When Lead Gen Becomes a Subscription Business

Over the past five years, developing a subscription product has been a primary focus for media companies to diversify away from advertising. But the focus was on getting consumers to pay for content, which has always appeared to be the lowest-hanging fruit. If we’re creating all this great content, why not charge for access to some of it, right?

However, a cohort of b2b media companies has found other ways to build subscription businesses without the content being the focus. Instead, their audience becomes the product. And what people are paying for is access to a qualified audience.

But let’s take a step back. Why do most b2b media companies offer lead gen as a core product? Unlike consumer marketing, which is often more brand-forward, b2b companies must push prospective clients to their sales teams. That means the marketing teams need to get leads.

When selling to consumer companies, the marketing team is the deciding voice. But in b2b companies, the sales team has so much control. If you can be known as a reliable source of leads to a b2b company, the sales team will consistently come back repeatedly. You might be dealing with the marketing person at the company, but it’s the sales team that’s got the power.

With lead gen, it is easy to track how effective an advertising campaign is. Even if we’d like to push the correct story about brand marketing in b2b, the reality is that performance is the name of the game. So, we’re forced to offer performance products, like lead gen.

The problem with so much lead gen is that it’s been quantity led. I remember talking with Tim Hartman, CEO of GovExec, at last year’s Omeda event. And this is what he said:

All lead generation markets have gone through this over the last five years where, if you were in the lead generation game five years ago, there were all of these lead gen agencies and data companies that were throwing quantity out. And you could hire this hip digital marketing agency, and they would give you thousands of leads and tell you they’re running them through lead nurturing. To some extent, it disrupted us. It was really hard to compete because it was a race to the bottom. I think lots of marketers were incentivized on quantities to fuel their CRM systems.

People weren’t getting quality leads. The pipeline wasn’t really moving for companies based on the quantity of leads and if it was, it was just because you had all the names in and your sales team was doing all the work.

As we got into account-based marketing in the last five years and as privacy laws have come to the fore, and as just the market was totally saturated, the quality of the lead became much more important. The gap between sales and marketing started to narrow. They needed the intelligence around the lead to do more of the work for them.

Maybe you have five sales people and they all need 10 hot leads a month. What’s to say you don’t need 20 sales people that need that same quantity of leads? Well, we can tell them that.

Many b2b media companies are stuck in that quantity rut. They are giving away so much of their databases because it’s what marketers demand. As the economy continues to sour, desperation for short-term revenue will see publishers give away even more quantity.

The problem is you’re selling your database to advertisers inefficiently. If you can’t grow and acquire enough subscribers to keep your database fresh, the advertiser will have all the leads they need at some point.

So, the push toward quality has become increasingly important. But how you define quality might be different from publication to publication. For many, quality might be a certain seniority. “We only offer decision makers to our advertisers so that they are getting value.” It’s true; this is quality. But it’s not the right quality.

Instead, the actual quality of a lead is determined by its likelihood to convert. A company will pay a lot more for a hot lead than one that is cold. Sellers would prefer this because it reduces how much effort they need to put into closing a deal. In addition, if someone has already shown an interest in something the company offers, it cuts the sales cycle down considerably.

And so, a growing number of b2b media companies have begun lead nurturing. Rather than offering a one-off digital download or webinar, they push the target audience through a funnel. At the bottom of the said funnel, the publisher gives the advertiser fewer leads that are of a higher quality. In some cases, publishers even connect to the client’s CRM so that as the lead pushes down funnel, it can automatically be actioned by the sales team.

This is gold; if you can execute this, the amount of money you make per lead is monumental. Additionally, you’re not selling your database to advertisers, which keeps the list unbelievably fresh. A fresh list means renewals, which means an ever-growing revenue foundation.

But what does all of this have to do with subscriptions?

Some media companies have figured out how to pivot from selling lead gen campaigns to selling subscriptions to a database of high-intent readers. There is a multitude of examples that are worth looking at.

The first is GovExec. It has a product called GovTribe, which provides consolidated federal contract and grant data. Knowing when new contracts come up is incredibly important if you’re a potential government contractor. And since they also have the contact information for said grants, you know when you pitch that person, their intent to act is high.

In the case of GovTribe, they took it one step further and created a tool to manage the business development process. Why even set up a Salesforce account when you can manage the entire process of acquiring data and managing business development in one place?

Then there’s Bisnow. It has a product called Biscred, which is a prospecting and sales enablement tool for the commercial real estate industry. According to its website, “our research team blends humans and machines to work in harmony. More than 120 analysts combine their industry expertise with technology and good old-fashioned sweat equity to comb through thousands of contacts a day. They painstakingly pinpoint the contacts you need—and filter out the ones you don’t.”

As far as I can tell, the tool does not show intent to take action; however, instead of promoting a bunch of white papers or webinars, clients can access a tool and find exactly who they’re looking for.

Then there’s TechTarget, a company I have been unbelievably fascinated with since I learned about it. It has a network of 150+ technology sites that get a lot of organic traffic from Google. So TechTarget can prove intent to prospective data buyers as users move through the technology content.

For example, imagine you were in the market for new cloud infrastructure. You land on one of TechTarget’s sites and read an article. Then you see a white paper, so you download that. Three days later, you search again and land on another TechTarget site. Because TechTarget has dropped a cookie on you and captured your data with the white paper, it can track precisely how many interactions you’ve had with content related to cloud infrastructure.

As a quick aside, do you see why a CDP and first-party data are so critical? Yeah, me too.

So, back to TechTarget. Sales teams can subscribe for access to TechTarget’s database. Then, when individuals have proven they are in the market for a specific product—typically with content consumption—the data is made available to sales teams.

And finally, there’s Informa and Industry Dive. This is why this acquisition happened. By combining a ton of the first-party data that Industry Dive has with the in-person events Informa hosts, you can imagine an excellent intent-based product that marketers and sales teams would pay a lot of money for. Not only does Industry Dive know who is reading content, which would show some intent, but Informa would know what panels and booths attendees visited. Add all that up, and you’ve got a ton of intent. We’ll have to wait and see what Informa cooks up.

In all these cases, you’re not just selling leads as a one-off. Instead, you’re convincing sales teams to sign up for a high-priced SaaS subscription. For example, G2 reports that TechTarget starts at $1,500 monthly and can go upwards of $9,000 (or maybe higher). So at $9,000, a company pays you $108,000 per year. That’s a chunky subscription business.

But this is unbelievably hard to pull off. You need to show legitimate user intent or provide a niche of first-party data that no one else can. That exists in all three cases I’ve described above. TechTarget has intent; GovExec can provide contract information with the right decision maker; Bisnow can provide filterable first-party information in the real estate space.

If you can pull it off, you become part of your partners’ sales efforts. The subscription remains as long as you drive quality and high-intent leads. That’s unbelievably compelling.

Thanks for reading today’s AMO. I am sure other companies are doing this, so if you know of them, please reply and let me know. Also, join the AMO Slack channel to discuss anything related to media. Have a great weekend!