Those savvy business-to-business media investors have only themselves to blame

[Note: I am friends with William Pollak and this post says I agree with him totally. Well, except for one thing.] [Later: See comment below. Perhaps I don’t agree with what Bill is saying as what I agree with are those things he’s relaying from others. I don’t actually know, from the post, what his opinion is.]

In a guest blog post this morning on The Media Briefing Experts’ Blog, veteran B2B media executive William Pollak says that investors are not happy with b-to-b media companies…and the “messages they are getting from us – the operators of these businesses – is not making them feel any better.”

What is that message? Here’s just an excerpt of what he’s hearing from “the investors.”:

“…What I find a little surprising is the more general negativity toward all advertising-supported businesses – print and digital. These savvy investors believe that the upheaval in the advertising business has only just begun, and will swamp traditional carriers of branded print or banner advertising. Some cited the enormous importance of Facebook and social media in general in the future allocation of ad dollars.

Others talked about more and more custom marketing by individual marketers who have the ability to cut out the middleman and go direct to their target market. And still others saw the rise of Big Data and analytics as driving more business toward highly targeted lead generation/scoring services, with the money to support that coming from ad budgets. Any way you slice it, traditional B2B media are made to look like the losers when those tidal waves hit.”

As I have spent the past two decades preaching what Bill is saying, with what he says here — and with his assessment that the horses have left the stable on many things that could have helped traditional business-to-business media companies transition to what is next — I clearly agree with Bill on these (and to be fair, there are some innovative companies that have, but in general, Bill is dead-on).

As my company for the past 20 years has been, and still is, in the business of cutting out “the middleman” and going direct to a marketer’s target, yes I agree with that too. Analytics, ditto. Data, that’s how we got started.  Lead generation, the same.

When it comes to pretty much everything Bill says, I’ve been among the few voices crying the wilderness for big part of the past 20 years. So, yes. I’m with you, man.

There’s just this one thing

Where I disagree with Bill is this: His use of the adjective savvy in front of the word investors — as if it were the business-to-business media companies who were the ones holding onto the past while these savvy investors were catching onto a new wave.

Wow. It takes some incredible bending of history to recast the perpetrators of all sorts of train wreck investments into “savvy.” (Note: I’m referring to the type of professional investors Bill is: the professional private equity type.) Unless, that is, you define savvy as who ever sells out before that last guy who can’t sell is left holding the bag.

De-constructing the unsavvy investments in business-to-business media over the past ten years by  savvy investors and demonstrating how it was they, not the people who were experts in business-to-business media who worked at the companies they purchased, who destroyed the geese that could have been laying golden eggs, would be a fairly easy assignment if I had the time, or really cared.

But I don’t.

I won’t, but I could easily, easily recount how several savvy investor buy-outs of extremely profitable b2b media companies and stellar brands were followed by the savvy investors installing into a key decision-making role some idiot who may have worked at the digital division of a TV network who was going to take that B2B company to Nirvana — but who instead led it down the path to Kurt Cobain.

These savvy investors installed some of biggest jack-asses you can imagine. Really. They were idiots who knew nothing about business to business media — or business, for that matter.

They fired people and merged companies and bought other companies for amounts that made some previous owners look very, very savvy. If they were lucky, they sold out to the next guy who was left holding the bag — thus, making themselves savvy.

And anyone with a brain who worked at these companies left because those savvy investors had put idiots in charge.

I’ll stop here. You know where I’m going. You know that I am in the part of the media world that is 100 percent marketing services and analytics and everything that is not traditional.

But if you wait until you hear something from savvy business to business media investors, I hate to inform you: They’re only savvy when it comes to playing musical chairs.

  • John Bethune

    As someone who’s been both the beneficiary and the victim of “savvy” private equity investments in B2B, I have deeply mixed feelings about private equity as a whole. I suspect Bill Pollak feels the same way. I can’t complain about that. But when it comes to other actors on the B2B stage, I wish he were a little more clear.

    Whether it’s because of deep ambivalence, political caution, or inadequate editing in his column (that “messages … is” subject-verb agreement error may be just the tip of the iceberg), I can’t really tell where he stands on almost anything. When you, Rex,  write that you have been preaching “what Bill is saying,” you’re really agreeing with what those investors are supposedly saying–he’s just relaying their message. He writes that he doesn’t like that message–but never quite says whether that’s because it’s true or because it’s not. 

    Where this ambiguity gets irksome for me is when he writes that “there’s a sense” that sales and circ are just fine and that the problem is in B2B newsrooms, and that “our news editors are perceived as bastions of Old-Think.” The passive voice here is a cop out. Who believes these things? The investors alone? Bill too? It’s not clear.

    I for one don’t believe that editors are any more to blame than the rest of the participants in the steady decline of B2B, “savvy” investors included. Cluelessness about new media has been evenly distributed among all. 

    Bill may agree. But by reading his article, I can’t really tell.

  • John, you have a good point. I was agreeing with what the investors are saying (but my disagreement with them is that they are too late themselves. For them to now act as if they are insightful into the future is amusing me.

    As the CEO of IDG has already given this post an Amen (on Twitter), I will note that one of the few business to business media companies that has provided others with a successful path to follow is run by people who were years ahead of the investors with whom Bill has talked. 

    One can say that IDG’s reason for success is the market they serve, but I can point to other business to business companies that served the same market that have gone by the wayside because, unlike IDG, they did not view their opportunity as serving people who work in an industry (or have a passion for technology) — they saw their opportunity in terms of selling pages. 

    I guess I am also letting my prejudice in favor of privately held companies run by founders and those who understand the industry — rather than MBAs and finance suits.

    By the way, 12 years ago this year, I made a presentation to a group of about 30 very savvy investors that was an online business-to-business network and search engine that enabled advertisers to insert ads that related to search queries they were asking about.

    To a person, these savvy investors pummeled me for even suggesting that advertising on the internet was a viable business model — and I fought back (not smart on my part).

    “But this is advertising is in the context of searching for wisdom in making a purchasing decision,” I argued. (This was before Google’s Adsense program.)

    That experience (and the incredibly bad timing in which it occurred) has made me forever suspect of any professional investor who is described as savvy.

  • patricksmithjournalist

    In fairness to Bill, his thoughts are simply based on conversations he’s been having with some PE people – other investors and routes to investment are available. There’s no doubt that some PE people made some shoddy decisions in the last 10 years in the management of professional media in the UK and US – as with all investments, people get it wrong. But it needn’t always be a case of corporate musical chairs, with idiots being installed left, right and centre.

    What I’m interested in is this: where is the big investment going to come from? With many of the big B2B players looking to sell off publishing assets (in the UK at least – I can’t think of many that aren’t actively looking to sell) PE offers one way to inject investment at scale.

    Trouble is, it’s still quite a leap for some to understand the 100 percent marketing services and analytics things that you do Rex, and that’s Bill’s point.  Some people aren’t moving fast enough.

  • I appreciate what you are saying. And after John Bethune pointed out a similar disconnect in my saying I agree w/ Bill when what I meant to say was, I agree with what the PE people are telling him, I tried to add some shading to my opening caveat.

    Also, this post was written on the fly as a comment, so, like everything you read here, it is probably not what I actually meant to say (that’s only half-way a joke).

    My point is this: I agree with what the PE people are telling Bill. However, it is what they should have been telling Bill three years ago. Or five. But back then, they would have been chasing whatever that eras cliches were.

    My bottomline: I like business to business media people. I like the people who work at the investment firms Bill has been talking with. 

    But it’s 2012. 

    The past failures and current failures are not being committed in a void. Everyone should know everything there is to know about opportunities and threats.

    If business to business media companies can’t figure out what they have that alternative channels of marketing and media have, then they should die.

    However, don’t think that future success is doing what PE wants you to do. Sure, it is the pathway to successfully raising money or getting backed. But no one has the knowledge of what the future of advertising holds. When Google diverts $100 million of its own marketing budget to traditional media (as reported the other day in the WSJ), it should tell you that digital and online advertising is not the 100% answer for 100% of the time.

    If they’re not obsessed with five years from now, both media execs and PEs should probably pick  careers in another field. When you’ve waited until opportunities have become buzzwords that PEs use, you’ve waited too long.

  • Doug Shore

    Rex, over the past 40 years or so, I’ve been involved with and have competed against B2B companies that were family/founder owned or controlled, publicly owned, private equity owned or controlled, association owned, foreign-based and domestic. 

    I have found no monopoly on (truly) savvy investors or on idiots in any form of ownership. The big PE failures (and successes) may get more publicity, but there have been plenty of failures (and successes) in the family/founder owned sector, usually on a smaller and less visible scale.

    (Disclosure: I have been the CEO of a privately held, founder-owned
    company that sold a majority interest to private equity, profited both
    personally and financially from the relationship, and continue to be a
    private equity investor.)

  • Doug, as you are the Dean of the 12 Readers of this blog, you are obviously and always correct. And, okay, I was painting my rant with a broad brush. I was saying, with little success, that there’s blame enough to spread around on who and what is innovative and where people should be focusing their efforts. 

    I will remind people that you are the author of the most re-quoted (by me) comment ever to appear on this blog.

    It was a reply to a similar rant-post in which I explained why I dislike the use of the word “content” as an umbrella term for all forms of expression —  I feel it demeans the value of great writing, photography and design.

    Your reply was something like, “Rex, what do you call that page in the front of your magazines where you list all the stories?”