If anything, the pace of change is accelerating, in large part driven by customer expectations. Publishers are in a state of permanent re-evaluation of their business models. What then, asks Robin Crumby, is our value proposition in the age of social networks and free information?
Like it or not, the market for specialised information has changed. And the business models we have cherished for 40 years have slowly crumbled.
The rise of online social networks such as LinkedIn and Twitter and social media like blogs and online video have encouraged customers to become publishers themselves. The role we have traditionally served to connect users, inform and entertain has come under severe pressure.
Professional associations and specialised information publishers are rushing to redefine their value proposition. Playing it safe is no longer an option. Customer expectations are evolving and businesses must reinvent themselves to survive and thrive. Smart publishers, struggling to make money in traditional markets, such as controlled circulation, are heading up the value chain towards more bespoke, high-value products and services.
So what does the future hold for B2B publishers?
As business publishers emerge from the bunker-mentality that characterised much of the last 18 months and return to more expansive thinking, many are looking ahead with some degree of confidence. This year has marked a quiet return to stability and growth for most and, barring a double dip recession, the recovery for publicly-traded publishers such as Informa and Euromoney seems well under way. However, any expectation of a return to business as usual is likely to be misguided.
According to Outsell, the market for B2B trade information declined by an eye-watering 19.3% in 2008-9, with spending on news down 19%. It now seems clear that blaming this drop on the economic downturn alone risks turning a blind eye to a more fundamental and indeed structural change in the way that information is being bought and sold.
Publishers’ business models that guarantee regular revenue streams and advance payments are coming under pressure as Google and now Apple tighten their grip.
So what’s changed?
For a start, customer expectations continue to evolve and publishers are still playing catch-up. The customer manifesto is clear:
* I expect to be able to access your content wherever I am, on multiple devices
* I want content delivered on my schedule, not yours.
* I like multi-media content and want you to deliver not just in words, but in video and audio
* I expect to be able to easily share and discuss this content with others
* I want to have a say in how content is created so it matches my needs
* I am prepared to pay for some types of premium content but not all
Most of the above demands are not necessarily new, but they are challenges that most B2B publishers continue to wrestle with. Rather like the automotive industry, publishers have not truly evolved in decades and customers are voting with their wallets. The decline of ‘big auto’ centres like Detroit tell a sad tale of decline as demand increased for more economic and environmentally friendly alternatives to the petrol engine. American car makers failed to evolve and the power shifted to Europe and the East where new formats were already in production. Likewise, the music industry continues to be squeezed by the likes of iTunes and peer-to-peer file sharing sites, and desperately employs lawyers to try to protect its dying business models.
Similarly, many publishers have been happy to keep their heads firmly in the sand and hope that these unreasonable customer demands for change will fade. As my US colleague is fond of saying: “hope is not a strategy!”
At the latest SIPA conference in Munich, several publishers, including Incisive Media, presented their most recent customer analysis undertaken to better understand these changes. The desire for convenience is a key theme for information buyers. Customers are under renewed pressure to perform with limited budget and resources, so the need for practical content that could save them time and money is arguably even greater today than it has ever been. Publishers have an opportunity to reposition themselves as information partners in a more dynamic and two-way relationship. As Gen-Y staff members rise through the ranks to become our key customers, their demands and expectations will continue to drive change in how we deliver our information services.
From comments on articles, to ratings and reviews, polls and voting, websites invite interaction and encourage the user to have their say. At the SIPA marketing conference in November, keynote speaker David Cushman of 90:10, encouraged publishers to think of content as ‘social objects’, or as dialogue-driven content where the conversation further enriches the content and adds value for all parties. Many larger publishers like the Wall Street Journal, the Financial Times and the New York Times are leading the charge and innovating around both format and channel.
Will the iPad live up to the hype?
The arrival of the iPad is being heralded as a ‘game changer’ for magazine publishers. But will the media hype translate into real change in customer behaviours. Who knows?
But anyone who has seen an iPad will be intrigued by its potential. Its ease of use for accessing websites, watching video, listening to music or playing games are all impressive. Certainly, if the iPod and iTunes transformed the music industry and the iPhone and iTouch have revolutionised portable gaming, then it is reasonable to expect that the iPad will have a similar impact on how we buy and consume content online.
For several years now, the explicit goal of many publishers has been to attempt to ‘own the desktop’ or, in other words, integrate their products and service into customer workflow. So, when the customer starts their day, they switch on your service to do their job in some way, shape or form. But what happens when customers no longer consider the desktop as the gateway to your content?
Cue the app. A simple software programme available on portable devices designed to complete a particular task, quickly, easily, wherever you are. Customers no longer visit a website to get their fix of information, the app combines a potent mix of software and online service for ultimate convenience. Looking for up-to-the minute data or the latest news? Then a series of branded apps will deliver that to you. And it’s not just what it does but how it does it. Apps are interactive, tactile and somehow fun to use. In a way that reading a web page, clicking on hyperlinks or waiting for video to load, just isn’t.
The elegance and ease of use is compelling. No more clunky file formats or browsing hard-to-use websites on a desktop, the app delivers real-time information when you need it. Add to this the iPad’s storage capacity and e-reader functionality and publishers can supply whole libraries of their content, reference material, back issues and complex data sets all fully searchable. It all adds up to a portable device that is capable of further changing customer behaviours. Whether the iPad initially lives up to the hype is another matter, but with the second and third generation of devices next year, you wouldn’t bet against it.
Like all new devices and new formats before them, traditional media clearly still has its place. Did online kill print? Of course not, it just forced it to evolve. It’s certainly giving Google cause for some soul searching. If Google and Microsoft dominated the desktop, then it’s Apple and Blackberry who are emerging as the gatekeepers to the mobile internet.
What seems already clear is that whatever the device, whatever the media, the quality of your content remains paramount. Customers will only continue to pay if you are delivering true value, in either making them money, or saving them money.
So, as publishers consider their strategies for the coming years, the gauntlet has been well and truly thrown down. Innovate or die trying.
Stick around to slug it out in a low-value, low-priced battleground as free information and social networks further encroach into space traditionally served by niche publishers. Or do what we do best and find profitable niches within those spaces.
The creation of micro-communities is being widely heralded as a robust model for specialised information publishers. For a business like mine, Melcrum, this means creating small groups of like-minded customers who come together to benchmark, discuss their challenges and hear the latest research and trends. We use our established networks and in-depth industry knowledge to facilitate a conversation between peers that is highly valued by the customer.
Micro-communities are just one example of how publishers are going ‘up’ the value chain into bespoke services, such as consultancy, in-house training, and syndicated research.
The rewards are clear. Price points can jump from an average of a few hundred pounds for a B2B newsletter to several thousand pounds for a more bespoke service. The higher price, the harder you work, the better the relationship, the more loyal the customer. So while budget-strapped customers will tell you they can’t afford a newsletter, they will happily spend 10 or 20 times that amount on a service that exactly matches their requirements.
As the dust settles from recession (and volcano-related disruption), publishers find themselves in a bad disaster movie type scenario. The writing is on the wall and change is urgently needed. Smarter publishers are heading for higher ground. Up the value chain that is.