Penton Acquires EyeTraffic — and an Online Business Model?

B2B publisher Penton announced today it purchased DC based online marketing firm EyeTraffic.  Due to the seismic changes that have buffeted b2b publishing in the past few years, this acquisition made a lot of sense to me.

Trade magazines have been decimated by the rise of the Internet. As eyeballs moved online, the b2b publishing business model did not. This led to massive advertising declines and editorial layoffs. And it happened so fast, relatively speaking. Just dial back a few years and think how important (and thick with ads) magazines like Industry Standard, Business 2.0, Information Week and eWeek were to getting your technology message out.

This point was made brutally clear when TMCnet pitched me in early 2010. Their clear message was trade mags are dead, and TMCnet was scooping up all the advertisers with a different model. They hire all the out of work writers to write sponsored editorial, mix it with aggregated content, sprinkle with SEO magic and promise a certain number of online leads per month.

Putting aside questions of editorial and lead quality, the pitch made sense. Here’s my post from last February for more detail.

So now it seems Penton is fighting back. I respect the fact that Sharon Rowlands, CEO of Penton, spelled it out in plain language in the press release:

“Our senior team has felt for some time that a marketing services offering – including online lead generation for our clients – was a critical component of our growth agenda,” said Ms. Rowlands.  ”EyeTraffic forms the cornerstone of such an offering.”

Strategic direction is vital, but execution will also be key. How do you maintain editorial excellence with this model? I’ve had fascinating conversations with veteran trade reporters I’ve known for years who have shared their frustrations on how things are now based on pageviews. They say editorial decisions are made based on number of  clicks stories receive, and thorough and balanced reporting is suffering as a result. How much worse might it get with this new guaranteed leads model?

But that’s a post for a different day. In the meantime, good for Penton and good for EyeTraffic, a local DC firm. George Assimakopoulos, head of EyeTraffic and soon to be head of digital sales for Penton is a graduate of Raul Hernandez’s Proxicom. Of course with both companies private, there was no disclosure of a sales price.

It might seem strange that I wish this a successful marriage. After all, Strategic Communications Group has built a track record of success counseling b2b and b2g clients they can do this themselves — publish vertical specific content that attracts a high value audience, and then appropriately monetize that audience to support their business objectives. We’ve done this for clients like Microsoft, BT, Cisco, Monster, EMC and Neustar.

But life is not a zero sum game, and there is plenty of room for multiple successful channels in a marketing plan. For example, I never would counsel a client to stop advertising, or email campaigns or conferences or whatever other channel has proven successful for them. You always need a multi-prong approach.

The Penton publication I’m most familiar with is Telephony. Or should I say was, since it’s now known as Connected Planet (and for some reason is nowhere to be found off the Penton web site). Writers like Carol Wilson, Rich Karpinski and (more recently) Dan O’Shea are experts in their vertical of telecom infrastructure and produce some of the best reporting on the subject. I’ve enjoyed and learned a lot from their reporting for many years.

Penton went through a so called “pre-packaged” Chapter 11 bankruptcy 13 months ago, allowing it to shed debt and secure additional working capital. They need to get this right. The entire online publishing ecosystem — publishers, aggregators, readers, advertisers and even PR firms — will be better off if a successful online b2b publishing business model can be proven and solidified.

The Death of Media? A Chat with TMCnet

My job as a communications professional often means I counsel clients on all types of marketing efforts. This is especially true because for some clients PR lives within a broader marketing P&L. So I was interested when a representative from the Technology Marketing Corporation (TMCnet) contacted me and offered to meet today.

I’ve been aware of TMC for a long time, and wanted to hear about its evolution. It started out like many other trade media organizations — a magazine, some events and a web site. They have changed, and for the past few years I’ve seen them as pay-for-play from a media pitching standpoint. Anthony and Matt spelled out the evolution for me and my colleague Margaret Brown this afternoon.

They told us that bad times for trade publications are great times for TMC. Former competitors for advertising dollars in the tech space like Telephony Magazine and RCR have folded or greatly reduced pages and staff due to a big drop in advertisers. TMC has stepped into this void, offering advertorial packages that include syndicated content, original content, SEO support and social community features.

Advertisers can build an online community based on keywords and content. As the trade press die, TMC scoops up the advertisers, and some of the editorial talent as well. Anthony said the company has 37 editors in-house, with about double that number as stringers. In fact, Matt said the same companies that bemoan the decline of their favorite titles are the very same who have moved their advertising dollars away — he said “they’ve killed the trades,” not TMC.

It’s the same phenomena that we’re seeing in the PR space. The Internet has made everything measurable (though not always easily trackable), and social media allows for communities in which individuals self-identify and congregate based on shared interests. This is the seismic shift, and is a huge opportunity to make the effects of any type of marketing effort more quantifiable.

In the case of PR, it’s much more measurable than a placed story, and for advertising it’s a lot more measurable than a display ad. The metrics now are pageviews, visitors, clicks and downloads. The offerings are tiered, with promised levels rising with the monthly spend. I found the presentation extremely logical, and I’m sure for some companies it’s a smart buy.

So is coming at it from either angle, PR or advertising, “better” in some way? The answer depends on your perspective, and I don’t think it’s a zero sum decision. Strategic has been able to generate the kind of traffic levels some of the TMC tiers promise; we just redesigned our site to highlight client success stories from BT, Microsoft and Monster among others. And I think there will always be a higher value attached to a story or article secured from a publication that has no business relationship with the company featured.

At the same time, I would never counsel a client to stop advertising just because they’ve engaged with Strategic. That doesn’t make sense — effective marketing will always employ multiple disciplines.

Today was another resounding confirmation of where the market is going, however. TMC is moving aggressively by adapting the industry ad buy for the new online reality. PR firms had better do the same kind of adapting of their specialty, or risk dying with the trade publications.

The More Things Change…

How consumers are tracked online has been an issue for years. Until recently the main vehicle for this tracking has been the cookie, a small file placed on a visitor’s browser that identifies repeat visits and online activity. The latest chapter of this debate to reach critical media mass concerns Internet Service Providers (ISPs) contracting with companies to place hardware inside their networks to track all user online activity. This tracking produces profiles that aim to target advertising of interest to users, better supporting the online advertising market and giving ISPs a slice of the revenue.

Saul Hansell of the New York Times wrote a good article recently that has attracted over 60, mostly angry comments:

http://bits.blogs.nytimes.com/2008/04/03/can-an-eavesdropper-protect-your-privacy/

Bobby White of The Journal had it back in December: http://online.wsj.com/public/article/SB119690164549315192-9g6E0Km1JMR4eAm55Es_16QrvkU_20081205.html?mod=rss_free

The technology has progressed, yet these are the same exact issues I dealt with when I was VP of Corporate Communications at Advertising.com. It was the beginning of the pay-per-click (PPC) era, and cookies were a new and scary concept. People were upset that their travels could be seen across the Internet — recall the famous New Yorker ad with the caption “On the Internet, no one knows you’re a dog!” Well, that level of anonymity was never accurate, and it’s getting less so every day.

Back then (circa 1999-2000) we were active with industry groups like the Network Advertising Initiative and the Online Privacy Alliance and worked hard to educate consumers regarding exactly what was happening when they were online. We (and hearings at the FTC) helped put in place a set of principles that tried to balance the needs of advertisers and the rights of online users. Basically they’ve been in place since then and encompass:

1. Adoption and Implementation of a Privacy Policy

2. Notice and Disclosure

3. Choice/Consent

4. Data Security

5. Data Quality and Access

The online advertising market has grown immensely since that time, growing to $21B in 2007 according to the Internet Advertising Bureau and PricewaterhouseCoopers, who have put out the best numbers since the late 90′s. I understand and sympathize with ISPs that don’t just want to be “dumb pipes” and want a piece of the economic activity their networks support. And I get the fact that ads that are more and more relevant are a good thing for consumers in theory. But there’s a big difference between cookies — which as a web user I can delete at any time — and having my ISP share all my online activity with a third party.

Most of the media coverage on this includes claims there will be some kind of consent given, but how clearly will it be spelled out? Supposedly there will be safeguards so the data can never be personally identified with me — but what exactly are they, and how will they be enforced? Surely there will be an economic incentive to include more and more personally identifiable information to justify higher advertising rates.

And what’s the benefit to me as a user — more and more advertising, albeit the “right” advertising based on my interests? How compelling to the average consumer does the advertising industry really think that is? There isn’t enough transparency about exactly what is going on. If companies are not very clear about what’s happening, there is a huge risk for a big public backlash and resulting clumsy government regulation.

There’s a very old and established way that a free market economy assigns value to something, and I’m surprised none of the coverage I’ve seen mentions it. It’s pretty simple — PAY PEOPLE for agreeing to allow their online activity to be tracked. I pay good money every month for my broadband access, too much in fact if you compare it to what people pay in other countries.

You want my data — then take $10 off my monthly bill, or guarantee me my rate won’t go up as long as I participate. Be very clear about what’s going on — for example, as clear as my monthly bill is — and cut users in on the action. That bargain IMHO will be accepted by a good percentage of consumers, and represents a big first mover advantage (market AND PR) to whatever major ISP jumps in first.

7/1 UPDATE — ISPs are backing away, better offer that cut to end customers fast:

One week after Charter Communications voiced concerns about controversial behavioral targeting company NebuAd, two other Internet service providers appear to be distancing themselves from the company.

http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=85791&Nid=44479&p=303102

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Organic SEO vs. PPC

Good article today by Aaron Wall at SEOBOOK. He compares cultivating your organic SEO over the long haul vs. the quick hit possible with pay-per-click campaigns.

I was with Advertising.com when we invented PPC — though I guess early hires at ValueClick might dispute that claim. PPC was new, exciting and promised a level of reporting unheard of from standard broadcast advertising sold on a cost-per-thousand basis. Those were incredible days.

Today PPC remains very popular but there are drawbacks. One big one Aaron cites is having any successful strategy pounced on by so many others, making the success very shortlived. He compares this against the longer term but undeniable benefits of organic SEO, along with some insightful observations on human nature:

This is why I like SEO so much more than PPC. Most people are too lazy to spend years researching their topic, years building a brand, years building links, and years building social and customer relationships. We are afraid of failure, afraid of success, and afraid that we are investing too much in one place. But, if someone sees me ranking in the organic results they can’t just clone it unless they know SEO well, and are committed for the long haul. In many cases, knowing SEO well means having capital, time, passion, and a lot of marketing knowledge.

Here’s the full post