Words of Advice:
Move Beyond Magazines

Publishing isn't easy anymore. Magazines may have to expand into newsletters, trade shows, and digital media to stay afloat.

By Michael Keating

Publishers who broaden their information-product offerings will thrive--that was the message from three Midwest trade publishing executives at a recent American Society of Business Press Editors' meeting in Cleveland.

"We won't survive if all we do is continue to produce magazines; we must produce an array of products," was the message Tom Kemp, Penton Publishing's (Cleveland, OH) chairman and CEO, delivered at this seminar on the future of business journalism. New products that publishers should consider adding to their arsenals, said Kemp: newsletters, trade shows, and digital media.

Expand Within Your Niche

One publisher that's greatly expanded its offerings is Advanstar Communications (Middleburg Hts., OH). Advanstar's executive vice president, Alex DeBarr, told attendees that his firm has acquired 32 different properties in the past year, including newletters, conferences, directories, and magazines. DeBarr explained: "We are focusing our acquisitions on niche markets and in-fill opportunities, meaning we are expanding the franchises that we have, market by market." DeBarr predicts that the pace of startups and acquisitions in the publishing world will continue to accelerate. Advanstar produces 70 magazines, newsletters and directories in 16 market clusters.

Yet another panelist who saw at least some growth opportunities was Richard Foster, president, G.I.E. Inc. Publishers (Cleveland, OH). Foster explained: "Digital delivery and segmentation is where the growth is at, and there is opportunity in custom, narrowly-focused niches."

Foster cautioned his audience, however: "The future is not bright for small publishers--those who can't upgrade will be driven out. Publishing isn't easy anymore." Foster calculated that today's publishing enterprise needs a minimum of $20 million in annual revenues if the business is to have the fiscal muscle needed to survive.

Maintain Market Knowledge

Penton's Kemp assured his audience on the industry's outlook: "Specialized, business-to-business magazines have a bright future because the information we provide is proprietary. We must, however, maintain our knowledge of our markets and get close to our customers if we are to successfully compete with the Microsofts and online services." Kemp acknowledged the tremendous cost and price pressures facing publishers, urging attendees to be competitive on costs, and to consider low-budget, guerrilla startups. Penton produces 40 magazines, a number of directories and electronic information products, and stages 25 trade show and conference events in markets as diverse as design/engineering, foodservice, and management.

G.I.E.'s Foster sounded a less optimistic note, explaining: "We lack knowledge of the markets we serve, and we aren't investing enough research dollars to understand our readers' wants and needs. Magazine marketers and editors aren't plugged in." Foster told business editors that the new magazine market is driven by immediacy, and that publishers aren't moving fast enough. He predicted that "five years from now, large business publishers will be bought by mega-conglomerates like the Time Warners of this world." Foster's G.I.E. produces five titles in recycling, pest control, and other markets.

Where Opportunity Lies

Both Foster and Kemp offered advice to editors in the audience: "Editors who are tech-savvy will survive and thrive. Those who don't understand digital automation will be relegated to maintaining databases and other boring, low-paying tasks," predicted G.I.E.'s Foster.

Penton's Kemp was more encouraging, telling attendees: "Magazine editors have more room to grow--especially in the area of new product development. They have more opportunities now than traditional space sales reps. Today's editors will be the senior executives of publishing firms in the future." Kemp advised editors who aspire to fill these roles to broaden their business and financial knowledge, immerse themselves in digital technology and Internet trends, and to be in total touch with their markets, so that they can spearhead the launch of products that meet the emerging information needs of customers. Kemp's last piece of advice: "Learn how to write HTML."

Ad Spending to Grow

A recent prediction that should cheer these and other publishing leaders: Through 2001, advertising spending in business magazines should grow at a compounded annual growth rate of 8.2%, says the Veronis, Suhler & Associates Communications Industry Forecast. Industy analysts, meanwhile, predict magazine ad rates will rise 5%-6% in 1998, in anticipation of postage and paper price hikes next year.

copyright © Michael Keating, 1997

Michael Keating can be reached at Penton Research Services, (216) 696-7000, x9379. E-mail: mkeating@penton.com

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