How can you build long term value in your media business? Whether you have immediate plans to find external investors or sell outright, or simply want to secure a long term future for your staff and stakeholders, it pays to know how to build future value.
This article is based on a webinar I presented for InPublishing – you can access the recording of the webinar here.
What will drive value in media businesses?
Value in a media business is not just about its current revenues. It is driven by the reach of its brands, the uniqueness of its content and the depth of its relationships with its audience. Plus the strength of its commercial relationships.
Having a range of revenue sources builds long term resilience, and predictable, repeatable revenues such as subscriptions, rank more highly with buyers than volatile advertising revenues.
Prospective buyers and investors can be swayed by how a business is described. In B2b media, being considered a “business information provider” is more highly valued than simply a content publisher. It somehow implies being a trusted supplier of information on a regular (ie subscription) basis rather than being reliant on volatile advertising. And while we might use the term “publisher” for digital content as well as print, the word still has a touch of “paper and print” for some investors.
Consumer publishers with e commerce and events businesses and subscription revenues are more highly valued than those who are reliant on newsstand and advertising.
So what do you need to start doing now to create long term value in your media business? I’ve summarised seven themes to guide your 2017 plan.
1. Build unique content and data assets
News as we all know is a commodity and hard to charge for. But readers will value product or venue reviews, techniques and practical advice, detailed reports and dossiers, and good quality insights and analysis.
B2B publisher Procurement Leaders include planning guides, research and category intelligence in their paid subscription packages.
So consider how you could build up a valuable set of articles, reports, reviews, interviews and case studies, which could form an important resource for your readers, and a reason to pay for access or take out a subscription.
This means much more than text and images. Video communicates processes, people and places far more effectively and can cross language barriers. Podcasts and audio can be consumed easily while travelling.
And data, such as pricing trends or market information over time, can be invaluable to business audiences or consumers researching expensive purchases. Directories of hard to find products and services, indexed in a manner that makes sense to your specific readership, can save them time and money.
Focus on what is proprietary or unique to your media brand.
If you have star columnists or analysts, first secure their exclusive services, then build them up as market experts, focussing on the specific needs and concerns of your audience. A series of reports that can be updated annually, or form a definitive collection of key issues, skills or techniques, can become the foundation of a subscription proposition.
Get your content management system sorted so that it is easy for your editorial team to create, publish and re-use text, visual and audio assets to create new valuable content.
2. Amass a database of engaged readers
A rich reserve of unique, quality content will keep bringing your audience back to your magazines, websites and events, considering them to be an essential resource to solve problems or provide inspiration. It’s all very well to attract an audience to free content through search and social media. In fact it’s completely necessary to fuel future growth, but you need to know who they are and how they consume your content. A strong social media following does add the perception of value to a media brand, even if it is hard to attribute revenues.
Once you can prove your content is valuable, your readers will willingly share more information with you: their contact details and what is important to them. Even in this social media driven age, an email database is still highly valuable, especially in B2b markets. A strategic approach to email newsletters, tailoring content, format and frequency to suit each segment of your audience, is crucial to nurturing your readers. Deliver real value through your content before selling too hard. Offer useful online tools that require registration to keep building up your database.
The Economist successfully uses social platforms to reach 20m followers worldwide, fuelling a 4m strong email database, which in turn keeps their digital subscriber numbers at 325k and growing.
A website that allows you to track the behaviour of logged in registered users can uncover great insights, allowing your editorial team to concentrate on the most valued topics.
And a user group that is willing to feed back in more detail on how they use your content, and how well the online experience works can provide clear direction for editorial teams, and identify potential new products. High performing subscription driven media businesses often have an advisory board or customer group who are regularly consulted on how they actually use information and content to make better decisions.
Content is still paramount, but with a mobile and impatient consumer, a slick user experience can add significant value to a product.
3. Acquire digital skills and capabilities
While print has its place and live events are still driving revenues, digital content will be at the core of most media brands. So it is essential for your team to possess a full range of digital skills, from the basics of SEO and email marketing, to data management and social media.
Editorial teams must be comfortable creating audio, video, info graphics and charts as well as snippets for social platforms. And they need strong skills in presenting webinars, interviewing on camera and chairing live debates.
Marketing teams need to understand audience analytics, marketing automation and customer database management, as well as the best method of communicating with emerging digital natives.
And technical teams, whether in house or outsourced, have to appreciate mobile first design, and the latest trends in user experience. Plus your commercial teams must be able to devise multi platform campaigns and provide all the tracking analytics that clients demand.
It’s crucial to invest in staff training and development, plus hire in key skills and develop strong working relationships with external agencies and specialists. This will make it possible to experiment with new approaches to digital content and marketing, and learn what suits your audience, essential to evolve your products rapidly.
It may sound a long way from your own media business, but since Jeff Bezos acquired the Washington Post he has tripled the size of the engineering team, focused on analytics and built a culture of rapid test and learn – and traffic is growing…
4. Establish strong commercial relationships
Media brands can’t begin to compete with the global tech platforms on reach, and as display rates spiral down, the only route to premium pricing for commercial packages is to offer tailored marketing solutions, leveraging the publisher’s editorial expertise to communicate the right messages in the right style for their audience.
This service is more costly to deliver, so it requires higher investment from each client, and longer term relationships based on delivering advertiser marketing objectives. Think hard about which organisations in your market have the budget available to invest in full marketing solutions and ensure you establish a strong relationship.
News service Quartz are particularly adept at bespoke creative marketing solutions. They can charge rates 10x as high as for standard display.
This may well require hiring in sales people with a different set of skills, more consultative and with a strong appreciation of marketing, as well as the project management know how to help deliver complex programmes.
But the payoff is satisfied clients achieving measurable outcomes – and higher repeat bookings.
At the other end of the scale, there are of course opportunities for low priced, high volume ad propositions, such as directories, but it is worth exploring ways to automate these and make them self service where at all possible.
5. Create repeatable revenues
If you already have subscription revenues, congratulations! You are enjoying the security of repeatable revenues and the cash flow benefits, let alone the insights into how your best customers use your digital content and services.
If your subscription revenue is still based around your print product, even if there is a digital replica, consider how you can develop a digital only subscription proposition, which will be more efficient to deliver internationally, or, in B2B markets, can be offered on an enterprise basis. Business readers are more interested in searchable resources to answer specific questions than a magazine style package, so a web based content proposition is usually appealing.
Gourmet Traveller Wine gives digital subscribers instant access to an extensive wine tasting archive; and Royal College of Nursing offers digital subscriptions with and without e-learning access.
Positioning a subscription package as a membership scheme, bundling in exclusive events or special offers and deals, as well as digital and print content, can permit you to charge a premium rate.
The holy grail though for business media is developing a data driven product, ideally with proprietary databases, trend data, forecasts and continuous updates, which can be delivered digitally, to multiple users within one enterprise, and available globally. Premium price points of £5-10k plus high renewal rates make these products an excellent driver of value, positioning your organisation as a business information provider rather than a publisher.
6. Experiment with events and e-commerce
Many business publishers derive a third of their revenue from live events, whether one day conferences, multi day exhibitions and expos, awards or a series of breakfast briefings and networking evenings. Events can bring together buyers and sellers, or simply allow peers to share best practice and build networks. Online events such as webinars are also a strong sponsorship proposition.
Consumer publishers are also launching live events, providing their advertisers with an opportunity to demonstrate products and sell directly to their audience, and giving readers a chance to meet experts live and immerse themselves in their interest or sport.
A growing number of consumer publishers are also moving into e commerce, selling kits to craft enthusiasts or even selling cars online. This requires a new skill set of managing stock and cross promotion of products, but the marketing clout of an established media brand provides a head start.
A good example here is Immediate Media, who bought TV shopping business Jewellery maker to sit alongside its craft magazines – and was recently acquired by Burda.
7. Test international potential
The English language gives publishers an unfair advantage, making it easy to test out demand for content internationally. If your content has the potential to travel a good starting point is to create regionalised sections of your website, and encourage users to register to receive tailored email updates, and extracts from a regional subscription package. Regional sections also provide the opportunity to offer finer targeting for advertisers. Concentrating on one or two regions and testing the potential for incremental revenue could attract a commercial partner or buyer with capacity to invest.
Examples here are Institute of Civil Engineers with their international membership, and Just Auto, which has global coverage.
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So to summarise, these are the seven key areas where you can add long term value, and where even small steps taken now can pay long term dividends and help make your media business more resilient to change, and more appealing to investors.
Be aware that potential investors and buyers could come from outside traditional media: they could include retailers or event organisers for whom the marketing reach, quality content and customer database are hugely important.
1. Build unique content and data assets
2. Amass a database of engaged readers
3. Acquire digital skills and capabilities
4. Establish strong commercial relationships
5. Create repeatable revenues
6. Experiment with events and e-commerce
7. Test international potential
Read the questions that leaders of media businesses posed at the end of my webinar and my answers in this article.
If you’d like to discuss how you can start to build long term value in your media business, feel free to get in touch for an informal chat over the phone or over a coffee.
About the author
Carolyn Morgan has over twenty years experience launching, growing, buying and selling specialist media businesses across print, digital and live events. Carolyn now advises publishers large and small on their digital strategy and writes and speaks on the topic of digital publishing strategy for media sector publishers and events.