Last week’s blogpost was about some data related sessions at the BMA‘s 2011 International Conference. With an extra week of digestion, we want to focus a little more on one of the sessions. Specifically the “Unleash Your B-to-B Media Partners” session with Dean Horowitz (@deanhorowitz), Vice President of eMedia and Market Intelligence at Vance Publishing Corporation, Kim Paulsen, Senior Vice President, Penton Marketing Services, and Mitch Rouda, President of eMedia at Farm Journal Media. During the Q&A portion of the session, there was an interesting question posed by someone representing a traditional agency.
Because the publishers on the panel and other publishers in the B2B world are starting to offer services that agencies have moved into (such as SEO, social media, and lead generation), it was posed whether or not media companies and agencies are now becoming direct competitors. Mitch Rouda basically replied agencies have to deal with it – the conflict torpedoes are being ignored and publishers are going full steam ahead; however in the long run it really won’t get ugly for the two camps. Rouda correctly indicated that the sweet spots of each entity are still distinct. Publishers will never be as creative as agencies are, and agencies are never going to be as good as creating content as publishers are.
That makes sense. It is our take that this is the logical evolution of the B2B Marketing world for several reasons:
1. Every B2B publication needs to maintain a minimum number of ad pages to offset the cost of editorial pages over time – and ergo there is a finite amount of editorial content they can print because there is a finite number of customers to serve. It is very clear to the rest of the world who their customers are – publishers obviously can’t keep a confidential list of advertisers – they are displayed in every issue that hits the market. Publishers will only serve those customers; there is no such thing as a customer who fails to run an ad or sponsor something the publisher does. Publishers will not be managing demand generation campaigns for non-advertisers, and should naturally focus their resources as value added or additional fee services for those that do advertise. Ultimately, it is in their best interest to help a customer achieve its advertising objectives and hence prove the value of the advertisement in measurable ways, in addition to helping optimize those efforts over time with constant feedback. Given the current economy and disruptive history that the Internet has brought to the print world, B2B publishers will work harder to keep the customers that they have.
2. Vertical volatility is scary for publishers, so they need advertisers to become more dependent on them – and diversification of services helps. In the B2B world, company consolidations and acquisitions in certain sectors like the defense and aerospace industry reduce the number of advertisers in the long run who place ads within the vertical periodicals. So what used to be two separate ads has now become one ad because the merged advertisers are implementing cost cutting efficiencies. Additionally, the dominant marketing department from a merger/acquisition may have a better relationship with a competitive publication and want to cancel ad runs in yours; having better agency-like capabilities can help a publisher keep a customer or even re-establish past reach/frequency or grow better reach/frequency because of the successful differentiation of such services.
3. It pays to be a little closer to those who generate industry content. Like Mitch Rouda said, publishers outshine agencies when it comes to content creation; advertisers like to be associated with content (preferably positive content) that their target audience. For example, depending on your audience, you may change advertising dollars over time regarding page location due to your shifting branding versus promotional advertising needs. While every publication should strive to maintain a ” separation of church and state” that prevents advertisers from influencing the journalistic side of the publication, there is something to be said for having a more direct relationship with the publisher, who is closer to the “pulse” of the industry than any agency could be. Many advertisers have missed premium placement opportunities because the communications between them and the publisher were delayed because of agencies. They could have run an ad near the content that mattered to their customers, and hence received more attention because of their proximity to that content. The better idea that they have of the nature of upcoming content, the smarter their ad placement can be, especially if they can pay for premium placement near where that content is run.
4. Publishers are inherently better at data collection and analysis. They tend to be more IT intensive organizations – they’re running complex content management systems, production control systems, and possess a holy grail – proprietary data about their subscribers who the advertiser wants to reach and all the demographic, behavioral, and sentient data that can come with them. While much of this data is housed in legacy platforms and can be very unstructured, with time this data can be better mined more important to the advertiser. With ongoing research, the advertiser can commission specific readership studies to better understand buyer behavior and preferences. Additionally, while the IT staff that run operational systems for the business are different from the fledgling staffs of publishers who are starting to use marketing automation, web, and social media analytic platforms on behalf of advertisers, it is not too far a leap to say that these non-creative corporate cultures may be better suited for driving the type of customer value that these news platforms promise. After all, it is the publisher brand that can engage with a reader in the op-ed section of a publication, and have immediate information on sentiment regarding an issue, company, industry, or product.
5. Readers/business buyers could care less about the agency “brand.” Let’s say that again: Readers/business buyers could care less about the agency “brand.” Ultimately, it is the publication brand that delivers the overall professional reading experience to the end user/industrial buyer. That brand is trusted and if the buyer “opts-in” to more interaction with the brand, there is a value that no agency can bring to a advertiser. After all, we in B2B know much of our efforts are what have been academically described as a “derived demand.” For the most part, nobody cares for the intermediaries or “ingredient” brands. Disagree? The day after the Super Bowl, ask anyone what station they watched it on and what their favorite commercial was. After they answer, ask them who the agency that produced the creative was. You’ll hear crickets. Now ask any business buyer to look at their favorite trade rag and select an ad that appeals to them; after they show you, ask them who the agency behind it was and if they don’t know, if they’d be willing to find out by googling for a few minutes. How many people would take you up on that?
Now, those first five reasons “not to worry” seem to favor the publishers’ side of the equation; what about agencies?
6. Yes, creativity still matters and always will. Publishers admit it – they make content, but they don’t always package it right. Chances are a publisher may have a decent brand in their vertical, but in the effort to help their advertisers, sometimes the cobbler’s children will be running barefoot. Agencies can also provide the fresh, outsider perspective on advertising and peripheral things like corporate identity and branding in trade show booths, signage, sponsorships. Agencies can help the publisher market for circulation and advertiser attraction. Agencies can take concepts and visions from business people and help make the emotional triggers that positively influence the buying process, only at this stage they will have to be measurable. While we have not been entirely sympathetic to agencies in the past, we strongly believe creativity indeed matters, but agencies must accept that emotion will help trigger behavior that can be measured; it is those metrics that that must drive decisions, not the creativity itself.
7. Agencies can be relevent to the equation without their “creativity” being interruptive. One could argue that every piece of creative is interruptive – broadcast commercials, interstitials, inserts, anything meant to stand out and get attention could be considered a guilty party and no longer “valid” in the Internet era. However, let’s be real – interruption can help. Just as whitepapers with simple graphs can lighten the load of reading an otherwise long, black and white whitepaper, we need relevant tidbits of other information that helps us consume content. Once again, let’s be real. No company or publisher can be producing content that gets read by 100% of the audience 100% of the time. No one is capable of contstantly pumping out a magical piece of content that everyone is always going to love. Agencies can help in a way that may sound counterintuitive: rather than stand out by being creative, blend in by being creative. Minimize interruptions by being creative. Be what customers are looking for, not what you want to show off.
8. Agencies can still give unbiased advice regarding a healthy promotional mix for adverstisers. They can help the advertiser better understand everything from how to objectively understand a BPA statement to ultimately where the best bang for the advertising dollar might be. In any industry, no one publisher is the sole “gatekeeper” to a vertical – there are professional membership organizations, corporate membership organizations, third party events and of course, competitive publications and even influencers such as bloggers or other thought leaders that use advertising as a revenue model and can actually reach your audience. Once again, a publisher needs to fill its publication and doesn’t worry about anyone else’s publications. Also, where the business side of a publication cannot or should not try to influence the editorial side regarding stories, an agency with PR expertise or partnered with a PR agency can. In today’s world where the corporate Marketer is understaffed, under budgeted, and under pressure, agencies can still be a valuable resource and trusted advisor to a CMO or CEO.
9. Agency owners, you have the potential to sell and cash out at decent multiples. Yes, we said that. Maybe the big agencies want to hold onto their pre-Internet, Gone with the Wind world, but at least smaller agencies can benefit. Already publishers like Penton Media and Meredith (a family of B2C publications) have acquired solid agencies that they’ve absorbed into their operations to support their advertisers. Expect more of this, which is not necessarily a bad thing. While most of these acquisitions have focused on online talent, there will still be room for a majority of agencies to survive and thrive on their own. Any principal of any agency knows that they could merge with any other agency out there and make more money. So why is your capitalistic-based organization any different when it comes to maximizing shareholder value? You have what publishers don’t and what they want. When it comes to “buy or build,” publishers have to buy. You can always negotiate the ability to start another agency. There will always be need for niche expertise too if you have it.
We said “not to worry” because this is a blog post for B2B Marketing practitioners – in other words, the readers of B2B publications and buyers of B2B products and services. The development of publishers offering marketing services to advertisers is good for the advertiser. It seems like it’s the agencies that are doing most of the worrying. At some level, yes, agencies will have to stop resting on their “warm and fuzzy” creative laurels and will have to show solid benefits that they bring to advertisers. Publishers will have to work harder at keeping their piece of of the advertiser’s pie. But in the end, it’s the customer that matters and publishers are stepping up to the plate to deliver a base hit.