We are painfully familiar with the realisation that the advertising boom of the late 20th century corrupted many newspaper and magazine business models because so much publishing profit came to depend more on printing copies (and increasing advertiser rate bases) than captivating readers – until digital media took away most of the advertising.
There are many exceptions, of course, but it has arguably taken almost two decades for some of the best traditional news and lifestyle brands to return to viability – and a dependency mainly on readership revenue. In the third decade of the web, many of the best consumer media brands are showing also how successful digital strategies can help to maximise print profits. The UK’s Daily Mail and the New York Times (and many smaller brands too) demonstrate that it’s all about fixing the business model; without that, even the most powerful brands are not viable. Of course.
The web effect on B2B publishing became clear much more slowly. The initial impact was mitigated by the fact that businesses were more quickly – and universally – online, and did not initially require the pricey blandishments of video and social media. But there was, of course, eventually, just as much damage as in B2C; profits have been shredded. The brilliant Industry Dive, in the US, speaks volumes as a highly successful new-wave publisher. But its financial scale, even now, is a mere fraction of what print magazines in these B2B verticals once generated when advertising revenues alone caused a decades-long explosion in ‘controlled circulation’ free publishing.
In the UK, the changes have been more dramatic because the national market, especially for classified recruitment ads, had created huge pre-digital profits for weekly B2B magazines. Twenty five years ago, some 25 weekly magazines accounted for more than 100% of the profits of over 2,000 B2B magazines. Many were paid-for magazines but – in hot sectors like computing – there were even higher profits for large-scale controlled circulation winners. Among the long-established paid-for weeklies, the most profitable – for decades – included some B2B veterans: Estates Gazette (launched in 1858), Nursing Times (1905), and Building (1843), each making at least £10m of profit by the end of the 20th century. You can guess much of what happened next.
Alone among that triumvirate of legendary B2B brands, Estates Gazette is still a major profitmaker in 2022. Having launched a pioneering online service back in 1996, it is a case study in the transformation of a historic B2B brand. It’s no accident that the magazine flagship of this unrivalled property information portfolio is the only print product still produced by the RELX division that was once the world’s largest publisher of B2B magazines. It perfectly illustrates the potential versatility of an established B2B brand – and of the continuing value of print, as part of the package, long after its earnings have been eclipsed by digital.
By contrast, Nursing Times – once a powerhouse of healthcare jobs advertising – suffered through the digitalisation of classifieds by the National Health Service which had itself been the primary advertiser.
Then there’s the 179-year-old Building magazine which had been launched by the man who designed (and gave his name to) the original taxi, the horse-drawn Hansom cab.
The magazine, once the flagship – and predominant profitmaker – of the UK’s Builder Group, acquired by the former United Business Media (UBM) for £79m in 2003. The former newspaper publisher invested heavily in the sector and, eight years later, acquired the Ecobuild exhibition for some £50m only to sell it on for a nominal price. By the end of 2017 – with UBM switching to a pureplay events business and then succumbing to a £4bn bid from Informa – Building (together with the all-digital Building Design, and Venue Finder) was sold to an MBO team led by former UBM editor and publisher Tom Broughton. The price was an estimated £3m, with UBM/Informa providing vendor finance. It launched Housing Today in 2019.
Building is now a 10k-circulation monthly print magazine accounting for 75% of Broughton’s Assemble Media Group revenue. Some 50% of all revenue still comes from print. Assemble employs 25 people (including 10 journalists) and subscriptions revenue (accounting for 30% of the total) is generated from the 100k professionals who have online access. Events and content marketing/ advertising/ sponsorship each account for about 35% of revenue. The company, naturally, bears some scars of pandemic – not least on Venue Finder, a digital guide for event planners:
| £m | 2022 | 2021 | 2020 | 2019 |
| Revenue | 3.0 | 2.7 | 2.8 | 3.4 |
| EBITA | 0.7 | 1.0 | 1.0 | 1.2 |
It’s a long way, of course, from the recruitment-fuelled days when Building’s profit was 10 times greater. It all comes back to the business model. Building (like, for example, its Metropolis-owned competitor Construction News) still provides a good industry news service. But many readers remember when – as a must-read weekly – it contained a 24-page section of planning information and data. That kind of data is now provided by gilded consulting specialists like Groundsure (£11.6m profit) and DMGT’s Landmark Information Group (£26.1m).Overall profits in major B2B verticals have not necessarily shrunk, but they have shifted away from publishers which should now be fighting to reclaim them.
Assemble is a lively operation that is managing to squeeze profits from a constrained business and has been innovative in online learning and events. But the modest growth prospects are a reminder how major B2B magazines in the UK – especially those legendary paid-for weeklies – were once the providers of a substantial amount of exclusive data. In many sectors, you could almost track the shrinkage of such coverage as the advertising boom came to dominate the pages and profits.
In that sense, many B2B magazine and digital brands were hollowed out – and now (mostly) depend on news. There’s nothing wrong with that except for the simple fact that readers increasingly will pay only for information they cannot get anywhere else – and that will rarely be news content. It’s all about information ownership. B2B media owners need to own more than just their brands, and they can’t own the news.
In most B2B sectors, there is a still-growing class of statistical provider, companies generating high-value data for subscribers in ways that makes the point – again – that it’s all about the business model. But Industry Dive (and, in B2C, MailOnline) show that news delivered free to users can become highly profitable for new-style operations. That is still one way to generate real profits. However, the history of data services developed by journalists ( for Argus Media, Estates Gazette et al) underlines the potential of long-established B2B media brands like Building to build powerful information services – and find long-term, high-quality growth.
As Tom Broughton (a savvy former editor who understands must-have data more than most) prepares to celebrate his fifth year as an independent B2B publisher and the 180th anniversary of Building in 2023, he is working hard to capitalise on the revival of events. But a multiplication of value may depend on investing in the development of data – high-value information about prices, costs and activity levels that subscribers will pay for. That’s a way to grow profits – and an enterprise value that could be closer to 10 x EBITDA than, perhaps, the 4-5 x currently.
Broughton might just start the long road back to the B2B future by forming a consolidating joint venture, say, with the privately-owned, 28-year-old Metropolis International. The UK company publishes – among much else – New Civil Engineer, Architects Journal, Property Week, Architectural Review as well as Construction News. The brands were acquired in more buoyant times from Ascential and UBM. A combination with Assemble could produce an industry-wide portfolio of print, free digital, and events – with great scope for paid-for information services and global growth. Get back to the future.
