Things get ugly at Cygnus

There's some depressing news out of Cygnus Business Media. The B2B publisher is slashing workers' pay by 7.5 percent and cutting hours for hourly workers. Cygnus says senior executives will also have their pay cut. But the company -- seemingly deaf to the public-relations implications of not being transparent -- won't say how much of a cut the big boys will take.
The cost reductions may be related to debt covenants, according to Folio magazine. Cygnus, like many a B2B publisher these days, is controlled by a private equity firm. And as anyone who follows B2B publishing knows, such investors often find themselves owing more than they can pay.
And as we've seen before at Primedia, Ziff Davis and elsewhere -- it's the workers who bear the burden of poorly structured investment deals.

When I launched my consulting business several years ago, Cygnus was one of my first clients. And although I haven't done business with them for a few years now, the company retains a place in my heart. So when I heard the news about the salary cuts, it hit me sort of hard.
The story broke late on Friday as I ended a multiday trip in which I gave two presentations on the future of B2B publishing. And, as I often do, I suggested in both presentations that journalists would need to work harder than ever before to succeed in the fiercely competitive new world of new media.
But as I read the Folio article about Cygnus I was struck by three rather remarkable items that suggest that hard work -- perhaps even extraordinarily hard work -- may not be enough at some companies.

Consider this:
First, it appears Cygnus has seen online ad sales rise year-over-year by more than 50 percent.
Second, the co-CEOs of Cygnus told workers that a decline in print advertising"has accelerated and is significantly larger than we projected during our business reviews, held less than three months ago."
Third, one source expressed dismay that the company's management and owners would be "willing to make the company go through this trauma in order to avoid the modest costs and pain of a bank amendment."
Or in other words:
1. There is evidence that the staff at Cygnus is working harder online than before.
2. Senior management made an error in their projections.
3. The staff is being asked to cover the costs of senior management's mistake -- even though there is another option (reworking the bank agreements.)

I have little doubt that the situation at Cygnus is more complicated than I have portrayed it. Perhaps the debt covenants are unusually tough. Perhaps the creditors are unusually cruel. There are probably dozens of things that I know nothing about that contributed to the decision to cut wages.
Nonetheless, I'm comfortable agreeing with the source in the Folio story who called the salary cuts a "desperate and short-sighted move."
This isn't going to end well.

(Footnote: Speaking of working "harder than ever before to succeed in the fiercely competitive new world of new media," it's worth noting that Folio published its story after the close of business on Friday. But Folio's primary competitors -- BtoB Magazine and min -- still don't have anything on their sites some two days later. )

tags: journalism, b2b, media, trade press, magazines, newsletters, business media

At the Folio:Show next week

Some of the best and brightest folks in the magazine world will be at the Folio:Show next week in New York City.
I'll be there too.

If you're attending, make sure you say hello. I'm co-hosting a session on Wednesday morning titled "Who Should You Hire: Journalists, Market Pros or E-Wizards? Come on by and introduce yourself.

tags: journalism, b2b, media, trade press, magazines, newsletters, business media

Advertising in the near future

If you read the New York Times today, you'll see a number of articles that point to massive changes in the way we in the media will generate revenue in the near future. Each of the articles touches on different subjects. But combined they tell a tale that points to a whole new world.
And, as is often the case, I'm worried that B2B media isn't ready.

The first article reports that social-networking powerhouse MySpace "says that after experimenting with technology over the last six months it can (now) tailor ads to the personal information that its 110 million active users leave on their profile pages."
The second article reports that AOL is relocating its corporate headquarters to New York City and combining its advertising sales into an operation run by Curtis G. Viebranz, the former chief executive of Tacoda. Tacoda, the king of behavioral targeting, was purchased by AOL earlier this year.

So think about this for a minute: two of the largest players on the Web are throwing their weight behind technology that delivers advertising that is targeted to an individual, rather than to a demographic. MySpace will deliver ads based on what a user tells the company about himself. AOL, using behavioral targeting, will deliver ads based on how a user acts online.
In B2B, we have long touted that our products --either on the Web or in print -- can target ads to a specialized and engaged audience. But it would seem to me that our traditional ad recipe -- the same ad to everyone in an industry -- cannot compete against technology that delivers unique ads to each reader.
Consider, for example, the power of delivering an ad about business-finance software to the CFO, while delivering an ad about storage facilities to the folks in the logistics department.
And consider, for a moment, that the new technologies that AOL and MySpace are adopting mean that those specific ads can be delivered to those specific B2B readers in places other than B2B products.
Soon, very soon, that CFO will be seeing business-finance software ads even when he's reading about sports on some mainstream Web site.

There is, of course, also an opportunity here for online B2B publications. Opening up our readership to these targeted ads would prove attractive to marketers. There's no reason why an advertiser wouldn't want to show an individually targeted ad to the reader of a B2B publication. If one of our readers is in the market for a new car, or is obsessed with video games, or is shopping for a new suit, we should be willing to serve him an appropriate ad even on the pages of Avionics Engineer Monthly.

There are two other articles in today's Times that also point toward this new future. I'll link to them here without further comment.
First, Google has announced plans to offer ads tailored for mobile phones.
Second, the Times has announced it is pulling down the pay wall on its Web site.

tags: journalism, b2b, media, trade press, magazines, newsletters, business media, advertising

I'm back online ... sort of

The worst of yesterday's crisis has passed.
I've moved my domain to a new host. Email is up and running again.
I will, however, have to rebuild PaulConley.com.

I have all my files backed up in several places. But I'm trying to decide if I want to use this disaster as an opportunity to redesign the site. I'll made the decision by tomorrow. Either way, I'll have a working site again by the end of the weekend.

In the meantime, thanks again for your patience. And if you've sent me an email anytime in the past few days and haven't received a response, please resend.

Thanks!

Criminals, content and competition

A longtime reader of this blog wrote an email to tell me that in my recent series of posts on content marketers I should have mentioned what he called "the first and maybe the best B2B site published by nonpublishers."
And he's right, I should have.

The site he refers to is Security Focus, the self-described "vendor-neutral site" owned by Symantec Corp., makers of Norton anti-virus software. Security Focus covers the world of hackers, viruses and other security issues -- a world where its parent company is a major player. But Security Focus offers news and information without the obvious bias that many journalists would expect to find in a site run by someone from outside the world of media.

Security Focus' has a rather unusual history in the world of publishing. It was made famous by the work of notorious black-hat hacker Kevin Poulsen, who turned to journalism when he turned away from crime. Symantec acquired Security Focus in 2002 (and Poulsen moved on to Wired in 2005. ) Today Security Focus is a premier, online-only publication that has maintained a reputation for reputable reporting "that is not influenced by Symantec corporate policies or products."

It's worth noting that Security Focus does accept ads -- making it different from the classic content-marketing site. As a result, Security Focus competes with traditional publishers for dollars as well as readers.
So it's worth asking -- what company in your space has the prestige and reputation that, if it opted to become a publisher, your readers and/or advertisers would trust it as a source of bias-free information?

tags: journalism, b2b, media, trade press, magazines, newsletters, business media, content marketing

Eddies and Ozzies

I don't have much time to give the details, so you'll have to follow the link -- but Folio magazine has released the list of nominees for its Eddie and Ozzie awards.

I want to offer my congratulations to all the nominees. Sometimes it is an honor just to be nominated.

I'm also going to take this opportunity to cast my vote in one of my favorite categories -- the Ozzie for best design of a new B2B magazine.
Take a look at McGraw-Hill's Greensource, and see if you agree that it's one of the most gorgeous magazines the B2B world has ever produced.

tags: journalism, b2b, media, trade press, magazines, newsletters, business media, design