The Global Business Media Forum: Scaling up a challenge for Indian B2B publishers

The second and the last day of the Global Business Media Forum, organised by The Cross Border Media Inc in New Delhi on February 26, debated the potential and opportunities available in the sphere of custom publishing.

The first session of the day focused on corporate media. The moderator of the session, Michael Hoflich, managing director, Forum, highlighted that Germany was home to 15,000 corporate magazines or what is known as custom publishing in countries such as the US and the UK. Corporate publishing in Germany has already taken over consumer magazines. The segment even defies economic crisis as one fifth of the marketing directors (Germany) expect a rise in the relevance of corporate publishing as compared to other communication activities.

The second speaker on the subject was Prakash Johari, chief executive officer, Maxposure Media Group. Johari said that currently, the corporate media market is underdeveloped and has space for many more publishers as well as titles. Besides the most popular segment of in-flight magazines of airlines, other potential sectors include FMCG, automobile, retail, banking and insurance."

Johari added that though the bottom line of a majority of the consumer publishers is red, it is the glamour of the subject and celebrities that attracts them to the business. As far as ad rates for corporate publishing are concerned, ideally, they should be guided by per-page impression but since media planners, too, are not paying adequate attention to the non glamorous business, the corporate titles struggle to command the right price.

The debate on corporate publishing gave way to an interesting discussion on the power of face to face communication and the role of events and exhibitions in reaching out to consumers. Michael Duck, senior vice-president, UBM Asia, which conducts exhibitions across the globe, spoke at length about India as a potential market for events. According to him, by 2020, India will be the third largest contributor to the world GDP (gross domestic product), following the US and China. Cities including Delhi, Mumbai, Hyderabad, Bengaluru and Chennai are the hot spots in terms of infrastructure and other supporting facilities to serve as venues attracting consumers.

He went on to share that auditing of seminar-exhibitions has been implemented in Europe but this practice is yet to take off in Asia. Duck advocated that the event organisers can use statistics for their own marketing and research purposes, thereby promoting more credible data among their clients.

The next speaker was Maneck Davar, proprietor, Splenta Multimedia, who said, "There is no future in plain vanilla publishing. With the news stand sales down and low ad rates, there is a need for publishers to develop products that they can explore in more ways than one. However, one must not lose sight of the fact that exhibition-events are not easy money spinners - there are diminishing returns in this space as well."

From the insightful commentary on the business of events, the gathering moved on to outsourcing in the publishing business. Chandu Nair, president, co-founder and director, Scope-e-Knowledge Center, said that outsourcing in publishing includes tasks such as printing, data base creation, data conversion and typesetting. Now, the KPOs (knowledge processing centres) are also performing processes such as content selection, development, creative design and creation of ads.

Nair added that the efficiency of KPOs results in timely completion of tasks. This, coupled with their ability to scale up and down, make them attractive for outsourcing jobs by publishers. For instance, for one of their clients, Nair's organisation brought down the number of employees on a project for a client from 120 to 20 within six months.

Pradeep Gupta, chairperson, Cybermedia Group spoke on the challenges in the form of cultural/language barriers and streamlining the costs when outsourcing work to a third party. With reference to outsourcing, say in the case of US-India, one needs to invest in cross training of staff from both the countries to overcome, say, colloquial usage of language. In terms of cost advantage on account of outsourcing, the selection of a cost centre (place of production of work) and profit centre (revenue generation processes) also influences the benefits derived from the practice of outsourcing.

Within B2B publishing, as of now, only book publishing has taken heavily to outsourcing. Magazines are yet to take fully to outsourcing.

The last session of the day was a two-way interaction between Vanita Kohli-Khandekar, media consultant and writer, and Pramath Raj Sinha, founder and managing director, 9.9 Mediaworx. They discussed the way ahead for B2B publishing in India.

Kohli-Khandekar drew parallels between mass media and B2B, stating that mass media started building up five to six years ago and has seen players growing three to four times their size. However, when one looks at the B2B segment, even players such as Infomedia and Cybermedia are only Rs 100 crore companies. Given the size of some of the successful Indian business enterprises, the value of the B2B players turns out to be minuscule. She questioned whether scaling up was an issue with B2B publishers?

Sinha of Mediaworx admitted that the B2B sector did not enjoy the scale of financial muscle going into the TV business. Private equity is missing in the sector. He said that the question here was not that of profitability but of how and in what ways an enterprise could scale-up and what it will take for it to become Rs 500 crore or Rs 1000 crore enterprise.

The speakers discussed and concluded that there were only two options available to B2B publishers to grow. First was to build more products in different sectors by replicating the success of the core product. However, this is easier said than done because each business niche calls for a different set of skill sets, business domain and investment to turn into a successful business entity.

The second option or route was that of acquisition - picking up a company that is complementary to the business. This is how a global company such as WPP operates, which added to its kitty Indian, home-grown-first generation businesses including Encompass and Kidstuff.