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Thursday, May 18, 2006

A Customer Speaks 

My business partner Scott Chase and I attended min's Sales Executive of the Year Awards breakfast yesterday in New York. The house was packed, and it was great to watch the magazine industry recognize its best salespeople and sales team leaders. There's no link yet to the winners on min's website, but I'm sure there will be one soon.

The best part of the event, for me, was keynoter Donna Campanella, director/team leader, media for Pfizer, which is the tenth largest print advertiser in the US, and the largest in the direct-to-consumer (DTC) pharmaceutical area. Donna buys a lot of print.

She also has a lot of personal affinity for print. Emotionally recounting her mother's struggles with Alzheimer's, she described tearing DTC ads for Alzheimer's medications from magazines, and using these as the basis for discussions with the doctor. "There's nothing like the power of DTC advertising when it really changes people's lives."

Campanella also recalled writing a magazine story about the adoption of her son. "I never realized how it would resonate and connect with the readers of that magazine," she said. "I saw first-hand what reader engagement is and how strong editorial product is behind everything."

But Campanella soberly assessed the current position of magazines for media buyers. "In an ever-changing media landscape, they're just one tool in our arsenal to reach audiences."

That's standard-issue stuff. But her suggestion that magazines learn from how television networks now package advertising programs around digital offerings was a good one. "I'm looking for the big idea. We want digital multi-platform deals." The issue, for her, is that most magazines haven't really gotten beyond offering static banner ads.

And, she added, "I dislike off-the-shelf programs. I don't believe you can offer me a digital multi-platform program, with your magazine at the core, without talking to me first."

Campanella believes magazines can effectively offer big multi-platform ideas, but she wonders: "Do buyers have the competency and skills to look at these extensions? Can ad salespeople effectively represent their digital offerings? This all may require expanding the skill sets of the staffs of both the advertiser and the magazine."

I couldn't agree more. I believe that strong magazines build a fundamental affinity with their readers that's hard to match in other media. And that affinity can be leveraged in just about any way that readers desire. But I also believe that we hurt ourselves by selling what we know and what we have. It's hard enough for an ad salesperson to sell a booth for a trade show, or even to sell two magazines at once. Now we need that salesperson to also sell digital solutions and multi-platform packages. The future financial success of our print brands is in the hands of our frontline sales teams--do they have the training, the compensation, the ability and the desire to develop and sell media-agnostic solutions to our customers?

Side note: Regular readers of this blog know that I think highly of the team behind the min brand of products. And they've just made that team stronger by adding my friend Paul Conley as an analyst for min's b2b. He'll be providing context to the ad page box scores that are the hallmark of min and min's b2b.

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Tuesday, May 16, 2006

Penton's Q1 

Form 10-Q for PENTON MEDIA INC.

Penton's Q1 results have been posted (see link, above). Revenues grew 1.8% to $54.3 million over the same period last year; net income shot up 201.1% to $5.46 million, and adjusted EBITDA rose 11.1% to $17.2 million.

There were some timing shifts in the events category which moved about $1.6 million in revenues from three conferences from the first quarter to the second quarter, but even so, events revenues were up 5.3% over the prior year, primarily due to improvements in Penton's Expo West event, which set attendance and exhibit sales records this past March.

Publishing revenues declined 2.7%, but this decline was offset by a 24.1% increase in online revenues, which clocked in at $5.1 million for the quarter.

I continue to be impressed with Penton's progress in the online revenues area--which now accounts for a hair under 10% of total revenues. (By comparison, Advanstar's online revenues for 2005 were about 1.2% of revenues, though this proportion whould be increasing this year.)

For more on the valuation of Penton, of which I own some shares, see this post, and make sure to read the comments area as well, where former Penton CEO Tom Kemp provides an alternative read on the valuation situation.

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