It’s no secret that the world of trade media publishing is tough. Arguably few industries have been forced to change more than publishing, and trade media has been particularly badly hit. Publishers have gone from a world where they controlled much of the distribution of information to the industry through printed magazines, to one where there is more information available than any reader could possibly consume. Furthermore, online publishing requires a very different approach to advertising than print, completely changing the business model for publishers.
Of course, some publishers are still doing well, but others are finding it harder. We’ve seen a steady decrease in the size of editorial teams as budgets are cut, and this is obviously something that has to stop at some point.
The challenges from an advertising point of view are frightening. Previously revenue was effectively unlimited in print: if you wanted to take more advertising you just needed to print more pages. The publisher just needed a corresponding increase in editorial, something that resulted in greater employment for journalists.
Although publications were able to generate rapid increases in website visitors when they first launched their sites, in recent years we have seen the visitor numbers stagnate for many B2B trade publications. This is clearly the case in the electronics industry where in most Western European countries the number of page views has not increased according to Napier’s recent research. Website display advertising revenue is limited by the number of monetizable pages (unless you are willing to increase the number of ad units per page). With cost-per-ad-unit falling at some publications this means that in a time of relatively high inflation, publishers have seen the maximum revenue they can achieve from ads on their website decrease.
Of course, there are other sources of income including newsletters, email rental and lead generation, but these are also typically maxed out with advertisers apparently willing to wait for slots rather than pay increased pricing.
The Options
On the face of it, there are few good options open to publishers. Let’s look at the potential ways that they can deal with the increase in costs and stagnant revenue.
Some publishers are still generating a significant income from print. This does give a lot of control and allows as many pages as they want to be published. The costs of print, however, have increased significantly: both the cost of printing a publication and mailing it have grown significantly. So the print publications are often then forced to reduce circulation.
Digital magazines seemed like a great option. I actually have a couple of digital magazine subscriptions, but even I know that I am definitely the exception. Few people are reading magazines in digital format and so digital “flip-book” publications have not been the modern version of print that many hoped.
One option would be to grow the share of the website pages viewed in the industry. This is somewhat of a zero-sum game, particularly when it comes to organic search traffic: the reader is probably not going to read more pages if publications put more effort into SEO.
We have seen some publications broaden the things they cover to try to grow the available market of readers, but care needs to be taken as too broad a remit will devalue the publication to advertisers who want to know that as many of their ad impressions as possible are hitting potential customers.
Obviously, diversification is an alternative. In addition to direct email, publishers can offer paid-for products such as directories or vendor selectors, while events – particularly face-to-face events – are often highly profitable sources of revenue. Both of these, however, cannot be scaled beyond a small number of products, so are quite limited.
We’ve seen publications be purchased by vendors. Arrow’s ownership of Aspencore is the biggest example by far, but they are not alone: for example, Mouser’s parent company owns Electropages (the publication from EPM). In these cases, however, the owners have not chosen to buy the publications and use them as mouthpieces for their businesses. Although they have clearly brought value to the owners that go beyond their publishing activities, both Aspencore and EPM seem to be required to run as profitable businesses by their owners.
None of the above approaches seems to offer much of a solution, so we have inevitably seen a squeeze on costs. Ultimately this means fewer editorial staff, and sometimes fewer salespeople, which will weaken the editorial proposition or potentially reduce revenue.
The Ojo Yoshida Report – A Brave Test?
One publication that is very different is the Ojo Yoshida Report. Founded by Bolaji Ojo (Publisher & Managing Editor) and Junko Yoshida (Editor in Chief), they have taken a different business model: subscriptions. This is a brave move: will they be able to persuade people to pay money for a product when there is so much free content available?
Of course, they are both highly-respected journalists who have been in the industry for a long time. Their great connections mean that they will not only have access to some of the most influential industry figures, but they will also have connections with companies that could spend significantly on subscriptions.
They have also chosen to target their publication at the management tier of the electronics industry. Although the information is clearly relevant to engineers at all levels, the content will be particularly useful to executives, and therefore to an audience that is probably not particularly price-sensitive.
The publication is an exciting experiment. It’s a brave experiment. I really hope it succeeds.
Will the Ojo Yoshida Report be Successful?
In the past, we have had successful publications that relied on subscriptions. In Germany, engineers have paid for publications. Many years ago I was an avid paid reader of Microprocessor Report: an essential publication for anyone involved in the microprocessor industry at the time. If subscriptions have been successful in the past, I see no reason why they can’t work today.
So I’m optimistic. It will be fascinating to see if the Ojo Yoshida report is successful. But it’s probably not an option for most publications: inevitably it’s likely that only a small number of titles can successfully run a subscription model as readers will limit how many they pay for. So although this might be paving the way for a small number of paid publications in the electronics industry, it’s probably not a solution that will work for most of the titles out there.