Updated on 2 Sept. It was once so simple. There was B2C media and there was B2B, especially in print. Then the web helped advertisers connect with their customers instead of just promoting to them.
The process of losing so much of that high-margin, low-accountability, no-response advertising has been painful for publishers, of course. But it now gives B2C media the opportunity to build substantial B2B intelligence services alongside traditional B2C.
Client companies whose relationship with B2C media was once confined to buying advertising are hungrier than ever for the data, relationships – and sales – that these publishers can provide. This melting wall between B2C and B2B creates huge new opportunities for media companies to capitalise (once again) on their brands, content and relationships.
That’s the world of “B/C media” in which Condé Nast launched Vogue Business in 2019, to exploit the power of its 128-year-old magazine brand among B2C and B2B audiences. For the past 18 months, the London-based Vogue Business (“fashion’s global perspective”) has been offering a three-times weekly newsletter which, with its Technology and Sustainability mailings, now has some 340k (non- paying) subscribers.
In addition to punchy news content, the newsletters have provided exclusive data, for example, on price trends in China. The real ambition of the embryonic operation, however, is revealed by the fact that it is planning to employ some 100 people in London, Paris, New York and Shanghai (where it produces a local edition). Currently, it has some 45 people. Now, the wraps are coming off the real strategy.
It has announced a multi-million dollar plan for Vogue Business Data & Insights membership which will give paying customers access to news, information, analysis and also a bespoke advisory service featuring market research and benchmarking. The company explains its three categories of membership and “introductory prices” as follows:
- Unlimited Vogue Business reporting
- Premium Sustainability and Technology Edit newsletter briefing
- Monthly in-person and virtual events with Vogue Business editors
Advanced Membership ($1,260)
- Membership benefits, as well as:
- Bi-Monthly Market Insight Reports
- Access to insights from the Vogue Business Index
- Executive Seminar Series
- The Long View from Vogue Business report and event series
Data and Insights Membership (bespoke pricing, see below)
- Company-wide access to Advanced Membership benefits, as well as:
- Full access to the Vogue Business Index
- Advisory services
- Summits in the US, Europe and Asia, due to commence virtually later this year and in-person in 2021
Vogue Business is clearly competing with the authoritative 13-year-old Business of Fashion, in which the Financial Times is a minority investor. BoF now claims 55,000 subscribers, some 55% up on last year, at an average price of some £300.
By contrast, it is believed that the top tier of the new Vogue Business service will be priced to compare with the brilliant WGSN, the fashion trends and consulting business whose top customers pay some £30-50k, with an average price of £10k. WGSN, which has some 7,000 subscribers, is owned by – B2B information company Ascential.
The emphasis of Vogue Business is on marketing and company performance (including the Vogue Business Index of the top 50 brands). WGSN (which has recently branched out into the food and drink sectors) is primarily focused on product design. But you can see how these two premium-priced services may, ultimately, become fierce competitors. B2C meets B2B.
Condé Nast’s traditional, US-based frenemy Hearst Corp is even more deeply immersed in B/C media. Its Good Housekeeping Institute (GHI) has long been the backbone of the eponymous magazine brand. In the UK, it’s becoming an increasingly important part of the future for a company which once depended on magazine advertising revenue.
In 2013, Hearst created a self-standing GHI testing laboratory and cookery school. It helped to ramp up its testing and accreditation business. This year, Hearst opened a new state-of-the-art, 8,000 square foot testing facility west of London under the brand name Hearst Institute.
Manufacturers pay to put their products through a battery of tests and can then buy a licence enabling them to advertise their products as having been recommended or approved by Good Housekeeping. The process of helping clients to maximise RoI, naturally, often includes working with Hearst print and digital media. Even products that fail the test can be good for business: they can be re-worked (with Hearst help) in order to improve their chances of success with consumers.
The Hearst Institute is becoming a brilliant business that has 100 clients at any one time and claims a 75% renewal rate. While the focus so far has been Good Housekeeping, this is being rapidly broadened to cover the whole range of consumer products.
The Good Housekeeping brand may account for at least £20m (about 15%) of Hearst’s UK revenue. More than 30% of that GH revenue may come from the Good Housekeeping Institute. But it’s really just the start. You might expect Hearst UK to be generating some £15 million of revenue and perhaps £10 million of profit from the Hearst Institute within a few years. And that may not even include the revenue generated by the company’s magazine brands from manufacturers whose product development and marketing may increasingly be dependant on Hearst which has a UK panel of 70,000 readers available for tests and surveys.
The way that Amazon has long stuffed its worldwide sites with persuasive Hearst magazine product reviews almost underlines the way that WGSN owner Ascential (with its own growing data resources on Amazon e-commerce) just might (one day) become a target for Hearst. It would be a surprisingly good fit.
This B/C media activity has long been evident in the merchandising exemplified by Meredith‘s best-in-class revenue from hundreds of products carrying its brands, primarily Better Homes & Gardens. Hearst is starting to become a real player there too. But the realisation that established B2C brands can generate major new business by helping their sometime advertisers to develop products and services for reader-customers creates a whole world of high-yielding possibilities.
We might expect B2C media increasingly to acquire research, ratings and analytics companies. We might even surmise some future synergy between Fitch Ratings (Hearst Corporation’s most profitable subsidiary) and the parent company’s famous magazine brands. Arguably, Bauer’s ownership of price comparison sites in Spain, Finland, Norway, Sweden, Czech Republic, Slovakia and Poland is part of the same trend.
Future, the UK’s largest magazines group, operates the fast-growing TechRadar recommendation and retail site (a bit like Hearst’s Best Products powerhouse in the US). Future has also been acquiring B2B media. It could become a significant WGSN-style forecaster and analyst in technology and other areas where it has distinctive brands and audiences. But so too could the independent publishers of, say, Boat International, Wine Spectator, and Rouleur.
There will be all sorts of new combinations, and even smaller B2C companies should develop B2B information services in their specialist markets. The Hearst-style testing “panel” of readers is an obvious starting point. B/C media is all about “deep down” market specialisation. Some big deals ahead.