International Money Pile in Cash and Coins

I have spent most of the past year as chair of American Business Media, the trade association that represents primarily US based B2B media and information providers. And I have spent the past several months in transition from my role as CEO of ALM Media. During those months I have spent a lot of time with savvy private equity investors – funds with a history of investing in B2B media – and have listened to their ideas about the industry and its future.

Frankly, I don’t much like a lot of what I’m hearing.

Now, we all know that B2B media is an industry in transition, pushed by readers for more digital content with an increasing emphasis on mobile access to news and information. And an industry pushed as well by advertisers, anxious for more and more sophisticated ways to use digital tools to access their target markets and generate more and more valuable leads. Any reader of TheMediaBriefing knows all about both those topics.

But what my Tour de Investors has told me is that we need to be paying more attention to those who have historically been the buyers and owners of our media businesses. Right now, the investor community is not a happy lot. And the messages they are getting from us – the operators of these businesses – is not making them feel any better.

Of course, I knew that investors had a negative view of print businesses. One after another told me that B2B media needs to be moving much faster to reduce reliance on their print products and move more rapidly to digital and mobile delivery. No surprise there.

But what I find a little surprising is the more general negativity toward all advertising-supported businesses – print and digital. These savvy investors believe that the upheaval in the advertising business has only just begun, and will swamp traditional carriers of branded print or banner advertising. Some cited the enormous importance of Facebook and social media in general in the future allocation of ad dollars.

Others talked about more and more custom marketing by individual marketers who have the ability to cut out the middleman and go direct to their target market. And still others saw the rise of Big Data and analytics as driving more business toward highly targeted lead generation/scoring services, with the money to support that coming from ad budgets. Any way you slice it, traditional B2B media are made to look like the losers when those tidal waves hit.

Yes, but what about marketing services, I asked? Surely B2B media understand those issues and are moving to amend their offerings to include many more services beyond display advertising? Without exception, the investors I spoke with saw the B2B media forays into marketing services as too little, too slow or too late. Those among us who have acquired agencies are said not to have done enough to integrate them with the rest of our offerings. Those who are just now ramping up lead generation or related products are said to be three years too late. Even in the best cases, investors told me that marketing services would never be more than icing on a rapidly disappearing cake.

Even the most bullish about marketing services have some concerns. There’s a sense that our advertising and circulation departments can sell new products, but that our newsrooms are stuck in an old model for new product development. In fact, our news editors are perceived as bastions of Old-Think who can’t (or won’t) re-imagine a world where the news/business relationship is renegotiated to the benefit of the customer. This is not about putting cameras and twitter accounts into the hands of news reporters. It’s about inviting advertisers into the room with editors when new products are being developed. And having editors who are held accountable for achieving product sales targets, and are compensated based on their success in doing so.

There are bright spots, however. One continues to be events, which are clearly less vulnerable to the forces buffeting print and digital advertising. The other is paid content – the more, the merrier in the eyes of the PE community.

The investor community wants to see B2B media moving a lot faster and to think a lot bigger about the nature of transformation during the coming decade. There’s a perception of baby steps being taken, but relatively few bold moves. And the message from those corners of the B2B world where there has been movement to meet the new challenges is largely not getting through to those who hold the purse strings. That’s something we all need to be worried about.

William is a chair of American Business Media and a former CEO of ALM, a specialist publisher in the legal and real estate sectors. Read his previous articles for TheMediaBriefing here.

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