Hanley Wood's Journey to a Digital First Media
Frank Anton, the Vice Chairman of Hanley Wood, opened the Digital Innovators' Summit in Berlin today with an insightful presentation on the dynamic and strategic shift he has led to turn the company into a digital first business. For Anton (and many in B2B media), the digital transformation has been difficult. Anton said “It makes me mad to hear people say that print is dead, as we survey our readers in the design and construction markets about their number one source of information, and in every single case, it’s print.”
In addition, print and trade event margins have traditionally ranged between 40 to 60%, whereas digital business margins are not as high, and require capital investment and expertise not found in most B2B media owners. Anton said, ‘If most American media companies were honest they couldn’t tell you what their digital revenues are, but it's safe to say not anywhere in the range of 40-60 percent’. This shift in the industry has also had an effect on media business valuations. Anton shared by way of example that ‘Fifteen years ago Forbes was worth US$1 billion dollars, and though it is held up as a model for moving to digital, it is likely worth no more than US$250 million now. This compared to Hanley Wood which sold in 2005 for US$750 million’
Even so, growth in their clients marketing spend highlights the importance of digital (see below).
Therefore Hanley Wood developed a plan to transition their legacy B2B media company to a digital media business, including several substantial investments, including:
- Two major consulting projects to change how their editorial team were organised (from a monthly cycle to the always on focus for digital, and restructure the commercial and sales team.
- New editorial and sales leadership from digital businesses, as well as new digital talent through-out
- A modernised workspace, from a traditional offices with windows and cubicles for workers, to an open-plan working space.
- A reduced print portfolio, in which the company went from publishing 358 issues in 2007, to 173 in 2014, reducing circulation from 1.6 million to 1 million, and laying off 30% of their workforce in the process.
- The launch of the ‘Radar Desk’ to ensure that content that was similar in focus but of interest across the business could be shared & distributed through-out the brands.
- And major technology investments in CRM (Salesforce), content management systems (Brightspot), and a unified audience datab
Digital now accounts for 30 percent of Hanley Wood's revenue (up from $13.4 million in 2010 to $16.4 million in 2013), and the team goal is to reach 50 percent. At the same time, the business focus has gone from one centered on 37 different brands, to one around specific audiences, with a business focus around branding solutions, lead generation, intelligence and insight, and strategic marketing solutions.
Though the company has obviously made great progresss, Anton does cite examples of where they have on occassion ‘missed the boat’, and digital start-ups like Houzz (photos of houses and décor) and house pricing site Zillow have captured opportunities Hanley Wood should have done. Anton said, ‘The most valuable asset we have is knowledge of the industry, and if we had been able to create a product to leverage either of those opportunities, I wouldn’t be here today. I’d be somewhere much warmer today!’