Traditional publishers in search of a hook for their online business often overlook the most valuable asset they have: the mountain of user data and industry information they collect in the course of publishing their flagship products. “Magazine publishers are probably the most shocking case of underutilized assets,” says Russell Perkins, Founder, InfoCommerce Group.
Although the online information landscape is crowded with specialized directory and reference publishers, such as Hoover’s, and newer Web players, such as TechTarget, a huge opportunity exists for trade magazines and B-to-B publishers to develop subscription-based products based on the data and other information they gather.
For starters, many trade magazines are central players in their industry verticals, giving them access to key people and information. Then there’s the business reality that magazines wholly dependent on advertising revenue need to diversify their models to weather inevitable market slumps.
Developing a subscription-based information product can be a difficult process, especially for companies whose expertise is solely in the advertising market. But Perkins shared seven tactics for publishers looking to find new revenue sources in their data:
-> Tactic #1. Examine your data assets for potential products
Well-established B-to-B publishers have the makings of unique information products, if they aggregate and strategically package their data for a new market. Here are some of the top resources to exploit:
- Subscriber files. Subscriber data is more than just a mailing list. A good trade magazine will have a list of key players in an industry, along with the volunteered business and demographic information required to qualify for a subscription. This information can be turned into an industry directory and organized according to market segment, business size, job title or any number of metrics. Because subscribers need to renew their subscriptions periodically, this data may be fresher than other industry directories that rely on third-party lists.
- Surveys and industry benchmarks. A central position in an industry offers the potential for unique, survey-based products, such as Equipment Watch’s AED Green Book. The company surveys heavy equipment rental companies nationwide to give subscribers an idea of what rates to expect to pay.
- Press releases and industry news. Publishers are deluged with more news and company announcements than they can fit in their magazines. That constant flow of information may have value online if a publisher can organize it in a new way. “We think of these companies as information clearing houses for their vertical markets.”
- Website data. The metrics and opt-in data publishers use internally also can form the bases of products, such as lead generation services. For example, by matching registrations for white papers or webinars with Web users’ online behavior -- say, searching for articles on CRM software after downloading a CRM white paper -- a publisher can identify potential prospects for customers.
-> Tactic #2. Locate a business need
To convince customers to pay for a subscription-based information service, publishers need to solve a business problem or improve on a customer’s own efforts. Perkins says some of the best opportunities can be found in:
o Industry pain-points or disorganized processes
o Inefficient areas of the supply chain
o Tasks that customers do individually but can be improved by having external help or being centralized
A product that hits on all three areas is a numbering system that gives every company or product in an industry a unique identifier. Publishers are in a position to create such a system where one doesn’t exist because they are trusted, neutral and central in their industries. SourceMedia, for example, assigns the bank routing numbers printed on the bottom of every check but also publishes banking and investment titles, such as American Banker and The Bond Buyer.
-> Tactic #3. Analyze the industry
It’s important to match potential online products to the industry’s online adoption rates. “We still see an awful lot of laggard markets where the customer base isn’t really online yet.”
There’s no point to get too far ahead of the marketplace with new information products. Think of the dot-com boom, when companies created well-designed B-to-B marketplaces only to find that most customers weren’t ready to procure materials online.
-> Tactic #4. Consider partnerships or acquisitions
Sometimes, a compelling product emerges when individual publishers merge data. Publishers can either acquire companies that have the data they need, partner with other companies to bolster their own databases or -- if creating a subscription-based information product is too much work -- license their own data to generate revenue.
One area with strong partnership potential: software products with a database component. Perkins says software companies have a bad track record for developing content, while publishers aren’t good software developers.
-> Tactic #5. Bolster the business model
With so much information available for free, subscription-based products need to offer significant value to customers. This starts with the quality of the data itself, but here are two ways publishers can make valuable data even more appealing to customers:
- Integrate data into the customer’s workflow. Some products are designed to help customers seamlessly use data in their day-to-day jobs. For example, Thomson Financial offers a software platform called Thomson One that accommodates Thomson’s data, but has an open architecture that lets users pull in other financial data feeds, so it becomes a central tool for their work.
- Offer multiple pricing options and user levels. Perkins says today's Web users place a premium on the content and services they need and don’t want to be sold complete packages if the full suite isn’t useful to them. Creating free access (for data that people may be able to find elsewhere), then different levels of limited access or full access, can help capture customers with different needs and expectations. “There’s no question giving people more options in terms of quantity or depth is a good thing.”
-> Tactic #6. Concentrate on the user interface
Products built on good data can struggle if they’re not engaging and easy for customers to use. Here are three areas of the user interface to pay close attention to when designing an information product:
- The search function. Complex searching options are out -- or at least relegated to a subset of the main search page. Customers have come to expect “the Google standard,” says Perkins, which means speed, simplicity and effectiveness.
- The website itself. As the gateway to data-driven service, a publisher’s website can affect how customers value that information. Everything from the design to the quality of the programming and speed of functions will help customers make judgments about a service, so all pieces should meet a high standard.
- User interaction. Some publishers are embracing Web 2.0 features, such as user comments or ranking systems that let users score information in the database. This kind of interaction and engagement can help a service attract and retain users, and even pick up valuable information that isn’t easily obtained elsewhere.
But several questions remain about these features, such as whether ranking systems can be trusted and if user-generated content adds value or detracts from the quality of the product. There’s no easy answer to those questions, so each publisher will need to determine whether these features make sense for their product and their audience and then test their impact.
-> Tactic #7. Avoid common pitfalls
For publishers entering the information product marketplace, Perkins has a couple final tips to steer clear from common mistakes:
- Don’t try to please everyone. A classic mistake is trying to add more features and functions to appeal to an ever wider audience of potential customers. In reality, the information market is already so mature and specialized that it makes more sense to focus on a specific niche and design a service that does one thing very well.
For example, PeerMonitor is a service that surveys law firms about their billing and accounting practices to create aggregated industry benchmarks for profitability, pricing structures and revenue. Perkins says the company may have been tempted to include additional information beyond accounting data or tried to broaden its audience beyond law firms, but instead stayed focused on one market and one purpose to become an extremely valuable service.
- Don’t expect fast product development or quick revenues. Publishers used to the pace of an advertising-based business model, where revenues can start flowing quickly, often balk at the time, risk and investment involved with building a subscription service. Building a service slowly and carefully to incorporate the best features and functionality will make a more durable product in the end. But if faster development and revenue generation are needed, publishers may want to eye the acquisition of an existing service instead. Useful links related to this article
Business Model Chart From InfoCommerce Group:
AED Green Book: