Category: Data

Through the funnel: Marketing technologies becoming priority for b2b media

DragonForceSourceMedia has a new owner and a full war chest to pursue acquisitions. Among its targets: digital marketing technologies that can create a more efficient, targeted buy.

Advanced marketing solutions, including programmatic buying, marketing automation and retargeting, are no longer the domain of tech media but are becoming increasingly important in other verticals as well. “Where are we with tracking people through our funnel?” asked Mason Power, chief marketing officer at iLevel Solutions, during a marketer roundtable at ABM’s recent Annual Conference called “What B2B Marketers Want from You.” “Where are we with tracking people through [b2b publishers’ sites] and connecting the two? That’s what we want to discuss, not space and time.”

This week, Business.com launched a state-of-the-art data platform and content delivery system, designed to offer high-quality content and contextual advertising. The new platform includes advanced display advertising and retargeting, pay-per-click advertising, marketing-ready leads generated through content marketing and sales-ready leads, which connect marketers with active buyers at the final stage of the purchasing process. A video outlining the new services is available here.

“The old media model was to simply connect buyer and seller and get out of the way,” Uphoff said in a recent Q&A with ABM. “The new model uses data to connect the right buyer to the right seller at the right time while nurturing that relationship.”

Praetorian Group, Inc. earlier this year announced a partnership with Drakontas LLC, a software and communications firm geared toward providing solutions for the government sector. As a result of this deal, Drakontas’s DragonForce software will be incorporated into Praetorian’s PoliceOne Network, a news resource and directory for the law enforcement industry. Drakontas will specifically be working with Praetorian Labs, the innovation investment division of the parent company.

DragonForce is an interactive, software-as-a-service (SaaS) package designed to aid in connectivity of law enforcement teams – both tactical and non-tactical. It offers an instant messaging platform, photo and document sharing, tracking capabilities and a collaborative whiteboard-style program. Praetorian’s addition of this software to its PoliceOne Network – which already offers news, training, product research and more to law enforcement professionals – will result in an even more comprehensive user experience.

“Many leading tech companies have incubators, labs or investment funds to better monitor trends, inform future M&A and investments and stay on the forefront of innovation,” Praetorian CEO Alex Ford told ABM. “I think we’ll see more of these types of programs being launched by media companies as they continue to evolve. It’s one thing to launch tech products and websites, but entirely another to become a part of the tech ecosystem of your market and stay on the forefront of innovation. Programs like Praetorian Labs and partnerships with companies like Drakontas allow us to do just that.”

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High renewal rates offer data products resiliency vs recessions

One of the strengths of the business information segment is that business consumers of data products usually need access to data on a recurring basis, and they need the most current information available. That sets business information services as prime sources of recurring revenue for publishers of the service. Success in obtaining that recurring revenue can be measured through renewal rate, and data services are exemplified by high renewal rates. Data customers come to rely on data services and see them as essential tools; even in depressed economies, renewal rates show remarkable resiliency.

Looking at two research projects conducted independently by ABM and InfoCommerce last year, respondents offered benchmark results in line with these ideas, in the form of high renewal rates and long duration subscriptions. Surveying ABM members with significant data business, the research found 80 percent to 81 percent renewal rates on a unit basis, and 82 percent to 85 percent renewal rates on a dollar basis.

InfoCommerce’s research broke renewal down by company size. Almost a quarter of large companies (over $5 million in annual data revenue) reported renewal rates in the 85 percent to 89 percent range; 35 percent reported renewals in the 90 percent to 94 percent range; and 29 percent reported renewal rates in the 95 percent to 100 percent range. That means 86 percent of large companies report renewal rates of 85+ percent. For companies under $1 million in annual sales, 80 percent of small companies reported renewal rates in the 85+ percent range.

This benchmark result – that typical renewal rates for data products usually top 80 percent, and often edge even higher – is a point of congruence between the ABM and InfoCommerce research.

InfoCommerce also reports that the average life of a subscription is two to three years, and that may be an underestimate. If a subscribing employee leaves a company and his or her replacement purchases the data product, it may register as new subscription, although the company continues to use the service.

The hallmark of business information products is that they are resistant – albeit not immune – to tough economic circumstances. While marketers and vendors may perceive advertising budgets as fat to be trimmed as needed, or see events as luxuries that can be cancelled, data products are more commonly viewed as essential tools that are crucial to core business interests. Moreover, for that reason, as business conditions improve after a recession, data consumers tend to return relatively quickly to products that they had dropped when times were tougher.

For more information on this research and on trends in business information, download ABM’s free white paper, to be released at the end of the month, here.

By Michael Moran Alterio

Data industry trends: New markets, fast data, new research

At the SIIA DataContent 2013 Conference last week in Philadelphia, I picked out several interesting trends in the business information field. Here are a few key take-aways from the event:

Meaningful Data: For FindTheCompany CEO Kevin O’Connor, huge new masses of data represent an opportunity. The availability of vast public data sets – from financial statements and filings to government databases of visa information, federal contracts, and imports and exports to proprietary and private databases and publications – can be made useful by a company that provides an editorial role to make that data useful and available. The key is “making complex, distributed firm data available for meaningful consumption,” said O’Connor.

New Markets: According to David Chun, CEO of compensation data research firm Equilar, an information business driver is the ability of data products to open new markets. He specifically highlighted the possibilities in benchmarking, pay-for-performance analytics and connection mapping. Chun pointed to his own company’s fast growth as evidence that reaching new markets can result in dividends.

Fast Data: New data products are changing the way people communicate with people … and the way machines communicate with machines. According to Peter Lankford, president of the Securities Technology Analysis Center, high speed data products and machine-readable data are going to be playing large roles in retail, Web ads, power grids, healthcare and manufacturing – just as they now do in financial markets. “There is an automation revolution underway,” Lankford said at the DataContent 2013 conference.

At ABM, the “data” field is one of the four key components I measure in compiling the total size of the b-to-b media and information industry. Sponsored by ABM’s Business Information Committee, a new ABM research project is gathering benchmark data to measure the success of data subscription products. Generally, data products deliver revenue through advertising models and subscription models. This new research is trying to put some numbers behind the latter, for example, in terms of subscription growth rate, percent of revenue from new products, and other metrics.

If your business includes data products, please participate in the research by clicking here. All participants will receive a report on the results, as well as a chance to win a $100 Amex gift card.

I’ll be presenting the research results with Infocommerce CEO Russell Perkins, the organizer of the DataContent event, at ABM’s Executive Forum, coming Nov. 11-12 in Chicago. We’ll be discussing strategies and benchmark KPIs for media companies offering database products and for companies moving in that direction. Find out more and register for Executive Forum here.

By Michael Moran Alterio

What LinkedIn means for b-to-b marketing — and publishers

In a post on TheGuardian.com, writer David Benady endorses LinkedIn as the “first port of call” platform for business-to-business marketers. He writes that b-to-b marketers overlooking the social network could be missing a huge opportunity. While it’s clear that LinkedIn is becoming a major game changer in publishing content for professionals, the platform has also silently built up other offerings for b-to-b marketers, including advertisements and lead generation, the same services trade publishers today offer their clients.

“There are a lot of tactical things that we do for marketers: brand awareness, lead generation, consideration,” said Jonathan Lister, vice president of marketing solutions at LinkedIn, in the eMarketer report, “Marketing on LinkedIn.” “The marketers who find the most success with LinkedIn are the ones who understand that we can help them engage with members all through the business lifecycle and touch them at all points of their decision journey.”

At an upcoming ABM event, LinkedIn executive Dan Roth will talk about how the company serves vertical markets — and where it wants to partner, rather than compete, with publishers. Here’s an overview of LinkedIn’s services, and how they may affect publishers.

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ABM research: 74% of B2B media users are decision makers

ABM’s newly released Value of B-to-B report details many ways in which business publishers connect buyers and sellers. Most plainly, of 6,682 business professionals polled, 74 percent say that they are involved in purchasing decisions or supplier selections. 22 percent said that they are not involved in those decisions, and 4 percent did not answer the question.
Sponsored by Adobe Systems Inc. and created in partnership with three marketer organizations, eight trade publishers and a research firm, the Value of B-to-B report also polled marketers and publishers for a full 360-degree look at the ways buyers and sellers interact through b-to-b media. The 2 MB PDF download, including 30 pages of analysis and over 350 pages of raw data, is now available at the ABM website.

So of the 4,968 business media users who say that they make buying decisions, what b-to-b resources do they use when researching work-related purchasing decisions or supplier selections?
Percent of buyers who use each media to research purchases

These decision makers are using trade websites, magazines, events and other print and digital media to research their purchases.

To download the full report and to see a video presentation of the results, with more analysis and research from the Value of B-to-B research, click here.

By Michael Moran Alterio

New benchmarks for print editorial productivity

Every year, ABM takes an in-depth look at the workings of the industry in its Managing Profits report. I recently analyzed the 2012 data on editorial operations at print b-to-b magazines, and some interesting benchmarks stood out.

The research considered 45 different brands that included print magazine publishing as a source of revenue. In total, the 45 brands generated 54 percent of their aggregate revenue from print. However, the range was vast, from one brand that derived just 3 percent of revenue from print, to four that were 100 percent print specialized.

Looking at 45 brands that publish magazines, average number of editorial pages per editor per year is 109, and the median number of editorial pages per editor per year is 146. The scatter in this data is wide, with nine brands reporting less than 50 pages per editor, and 6 brands reporting more than 300 pages per editor. For brands reporting higher than 20 percent margins (on the brand level), 11 out of 14 produced 125 pages per editor or more. For brands reporting negative profitability, only one out of seven hit that benchmark.

The 45 brands produced 69 magazines, 30,000 editorial pages and $101 million in print ad revenue. On average, these brands saw print profitability in the 30 percent range (that’s on the brand level, not company-wide).

If you graph pages per editor on the vertical axis of a graph and print profitability on the horizontal axis, you get a graph that looks like this:

Graph: Editorial productivity vs profitability

Editorial productivity is higher among print brands that are more print-focused.

The correlation here suggests that editors are more productive (they process more pages per year) at more print-focused brands. That is, for brands that generate significant revenue from non-print sources, editors process fewer pages per year, presumably because they are processing content for online and event functions.

There is also a correlation between pages per editor and percent of revenue generated by print operations. A possible interpretation is that editors are more productive (they process more pages per year) at more profitable print brands, perhaps because more profitable brands generate more ad pages, and to support those ad pages, more editorial pages are needed. Thus, editorial staff at profitable print brands are more productive than those at unprofitable brands. For brands reporting higher than 25 percent print margins (on the brand level), the median editorial productivity metric reached 200 pages per editor per year. For brands reporting negative profitability, the median was 78 pages per editor per year. Of course, the more likely causal arrow points in the direction of increased ad pages leading to increased productivity as more work piles up, not that increasing editorial productivity drives higher profits.

Note: An “editor” is a staff member listed as compensated through the editorial line, as opposed to sales, marketing, general admin, etc. Thus, “editors” includes designers, copy editors, writers, graphic artists, managers, etc.

By Michael Moran Alterio

What’s the relevance of the latest news on lower event attendance?

Every quarter, the Center for Exhibition Industry Research (CEIR) releases a deep analytic look at the trade show and conference sector with its CEIR Index for the overall exhibition industry. The most recent report, released June 13, reveals slow steady growth over the last year — the latest data, for the first quarter of 2013, show a 1.3 percent index growth rate, while total U.S. economic growth, as shown in the GDP, is at 1.8 percent. CEIR also produced two very revealing graphics with the latest report. Take a look at this graph of GDP and the CEIR Index:

CEIR Index vs GPD

Here we see the annual and quarterly growth rate for the CEIR Index (red line) vs the GDP growth rate (blue line). Note that the CEIR Index was more deeply affected by the Great Recession than the economy as a whole was, and it seems to have begun its dip before the wider economy did. The implication is that the CEIR Index (and thus, the event industry more generally) may be a leading indicator for economic disruption. That is, as the canary in the mineshaft, the event industry is hit earlier and harder as the economy tanks. Which makes sense given the recent history of companies cutting education, travel and expense budgets at the first sign of a downturn.

The CEIR Index itself is composed of four metrics, each measuring an aspect of the industry: show area, number of exhibitors, number of attendees and revenue. Here are the four metrics graphed over time, per the CEIR:

CEIR Index and constituent metrics

It is interesting to note that the attendance growth metric (the green bars) is the one that started to improve first as the Great Recession ended, and that attendance growth was the highest of the four metrics from 2009 through the second quarter of 2012. Thinking that through, it implies that before exhibitors started coming back to shows, before square footage started to recover, before revenues rose, it was attendees who came back to events first. That is, attendance drives event growth earlier and to a greater degree than the other three metrics. Events don’t grow until attendees start coming back after an economic shock.

Which is to say, attendance growth may be a leading indicator for the CEIR Index, and for the event industry more generally. When attendance rises, the exhibitors and revenues follow — or so the detailed CEIR graphics presented above seem to indicate.

Does the converse hold true? When attendance shrinks, does that herald a future trend toward a decrease in the other metrics? The data presented here do not reveal an answer. Still, it would be very interesting to look at the same graphs as those presented above for the 2005-2009 time period, to see if, as the economy entered the Great Recession, the CEIR Index dipped before the GDP dipped, and if the attendance growth metric dipped before the CEIR Index as a whole dipped.

Now let’s go back to the graphics above — specifically, to the data for the last three quarters. In contrast to the preceeding two years’ worth of data (during which time the CEIR Index and the GDP moved more or less in sync), over the last three quarters, the CEIR Index has grown more slowly than the GDP. Not by a lot, and not to the point of negative growth or contraction — as the CEIR analysis correctly points out, the CEIR Index has shown growth for 11 consecutive quarters. But the Index is moving more sluggishly than the GDP is.

And look at the most recent three quarters of attendance metrics. Attendance had been the highest growing metric, but it has fallen, in Q3 and Q4 2012, to second place, and in Q1 2013, to last. In fact, the attendance metric fell into negative growth in the most recent quarter, the first time any metric in the CEIR showed contraction rather than growth since 2010.

If attendance is a leading metric for the event industry, and the event industry is a leading metric for the GDP more generally, what does that declining event attendence imply about future economic growth? Does a decline in event attendance foretell a decline in the economy?

That’s a very broad generalization to draw on a very scanty basis of three quarters of data, to be sure! But the data is nonetheless worth watching.

And there is an obvious situation that may explain the attendence trend without recourse to Chicken Little’s lament: The ongoing federal government sequester is definitely having an effect on the event industry, as federal agencies cut costs and as recent scandals focus attention on the use of taxpayer dollars. Moreover, anecdotal evidence suggests suggests that government workers are having a harder time getting approval to speak at conferences.

CEIR also tracks its event metrics vertically, looking at event trends over a variety of markets. It would be interesting to look at verticals heavy with civil servant attendees, such as government and education events, and compare attendence metrics with those for other vertical markets. If the data show that the dip in attendence is primarily or even exclusively a concern for government employee attendance at events, then perhaps we can sigh a breath of relief on behalf of the GDP and instead pressure our elected representatives to end the sequester before its negative impact hurts business even more widely.

With that in mind, I went looking for some of CEIR’s vertical data, and found this:

CEIR vertical market data

Released April 8, these data show the latest 2012 one-year growth rate for 14 vertical sectors. And down in the red, what are the sectors showing actual contraction? Construction, Government and Education. Another 11 sectors grew in 2012, some just a smidge, others clearly up.

So what’s the takeaway from the overall declining attendance metric? Most likely the majority of that decline can be laid in the door of tightening public budgets. It may be that a closer look at the metrics — or a look at new metrics altogether — would be a wise way to go forward.

[Full disclosure: CEIR is an ABM partner organization that offers invaluable assistance in compiling ABM’s BIN Report.]

By Michael Moran Alterio