B2B Media Has a Content Problem and Few Are Talking About It
By: Jacob Cohen Donnelly
There are many things I admire about B2B media. Far earlier than consumer media, B2B recognized the importance of capturing and activating 1st-party data. Understanding who your audience is has always been a critical part of running these businesses, so investing in the right tools has been front and center.
However, that doesn’t mean that B2B media is flawless. In many respects, it suffers even more than consumer media in one key area: content.
On Tuesday, I wrote about New York Magazine’s profile of the media industry. In my piece, I expressed intense frustration about the shock that creating something people would pay for is a business model. The problem is, for much of the B2B media industry, content is an afterthought.
In many cases, someone simply regurgitates a press release. There isn’t an ounce of originality in it. In other cases, there is one editorial person covering multiple sites—fighting for dear life to ensure the website has something original on the homepage. There’s plenty of sponsored content, lots of lead generation, and a plethora of guest posts, often written by vendors.
None of it is worth paying for. I get that much of B2B media has historically been advertising-supported, free content. Even back in the era of print, many of these operations were controlled circulation where a reader gave all their 1st-party data in exchange for a magazine subscription. A reader’s willingness to pay wasn’t important.
But that has pervaded throughout the industry where there isn’t a deep appreciation for content. A big reason for that is the competition wasn’t that deep. Think about a given industry. Who is creating content? Maybe there’s a B2B publication. More likely, there’s an association where the content isn’t that important. Case in point, SmartBrief built an eight-figure business being the outsourced newsletter creator for associations.
B2B media, for the most part, just doesn’t care about content. You can see it in where they invest their money. At the Omeda Idea Exchange back in May, Workweek’s CEO, Adam Ryan, had everyone raise their hands to answer three questions:
- Best part of your business
- Where would you invest more to make the business better in the long run?
- Who is the highest earning group in the company?
The answers were Operations, Revenue/Sales, and Content. Many people raised their hands for content in #2, but very few people answered content for #3. And as Ryan said:
This is what’s going on… this is what’s been happening. We all say it, we all want it, we don’t do it.
The way we make our company better, the product that we create, the thing that actually people drive back to is content. Our words and our actions have not been matching and they haven’t been matching for quite a while.
You can watch the full discussion here titled Workweek – Adam Ryan featuring Jacob Donnelly of AMO. It’s well worth it.
And he’s spot on. As the business got harder and as margins got compressed (or private equity demanded higher margins), media companies made the decision to cut back further in their editorial departments.
This is a problem because we are entering an era where everything is getting harder. There is more competition than ever before while at the same time, distribution is becoming much harder. Both of those factors will hit the legacy B2B media players that don’t prioritize an investment in content.
On the competition side, there are thousands of newsletters popping up left and right covering so many different niches. Many of them are not good. Most of them suck. But some of them are figuring it out. A Media Operator was just another newsletter five years ago and now we’ve got a full-time reporter, multiple freelancers, and we are going after the competition.
Guess what? There are more like us. Workweek has gobbled up millions of dollars in advertising spend retail, marketing, healthcare, and more. At Morning Brew, we scaled our B2B business from under $5 million to $23 million in the three years I was there—with it expected to exceed $30 million next year. The competition is getting harder.
Now you might say that some of the harder-to-reach niches aren’t being written about; that it’s only sexy topics like marketing and healthcare. But you can bet that there is someone out there trying to figure out how to make an obscure niche work. When they figure it out, the audience is going to flock to them.
You might say, “but they don’t have the data, so good luck monetizing.” I’d respond that it’s far easier to fix a data problem than a bad content problem. The former is operational know-how; the latter is deeply ingrained culture. I spoke with a platform just yesterday that wants to help these newsletters make the pivot to becoming data smart.
And in a world where we are all fighting for attention, the only way you can compete is with great content.
Then there’s the distribution problem. A decade ago—heck, even five years ago—getting traffic from Google was straightforward. For lesser-known niches, search was a sweet driver of traffic. Social wasn’t too bad either. But now these platforms are pulling back on the amount of traffic that they send. That means we need to get more aggressive with our paid growth to maintain our databases that are being pummeled with daily sponsored dedicated sends.
The problem is: who wants to spend to acquire a newsletter subscriber when the content is so bad that the reader is going to churn? Customer acquisition costs will go through the roof.
The only way you can continue acquiring an audience is if you have something worth reading. A regurgitated press release isn’t the answer.
Now, I totally understand that a big reason for this is the need to increase margins. With private equity owning such a large percentage of our industry coupled with the EBITDA covenants for loans, it can be hard to make the necessary investments in content. That’s a long-term play and most private equity is only thinking about the next 3-5 years.
But we have to stop and ask ourselves: if we’re building these companies for the long haul, how are we going to compete? The longer we drag our feet on it, the harder it’ll be to fix it. It’s time to call a spade a spade. The B2B media space doesn’t invest enough in content. It shows. And it needs to be fixed.
In 1997, former Washington Post owner and publisher, Katharine Graham, went on public radio to talk about when she took the company public and why she released the Pentagon Papers. In it, she said:
I was this kind of nutty woman who was taking these risks with the company. And I started talking about excellence and profitability go hand in hand. And I really did it to show Wall Street that I cared about profitability because they thought I didn’t. But in fact, I think it’s true. And I really believed it – that if you invested in the editorial product and build up the production and business side, I really believed it – that if you invested in the editorial product and built up the production and business side, that it would work. And to a large extent, it did and has.
And she was right. Excellence and profitability go hand in hand. We should take that seriously and create excellent content. Otherwise, over the next few years, we’ll see more publishers struggle.
