Publishers debate merits of marketing services

Many business-to-business (B2B) media executives are adjusting to life after the Great Recession by repositioning their revenue streams around marketing services. While some publishers are taking a leap of faith into a new operating paradigm, others are cautious about the perils of competing with agencies and reducing their margins.

What are marketing services?

According to VSS Communications, the marketing services industry was $215 billion in revenue in 2010.

• Direct / Database Marketing: $107 billion
• Consumer Promotion: $46 billion
• Event & Entertainment Marketing: $28 billion
• B2B Promotion: $26 billion
• PR & Word-of-Mouth: $6 billion
• Outsourced Custom Publishing: $2 billion

At American Business Media's annual conference this week, Scott Peters, co-president of Jordan Edmiston Group, highlighted two key areas of growth opportunity for B2B publishers: database marketing (forecasted to grow to $120 billion in 2012) and interactive marketing services (projected to reach $40 billion in 2012). Print advertising for B2B media, on the other hand, will continue to decline through 2014.

Which media companies are doing marketing services well?

Many attendees and speakers at the ABM conference repeatedly stated that no B2B publisher was doing marketing services well, overlooking IDG Connect as a potential model of how to implement marketing services successfully. Penton Media recently acquired EyeTraffic Media in order to get a running start in the space, while Northstar Travel Media recently launched a marketing solutions division focused on five areas of client support: technology platforms, events, research, creative services and social media management.

Kim Paulsen, SVP of Penton's Marketing Services division, encouraged publishers to address the issue of talent by either hiring new blood with outside experience or acquiring agencies who are already capable of executing. Michael DeLuca, president of Meister Media, echoed this sentiment, lamenting the lack of account management DNA within the publishing ranks. Gary Slack, chairman & chief experience officer of interactive marketing communicatin agency Slack & Company, chimed in on the issue of talent, advising publishers looking to build a business organically to hire some agency pros for key positions. Paulsen also highlighted the importance of technology as a means of enabling the business, saying, "If you don't become an automated marketing specialist, you're crazy!"

Marketers don't want content from publishers

One of the big surprises at the ABM conference was marketers' perspective on quality content. While publishers believe they can provide superior content for marketing collateral, Mark Wilson, vice president of corporate and field marketing at tech vendor Sybase, disagreed. Sybase, in fact, is hiring its own social media-savvy journalists as it remakes its marketing structure to look more like a newsroom.

"It's never been easier to put content in front of decision makers," said Wilson, adding that quality was the key for success. Penton's Paulsen spiced up the debate saying something that everyone in the room was thinking: "Vendor content sucks." The two seemed to agree on the fact that publishers can provide context, packaging and polish to custom content, however.

Competition with agencies a sticky issue

During a panel session containing marketer, agency and publisher alike, competition and coopetition came up early and often. As publishers expand the services they offer, they often bump up against agency partners for business. Paulsen jumped on the subject early, saying, "We are smart to partner with agencies, but in some cases agencies keep us away from the customers and don’t deliver new creative ideas to customer." Slack warned that publishers looking to attack agency relationships would find it difficult, noting that publishers "don’t operate monogamously with clients."

In the following session, Scott Vaughn, CMO for UBM TechWeb, chimed in on the issue. "There's no business in competing with agencies for clients," he said. This quote generated a response from the peanut gallery when former Reed Business Information CEO Jeff DeBalko responded via Twitter, "Tough to avoid when pursuing new $ streams." Sybase's Wilson had perhaps the most interesting comment on the issue saying that he wanted his media partners to bring him innovative ideas and his agencies to handle the operations