Boy, that last post on B2B Media sure was gloomy! How about some root canal for light relief? Seriously, lets look forward to the bright future. In this post we will look at 12 firms that are doing very well as intermediaries between buyers and sellers in a B2B market. We call these the "12 straws in the wind of change." From these successes we will draw 10 general lessons about the future of B2B Media. We call these the "10 themes songs from the future."

12 Straws In The Wind Of Change

1. Google. OK, not a straw, more like a skyscraper blowing in the wind! Google is not a B2B Media company but they make plenty of money from B2B ads. Sure Google makes a ton of money, but what can they teach the rest of us? Google is an outlier; their business is unique. But when we look at the lessons from the other innovators, we can see that all those lessons can be learned from Google as well.

2. Craigslist. Traditional Trade Magazines had full-page display ads (expensive) and "classifieds" (cheap). They put some of these classifieds into a "13th edition" of the magazine and called it the Buyers Guide. They did not rely on classifieds as much as newspapers did. But Craigslist took the air out of that market for everybody. A few really big players like Google and Microsoft are trying to pump air back into that market. So how can a niche player win? Ask Alibaba (big niche) and ASI (small niche).

3. Alibaba. The first two straws can hardly be described as B2B Media. They do B2B Media business as a side effect of their model. There is a lesson that we can learn from that. But what about a pure-play B2B Media success story? That is Alibaba. With a valuation well over $10 billion, they are certainly a success story. They connect business buyers and sellers, which makes them B2B Media by my definition.

4. ASI. Alibaba is in a huge market. But ASI is in a tiny market that most people would not even think about. This is the Advertising Specialty Institute. You know when you want a Coffee Mug with your company logo on it? Where do you get this? Quite likely you will get it from a vendor that you find via ASI. Their business model can be described as "anything that moves between buyer and seller, we want a piece of that." In their case the piece is a part of very small pie. What Google wants to do on a giant global scale for everything, ASI does in their tiny market. They have a great business.

5. TechTarget. This is a B2B Media pure play. In 2002, in the depths of the technology nuclear winter, they raised $100 million to build a B2B Media firm focused on the technology market! They were good enough at this to go public in 2007. The shine may have come off them since then but they were for many years the envy of their peers. Their simple focus was lead generation. That of course is what Google does with Pay Per Click. TechTarget's innovation, in simple terms, was to deliver "the who with the click”. That is a big step forward but maybe a self-limiting market. As readers understand what is being done with their data they may become more resistant to registering as a "lead."

6. Jigsaw. Jigsaw is using a Wikipedia type model to create the biggest database of basic B2B contact data. This is disrupting the older models of contact databases that were labor intensive/expensive to create.

7. LinkedIn. This is another approach to the lead generation/contact market that is doing very well in the recruitment business.

8. HarteHanks. Jigsaw will sell you basic contact information. LinkedIn will give you detailed profiles but you don’t see the contact information unless you already know that person or know somebody who can make the intro; you have to pay LinkedIn to reach all the others. Both have a user generated content model. HarteHanks uses labor intensive market research to get data about the prospect that will really help you to build an outbound marketing campaign. Basically they tell you what equipment they have installed today, which is invaluable if you want to qualify your chances of selling them something new.

9. DemandMedia. All the above success stories are database stories with a fundamental business model based on connecting buyers and sellers. The connect might be a click (Google), a lead (TechTarget), a contact record (Jigsaw), an introduction (LinkedIn), a qualified lead (HarteHanks), or a transaction (Alibaba, ASI). DemandMedia is different. DemandMedia's success is based on a new model of content generation that is low cost enough to make money in a low ad rate online world. Love it or hate it, DemandMedia works. It is a scalable model. You cannot ignore it even if it raises your writing/editorial hackles!

10. Wired, Economist, FT. These are three great Print magazines. They also have great online sites and great events, but that is not remarkable. What is remarkable is that their print business makes money. They are not catering to old-fashioned types that peer over their bifocals muttering; "don't want any of that new fangled Internet stuff." In fact the Wired audience could hardly be more geeky and early adopter. Yet I buy two of these mags on the newsstand and subscribe to one. The simple message: great quality journalism will always do well. You just have to be great! Are these B2B Media? Well they have a lot of influential, wealthy business folk who read them, so yes. But those same folk are also consumers. All that means is that these distinctions, between consumer and business, matter less.

11. Apple Daily. Who? This is a newspaper in Taiwan. Yes, a print newspaper. This is not a DemandMedia type story. Nor is this a fancy high-end story like Wired, Economist and FT. Hat tip to Paul Conley who told me about Apple Daily. Here is how Paul introduces them: "The bottom line is that a guy with no newspaper background, but a deep understanding of the retail world, revolutionized how newspapers function in Asia. I've never even seen a mention of them in the English-language. I suspect that the reason for this is simple. There are only a handful of people in the newspaper industry who are interested in thinking about the future. And those people are entirely interested in online." One thing Apple Daily do, is test, test, test. Sure we all do this online. They do it in print. They have different versions of the front page and see what sells and then rush print the one that sells. They also work the local reporting in a way that is compelling to readers.

12. Meetup. This is a quiet success story. You don’t see stories about their mega valuation or future IPO and their CEO keeps his charisma for the events, he does not aim to become a celebrity CEO. MeetUp teaches us (in case the Internet made us forget this) that we are social animals, that we want to get together face to face and that we learn that way and do business that way. So events are a healthy business. But events that cost $10? Events that are self-organized? That may take place in multiple locations at the random times that nobody coordinates? Where 40 people is seen as a big attendance? Yes, this maybe the future of events. One where the travel cost is not an issue. This is the future of "unconferences," where agendas are created by the audience. MeetUp caters to the real reason why people go to conferences, to network with their peers and recognizes the reality of "lobby-con" (people without the budget to attend the conference who hang around in the lobby of the hotel in order to "bump into" people they want to meet). This is not to say that Mega trade show Events like CES will go away. We will still pay big money to attend high prestige conferences where we can network with movers and shakers (think World Economic Forum or TED). More likely we will see a bar bell in the Events business - mega events at one end and MeetUps at the other.

10 Theme Songs From The Future

1. Be Direct. Business models based around performance marketing, that connect buyers and sellers as directly as possible work best. "Faith-based advertising" (as in "50% of my advertising is wasted, I just don't know which 50%") is in long-term decline relative to measurable performance based marketing. But a click is not revenue. Repeat after me all who think Google owns this forever. A click is not revenue. A lead (the "who with the click") is closer down the conversion funnel to revenue. But what a seller really wants is revenue aka transactions. Just ask Alibaba (or, for a more consumer view, just ask Amazon or Paypal, huge businesses that win by enabling transactions).

2. The new 3 leg stool: Ads, Subs & Trans. The old 3 legs (print, events, online) stool is broken. Print is in trouble (outside contrarian Print 2.0 plays) and none of those success stories has Events at the core except MeetUp. The new 3-legged stool is the blend of advertising, subscriptions and transactions ("ads, subs & trans"). Some businesses focus more on one than another, so won’t do one of the three, but a blend is increasingly the play. In some respects this back to the future. The blend of ads and subs was the old model for trade magazines. Then most publishers lost the art of charging for subscriptions and got the freeconomics religion. Or more basically, lost the confidence that their content was good enough to charge for. Now they are desperate for online subscription revenue. Subs are stable and relatively recession resistant. If you add transactions, direct revenue for your customers, you have a great business.

3. Print 2.0 is a lovely contrarian play. When Google advertises, where do they turn? OK, yes they did a Superbowl ad, which was pretty surreal. But they also use billboards. You know, those things along the highway. It does not get much more retro than that. And Google is not the only high tech firm doing this. They know that competing for attention online is tough, particularly with the early adopters who have Ad Block (kills all known ads), who would not dream of clicking on paid search links (organic is better) and rage at any vendor that attempts clumsy social media marketing. That is one reason Wired does well in print. Oh, that and great writing and inspired visual design! Look at how this played out in music. All music is digital and free. So what do the cool music heads want? That’s right, they want vinyl.

4. There is only room for one winner per niche. Whether your niche is as big as global manufacturing (Alibaba) or as tiny as ASI, the network effects online reward the # 1 player disproportionately.

5. Leave Lots Of Money On The Table. To get to scale, when the marginal cost is close to zero, it’s the only smart thing to do. It goes totally against the grain of traditional business folk, but is the inexorable logic of digital economics.

6. The Economics Of Trust. I believe Umair Hacque coined this phrase in relation to a misstep by Google in their Buzz launch. Paul Conley writes about it in a B2B Media context, about how not to cross the fine line between “church and state” (editorial and advertising). Or flogging your audience’s email and phone numbers to direct marketing firms (via List Rental). If you lose trust, your ability to monetize can crash. In print this could take a long time. Online you can go from hero to pariah in the few minutes it takes for an angry blog or tweet to cascade through your market. Keep it clean folks!

7. Those Server Logs Are NOT Wrong, It IS A Global Business. A print magazine in America that goes online starts seeing that they get visitors from all over the world; like 25% of visitors, 50% in some cases. That is a problem, our advertisers only want a US audience. What do we do? Talk about a golden opportunity being viewed as a problem!

8. The Internet Does Not Respect Market Space Boundaries because humans don't. What are you? Are you a consumer, or an enthusiast, or are you in a business? That is right, you are all three at different times. In some cases you will read something with one hat on and another time with a different hat on. Don't put your business in a box based on out-dated definitions.

9. Cost matters. Valuable Information at the right cost is the lesson from most of the above success stories. We will look at this one in more detail in the next post. Linked Data changes everything.

10. Both ends of the content bar bell work great. Wired, Economist and FT have no trouble selling print; the content is so compelling. DemandMedia is a great success story at the other end of the spectrum; their content is just good enough at the right price. Both ends of the bar bell work, it is the stuff in the middle that is problematical. In B2B Media, most content today falls in that troubled middle.

Business Model Mashup

Many of those successes are about total focus on one thing only. For example, Jigsaw only wants the 11 basic records in a contact record. That is very focused. But not limited. They want it for every contact record on the planet.

In a small niche, that single focus may not work. You may have to mashup lots of different models. That is what ASI do in their small niche. Mashup does not have to mean ugly and chaotic. You still need a great user experience. You just need to right blend of ads, subs and trans so that you can make money whenever, wherever and however you make a connect between buyer and seller.

In the third post on the Semantic Wave hits the B2B Media business we indulge in a bit of science fiction. We will assume that technology that is currently developed becomes widespread and then imagine what this will do to the current market landscape.