IDG's Carrigan: Mobilizing for mobile

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Bob Carrigan is a busy man. In addition to his day job as CEO of IDG Communications (the media subsidiary of IDG, a $3.2 billion technology media/research company), Carrigan last month was elected chairman of the Interactive Advertising Bureau (IAB) – where he’s hoping to attract more B2B publishers. I sat down with Carrigan at the IAB’s annual meeting this week in Palm Springs, Calif., to talk about one of the event’s prevalent themes: mobile publishing. Here’s an edited version of our conversation.

eMediaVitals:Everybody gets that mobile is a game-changer for publishers and advertisers. But what impact will mobile have on publisher business models?

Carrigan: To be honest, we’re still sorting it out. We justify a lot of our investment under the umbrella of experimentation. We’re running into some roadblocks with existing distribution channels – there are some limitations to what we really want to do.  But there also are new opportunities that are presenting themselves.

You’ll see a mix of models. On a device that’s highly personalized, the ability to charge for content is a clear and very compelling opportunity – especially on the B2B side. There’s much more of a paid content mentality there.

Why is that?

In B2B, you reach very specific audiences that look to media to provide information to help them make purchase decisions. The challenge is for publishers to create new information products that users can really take advantage of. If you can figure out ways to distribute and present new content to them, and make it actionable for whatever screens they’re using, that’s a big opportunity.

One example is App Gems [from IDG’s PCWorld/Macworld unit], an app that helps users find other apps. That gets to what we’ve traditionally been about – a guide to help users find stuff. But it doesn’t look like a magazine. I’m not bullish on digital replicas of the traditional magazine concept, even with slide shows and videos – I still call that a replica.

The further you get away from the digital replica, the more you need to change your business models, your organization structures, your staffing – right?

That’s the challenge. But this is very much the reality of our world. And you need to go full bore into it: you can’t go into this muddy middle.

Is that the main lesson you learned from that print-to-Web transition?

Absolutely. You have to go full bore. It’s not a transition. The transition idea is the replica. It’s not orderly – it’s chaotic. Your revenue may go down precipitously. But if you’ve adjusted your cost side to the new reality, then it’s not about revenue, it’s about profitability and the investments you’re making going forward.

Eric Schmidt challenged publishers to adopt a “mobile first” approach. Is that realistic at this point?

There’s a way of structuring your business where you can consider the fact that things will be mobilized going forward. You can think about creating information products that lend themselves very well to the mobile environment.

There’s no question we’re trying to socialize this idea inside our company about the clear proposition for mobile. It’s challenging because the revenue proposition is not quite there. But it will catch up. It happened with the Web – and that’s now our core revenue stream.

What types of investments are you making?

We’re applying some R&D money to this. We’ve created a mobile center of excellence by empowering a business unit [PCWorld/Macworld] that has real customers, real content, real brands, and we’re asking them to experiment and develop solutions for the present and future. And the rule is they have to share that information with the rest of the company.

The single most important thing a media company can do to free up investment dollars is to not subsidize legacy businesses. For the businesses that aren’t growing or are declining, we’re pretty religious about managing for profitability so that every year the contribution that these businesses make is the same or more. If the top line is going down, you have to adjust the direct expenses appropriately – and get out in front of it. Subsidizing legacy products is the curse of many media companies.

Creating margins for investment in the future is something I focus on every day. We still have to hit our aggressive business goals, but we’re always looking at how we can we free up investment money to make sure we’re experimenting for the future.

How much of your budget is dedicated to mobile?

It’s significant, but it’s not Google R&D. Suffice to say we’re investing millions around the world. We have an active group of global mobile experts who constantly convene and share best practices. We’re syndicating that knowledge around the company and supplementing with R&D dollars. And we’re encouraging all the business units to do their own skunkworks efforts.

Everyone gets the urgency. The PCWorld/Macworld sites are approaching 10 percent of their traffic coming from mobile. When you see that, it starts to get serious.

There’s not a lot of clear revenue through mobile. It will take a while to grow, but when it does, I think it will grow like a hockey stick.

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