Routes to Success for B2B Publishers’ Websites, By Guy Consterdine, Guy Consterdine Associates
Guy Consterdine, of Guy Consterdine Associates consultancy, has conducted on behalf of FIPP a second study of successful websites operated by business-to-business (b2b) magazine publishers around the world – following a survey in 2002.
The survey’s objectives were:
• To examine good practice online, among successful websites
• To learn about the ways in which these publishers measured and achieved online success
• To share some of the lessons about using the new medium in conjunction with printed magazines
Whether or not a website was successful was left to the judgement of the publisher. Success could be defined in whatever terms the publisher chose: making a profit, generating significant online revenues, developing online branding, creating successful online products, attracting subscriptions, or in any other way a publisher chose to measure success against defined objectives.
The sample was not intended to be representative of all b2b magazine websites: the aim was to learn from those who had achieved success.
A total of 46 websites From most regions of the world were included in the survey, a larger sample than in the 2002 survey.
Where possible, comparisons have been made between the 2006 and 2002 results, to look for trends. The 2002 survey was conducted during autumn 2002 (and published in January 2003), so there is a time difference of three and half years. However the 2002 questionnaire was less extensive and detailed than in 2006, and accordingly not all the 2006 results have earlier data with which to compare. Moreover the relatively small samples in each year mean that no significance can be attached to minor differences in the figures.
Summary of findings
Organisation of website operations
The most common way in which successful publishers’ websites are organised is for content to be created by each individual publication but under a centrally developed corporate strategy. The main alternative is for online activities to be handled centrally for the whole company by a single business unit.
Strategy & objectives
All the websites have multiple objectives. Three of the top four objectives are linked to some extent: to expand the audience beyond the print audience by creating an online audience; to communicate with the target audience more frequently; and to build a community around the brand. The other objective within the top four is to create new revenue streams and/or profits in the long term. Its companion objective – to create revenues/profits in the short term – is less common.
Comparing these results with those of the 2002 survey, the top objective has not changed. Widening the brand’s franchise by creating an online audience headed the ranking in both years. Seeking new revenue streams and profits in the long term was close behind in both years. Overall, the relative importance of the various objectives was broadly similar in 2002 and 2006.
A hallmark of these successful websites is that there has been a marked strategy of expansion in the past year, and there is an even stronger anticipation of further expansion in the forthcoming year.
For these successful websites, 40% of their total funding comes from web revenue. About a third comes from internal funds provided centrally. Almost a quarter of funding is from the host magazine’s own internal funds. Other sources of money account for the small remainder. However this overall picture conceals some large variations from one website to another. The pattern in the 2002 survey was broadly similar.
Revenue earned from the web is dominated by advertising revenue, which accounts for more than half of it. Most of this is from display advertising, responsible for 30% of all web revenue. When sponsorship revenue is added, two-thirds of web revenue comes from offering marketers a range of opportunities to promote their products and services. Of course, individual websites often show marked variations from this overall pattern.
The number of site visitors (‘unique users’) received each month varies enormously. The average (median) is 30,000 unique visitors a month, but this average is not very representative of the range. A few websites with very specialist technical audiences attract less than 1,000 unique users a month, while a number of sites attract a quarter of a million or more visitors a month. In general, audiences have been growing.
The average number of page impressions per month is 350,000 (median). Thus the average site, with 30,000 unique visitors, generates an average of 12 page impressions a month per unique visitor. Since many users will visit the same site more than once a month, the average pages looked at per visit will be considerably lower than 12. This indicates that the use of the medium is normally a specific information-directed search where the user knows what he or she is looking for, and finds it quickly without a lot of browsing. Clearly, such users are ‘hot’ prospects for marketers whose products or services are relevant to the topics on the destination pages.
It is quite a common experience that the websites have attracted among their audiences many people who were not reading the print product. This is in line with the 2002 findings.
There are several sources of this new web-only audience. The website extends the brand’s reach overseas. The site makes the brand accessible to disciplines outside the core ones, but which nevertheless have some interest in the topic. Staff at different levels of seniority within an organisation gain easier access. Readers of rival magazines may also look at a publisher’s website.
The web has the effect of weakening the notion of thinking of customers in traditional categories; instead, those ‘non-core’ individuals for whom the publisher’s information is in fact relevant can reveal themselves by visiting the website. The situation has reached the stage where the combination of a publisher’s print products and online products can be very powerful.
The new audiences who do not read the printed magazine are attracted by a range of features, which may differ from one individual to the next. The most frequently mentioned incentive is news services – which can take many forms. Classified advertising, and particularly job ads, was often mentioned as an attraction. Another motivating feature for some individuals is a substantial reference database. More generally, the websites’ 24/7 access worldwide is a major advantage which entices new users to the brand.
Since timeliness is a key characteristic of the internet, about half of the websites are updated continuously throughout the day. Another quarter are updated daily but not continuously.
There is a range of ways in which users may communicate directly with the publisher of the website, but only one way is offered by more than 40% of these websites: the obvious one of being able to subscribe online to the printed magazine.
Among a list of possible services offered by a website, two services stand out: archive retrieval, and an emailed newsletter linked to the website. Both these are offered by about 70% of the websites, which matches the situation in the 2002 survey. About four-tenths of publishers provide a news flash service. Just over a quarter offer RSS feeds, a sharp rise from nowhere in 2002.
Half of the b2b websites have an e-commerce capability for selling products or services online, where customers also pay online. All who do have e-commerce include subscriptions to the printed magazine as one of the items that can be bought.
It is general practice to take information that has not been published in the printed magazine, and edit/package it for visitors to search on the website.
15% of publishers of these successful b2b websites also publish a digital edition of the host magazine – that is, an exact reproduction in digital form.
Advertising and sponsorship
About three-fifths of publishers of successful b2b magazine websites have gained new advertisers on the web who do not advertise in the print products. This is approximately the same level as in the 2002 survey.
The new web-only advertisers are attracted by the low cost of online advertising, the nature and quality of the audience, the measurability of the results, the generation of sales leads, the selective positioning of advertisements, and the speed of publishing an advertisement or a modification to it.
Two-thirds of the publishers offer prospective advertisers/sponsors mixed-media packages, by creating advertising/sponsorship opportunities across both the print and web brands, and/or with similar brands elsewhere in the company. The most common form of package is a simple discount on the advertising costs if both media are used. Other forms of electronic promotion are sometimes part of a package deal – such as a bespoke mini-site, a standalone emailing, a mention in a regular electronic newsletter, a free listing in a product alert, an online enquiries/sales leads facility, or organising a web seminar. Many permutations are possible.
About a fifth of sites offer 'contextual advertising' - that is, the placing of advertisements on the screen according to keywords used by visitors when searching the site.
Marketing of websites
The websites are marketed to potential customers in a variety of ways. The principal method of course is promotion within the magazine hosting the site. Email promotions rank second.
Opportunities and dangers of search engines
There is some concern about the possibility that search engines such as Google, Yahoo etc may reduce visitor traffic to the website by directing internet users to alternative information on other websites. There is also a degree of concern that search engines such as Google may reduce advertisement revenue for the website by attracting some of that ad revenue themselves. Indeed the power of search means that publishers need to structure their websites to maximise their search engine ranking.
Almost two-fifths of respondents are concerned that Google and other search engines may create problems of breach of publishers’ copyright. The Google Print project in particular raises some difficult issues.
Most publishers believe that their online competitors for site visitors are mainly the same as their competitors to the printed magazine. Only a minority believe that they are mainly different competitors. When this minority comment on who the different new competitors are, it is very much non-magazine organisations with websites or portals which specialise in the same fields as the magazine. Many of these are start-ups which only exist on the internet.
Taking account of all relevant overhead and operating expenses, 68% of these successful sites are making a profit (among those who know the financial situation). 18% are breaking even, while only 15% are losing money. The 2006 results show a marked improvement on the situation in 2002. Only about one quarter of sites were making a profit then.
Barriers to success
The main barrier to success is insufficient funds for web development. Not far behind is a pair of staff-related issues: difficulty in finding staff with the right skills, and resistance by existing employees who work on print products.
Respondents were invited to write down the principal lessons they would like to pass on about developing and operating a website strategy. The answers were varied, and have been grouped under a set of headings: customers, strategy, keep it simple, online products, technology and the speed of change, internal organisation, and expenditure.
To find out more
To download the full report, free: http://www.fipp.com/ (and click on Publications)
For more information about Guy Consterdine Associates: http://www.consterdine.com/