business model in the digital arena, without the constraints of legacy models.
Sigaria: Community-based niche publishing
Founded in 2004 as a niche information service for the procurement industry, Sigaria is now a fast-growing B2B media intelligence company. Its founders – who came from technology and marketing backgrounds, not publishing – envisaged the service as a community-driven source of global market intelligence.
Annual revenues last year were in seven figures – less than £10 million – but were up 70 percent year-on-year. It employs 50 people across offices in London, Toronto, New York and Pune in India.
Around 60 percent of Sigaria’s revenues come from its subscription services, which costs between £200 and £30,000 per year. The rest comes from events and a small amount of advertising.
Sigaria co-founder and CEO Alex Martinez says its community of around 15,000 active users on its main brand, Procurement Leaders (PL), is the key to success.
He tells TheMediaBriefing: “You really need to focus on customer relationships. They’ll feel more ownership of your brand and really help the business. Speaking to our clients and looking to support them has enabled us to build that trusted position.”
PL staff monitor conversations taking place in the community to help choose which topics to cover and get feedback on how to develop the service. The firm also mines its community for content that can be re-purposed into editorial content.
Sigaria has dedicated acquisition and customer retention teams. But Martinez says he should have focused more tightly on the core subscription service earlier. Instead, he says, they spent too much time experimenting with other revenue streams which have become less important, such as advertising.
Martinez says: “The whole Linkedin style networking offers pretty base level value. I think people focus too much on the quantity of people rather than quality.”
“The question people want to ask is can I find someone on my network who has run this kind of project before. That’s something we are launching this year.”
The future holds more international expansion, with South America at the top of the list.
Practical Law: Time-saving advice from industry veterans
Founded in the 1990s by two former lawyers from Slaughter and May, Chris Millerchip and Rob Dow, Practical Law magazine was designed to provide lawyers with practical tools and how-to advice to save (billable) time.
But now the business’s focus is entirely online — and it’s impressed Thomson Reuters enough to agree to buy the business for as much as £300 million.
The business offers workflow tools such as templates for legal documents, agreements and checklists, which would normally take lawyers significant amounts of time.
Practical Law VP of marketing & business development Ian Nelson told us: “It is about fundamentally explaining transactions. We offer how-to information, giving an overview of how to run a closing for instance, or what goes into a stock acquisition.”
The firm’s content is almost exclusively written by former practising lawyers. Chris Wedgeworth, MD of the firm’s US operation which launched in 2009, says that rather than guessing what readers are interested in, the content is tailored to what people actually want.
He says: “It’s almost a cliché, but really understanding the end user of the content is what made us successful. If you came to our office, the vast majority will be former practicing lawyers.”
The shift to digital has made the service more valuable, as guides and models can be constantly updated, and subscribers can assess the particular piece of guidance they want at any time.
Nelson says Practical Law’s flat subscription system gives it an advantage over competitors, many of whom offer advice and content on a metered basis.
He says: “We really want this to be a tool that lawyers use. If you start monitoring and charging for access all the time it puts people off. I used to be an attorney at a big firm and I would be pretty scared of logging on to services in case I ran up a big bill.”
Despite the digital focus, Practical Law still finds its print magazine a useful marketing tool to attract subscribers.
Knovel: Intelligence inserted into the workflow
Another business putting practical intelligence in hands of paying subscribers is Knovel (LINK) which was bought by Reed Elsevier for an undisclosed amount.
An information source for engineers, its revenue comes exclusively from corporate subscriptions. The firm currently has about 800 corporate clients who pay anything between $1,000 and $1,000,000, based on the number of users and how much they use the service.
Knovel founder Chris Forbes previously worked for engineering print titles, but says digital has allowed B2B publishers to deliver information in a far more useful way.
Key to Knovel’s approach is slotting into the workflow of its subscribers. The firm provides plugins for software such as Excel, and is building APIs into all its services which will go live in the next couple of months to make sure it is compatible with as many tools as possible.
Speaking to TheMediaBriefing, Forbes says: “Of practicing engineers, 70 percent use Microsoft Excel on a daily basis. If you are going to deliver information for their work it’s much easier if they can just push a button and have it appear in that tool.
“The optimal strategy is to make ourselves ubiquitous. Absolutely, you want to be in as many places as your users are going to be in terms of your ability to pay for it,” says Forbes.
The firm has a “fairly substantial” product management group which monitors usage and it runs about 50,000 surveys a month. Customers who provide specific feedback often receive a follow-up call.
Like Martinez, Forbes believes that providing ways for professionals to collaborate will be a major growth area for B2B publishers.
He says: “It’s in a very nascent stage but it presents a huge opportunity for growth. We’re not the first place someone goes to solve a problem, first they walk down the hall to a colleague.
What all three firms have in common is an awareness of what digital distribution makes possible, but not at the expense of focusing on their audience rather than their platforms.
Four defining traits these businesses share are:
— An intense focus on the client
— A two-way relationship with their community and
— Distinctive content that’s useful to professional audiences.
— Investment in useful technology and products that get jobs done
Are there any more media companies, from any sector, who are reinventing their core business model? Please send us any suggestions in the comments or follow us at @mediabrief on Twitter.