The big leap: More publishers ramp up marketing services

The roles of publishers, advertisers and agencies are becoming less distinct as brands become content creators and publishers become marketing strategists. The Moira Group’s Mark Holdreith calls it “the big muddle.”

For many publishers, the muddle means money. Increasingly, publishers are finding new revenue opportunities in marketing services, offering a wide range of programs from custom publishing to website development to event production. Hanley Wood, a B2B publisher that serves the housing and commercial construction industry, increased its business with one client tenfold in just two years, primarily through marketing services. The Integrated Marketing unit of consumer magazine publisher Meredith has marketing services revenues of about $175 million, according to the Wall Street Journal, and grew by 13% last year, partially offsetting the company’s 15% drop in magazine ad revenue.

According to American Business Media, 20% of its members are engaged in or currently developing marketing services. These services are a big leap from the traditional buyer/seller model that for decades defined the advertiser/publisher relationship.

A more collaborative approach

Now, publishers are taking on more collaborative approaches with agencies and marketers to create programs that connect brands with target audiences. Publishers are finding new ways to leverage their core skills – good journalism, brand reputation, and a focused and somewhat loyal community – into compelling programs for brand marketers.

“We’re journalists, not copywriters,” Michael Hurley, vice president of corporate sales at Hanley Wood, said during a panel discussion on marketing services this week at the American Business Media annual conference in Charleston, S.C. “We market our brands. We know how to drive engagement. That gives us the chops to get into this business.”

Hurley sees three basic models for marketing services:

• The ad-centric model, built around maintaining and increasing media sales. This is “old school” marketing content such as advertorial, he said.
• The audience/market-centric model, which leverages a publisher’s core editorial capabilities to provide custom content such as blogs that enhance brands.
• The "Meredith" model, in which a publisher creates a separate marketing services arm to serve a broad range of customers – not just those that support its media brands.

Hanley Wood has focused on the second model to build its marketing services revenue. Its biggest marketing services client is the Propane Education and Research Council. Hanley Wood provides a range of services for the council including website development, e-newsletters, research, and trade show program development. Marketing services accounted for two-thirds of the $3 million in business Hanley Wood received from the Council last year.

These types of services require a shift in approach to traditional selling and campaign management. Hurley said Hanley Wood is working to get better at measuring the effectiveness of programs and proactively making changes to those programs. One example: An e-newsletter that Hanley Wood was producing for the propane council was getting low open rates. Without involving the client, the team took steps to change the content, which helped to increase open rates by 1,000%.

Hurley said Hanley Wood is still figuring out how far it wants to venture into the marketing services business. “As we go through business models, we have to figure out how deep we can go on our own,” he said. “We may be able to create a richer partnership by collaborating with agencies.”

Those agencies include Miller Brooks, which finds itself working more closely with publishers such as Hanley Wood on behalf of clients.

“Collaboration happens on a day-in, day-out basis,” Miller Brooks partner Tom Miller said at the ABM conference. “We invite media to the table to discuss the client’s needs as soon as a program kicks off.”

Competing for dollars

Not all agencies are as open to this collaborative approach. After all, publishers offering these services are in effect competing for dollars from brand marketers. Publishers will need to carefully manage these relationships so they don’t end up cannibalizing existing media programs – unless they believe the tradeoff is worth it.

Miller offered 10 thoughts for publishers considering a move into marketing services:

1. Think carefully before you begin to compete with your current customers.
2. Assess your core strengths. You can’t do C+ work against an A+ player – you’ll damage your brand.
3. Don’t try to be everything to everybody.
4. Learn to play nice together.
5. Focus on adding value to the client. It’s not just about you making money. If you add value, you’ll see payback quickly.
6. Be careful what you wish for. When you get into services, you may find out it’s not what you thought it is.
7. Can you be impartial? Can you do what’s best for your client in a collaborative environment working with 10 other services firms?
8. What’s the possible impact of marketing services on your core business? Can you take a space rep and make him into a marketing strategist?
9. Are your marketing services aligned with the way your customers purchase these services? Don’t do things that put your company in conflict with their other suppliers. This will only confuse the client.
10. Is marketing services just a business or is it a passion?