B2B media companies see the potential to mine their industry reporting capabilities and relationships with niche audiences to drive organic growth via new recurring revenue streams. “Rich data” is a frequent topic at business media gatherings, and the new logo of American Business Media now includes the tagline “the Association of Business Information Companies.” Translating theory into practice, though, has lagged. Larger B2B publishers such as Reed Business, Hearst Business Media, and Hanley Wood have entered the business information arena primarily by acquiring pure-play data businesses. And it appears that enthusiasm for “rich data” offerings (which require new capabilities and different business cultures) may have dimmed as publishers focus on the now booming B2B market for online advertising.
At the same time, business information providers are showing a new level of interest in advertising and marketing revenues – and a new, web-centric generation of information users may not share older users’ aversion to advertiser messages placed alongside premium content. Potential workflow disruption may present the largest single barrier to advertising in premium information services. But a recent informal survey of enterprise information buyers found many who are open to advertising in premium services provided that it is targeted, enables “drilling down” for more information – and enables lower-priced subscriptions. Dow Jones has added advertising to its database-driven, subscription-based VentureWire online newsletter, premium content aggregators like Alacra have experimented with advertising, and producers of company information databases are looking at taking a page from directory publishers and adding revenue from sponsorship of enhanced profiles. And specialized business information providers catering to the broader needs of individuals in vertical markets could create “portals” that are natural environments for highly targeted advertising.
It will be interesting to which players move most quickly and effectively toward occupying the middle ground of hybrid models – and whether they are rewarded with higher valuations for their efforts. By Steve Sieck, President, SKS Advisors, Inc.