What consumer media can learn from booming B2B
Readers of Digiday may have noticed an interview with Martin, talking about media’s shift towards subscription-based services. Many of the arguments in there will be familiar to regular readers of this blog. It confirms a recent trend we’ve been following – as Google and Facebook continue to hoover up the vast majority of online advertising spend, media companies are increasingly looking to online subscriptions to grow revenues.
Of course, one area of media that worked this out a long time ago is B2B media. High-value subscription-based business information is a sector we expect to continue growing, and the amount of high-level M&A activity in the sector would appear to confirm that. Earlier this year Blackstone agreed to take a majority stake in Thomson Reuters’ Financial & Risk business for over £17bn. IHS Markit followed up a successful merger by agreeing to buy Ipreo in a $1.86bn deal. Our client, Argus Media, was last year acquired by General Atlantic in a deal valuing it at £1bn. These are big bets on future demand for high-value information and data, but what can consumer providers learn from B2B here?
Understand your audience, and give them what they need
Over the past decade, B2B publishers and information providers have invested heavily in commercial product managers, data scientists and insight professionals. The most successful of these know as much as possible about their users’ workflow, what they do every day and when their information needs occur, and they make sure they can fulfil those needs. Some of the most successful, from Argus to Accuity to LexisNexis, create products that their users can’t do without – they need them to do their jobs. And those companies don’t stop listening or innovating. This is trickier in consumer media – as Martin points out, “consumer audiences are more of an amorphous mass”. But the principle remains true – from The Economist right through to Future’s stable of niche music magazines, it’s essential to understand your audience, listen to them, and make yourself an indispensable part of their community.
The trust of your readers is your most valuable asset
One of the reasons B2B media companies can charge subscriptions running into thousands (or tens or hundreds of thousands) is because their users have absolute trust in the information they put out. Most consumers aren’t anywhere near wealthy enough to pay those kinds of numbers, of course, but trust still matters. In 2015, it was revealed that the Telegraph had been overlooking stories that cast a negative light on HSBC, one of its biggest advertisers. Its circulation is now declining by up to 19% a year, faster than any other newspaper. This year’s Edelman Trust Barometer showed that the British media, particularly consumer news media, is trusted less than both government and business. However, trust in individual journalists can still be very high. This is a lesson all media companies need to take on board, and quickly.
If your content has value, people will be happy to pay for it
B2B media talk a lot about ‘value selling’. Their best salespeople will go into an organisation and, way before talking about product, ensure they understand as much as possible about their client’s needs and pain points, and they will work hard to quantify just how much those problems are costing them. They make sure the client knows this, and also how much their product will make or save them. By the time it comes round to discussing price, they’ve already demonstrated what the product is worth to them.
Of course, consumer media is rarely quite so utilitarian, but it’s worth looking at the titles that have been performing well in recent ABCs. The likes of The Economist, The Spectator, The New Statesman and Private Eye have all been enjoying recent growth, as from a lower base have the likes of the London Review of Books and Times Literary Supplement. Meanwhile there are plenty of lifestyle magazines and (particularly) local newspapers who have struggled to differentiate themselves from the mass of free content online, and are losing their audience as a result. Finally, there’s the Guardian, whose membership drive has convinced over half a million people to voluntarily stump up cash for something they can get for free – because they value that content and see it as worth supporting.
And if you don’t believe that consumers will pay for content they value, consider Spotify, Netflix, and Sky Sports.
B2B media may seem frumpy and unexciting compared to the glamour of consumer media, but all media companies would do well to look at its success and learn from it.
Martin Tripp Associates is a London-based executive search consultancy. We work across the media, information, communications and entertainment industries. This means we can bring best practice from across the sectors to your business. We have also worked with some of the world’s biggest brands on challenging senior positions. Feel free to contact us to discuss any of the issues raised in this blog.