Wednesday, April 29, 2009

The Nanny Diary

I've been running an ad in recent weeks for a live-in nanny for my toddler. It's a part-time gig in exchange for room, board and a small stipend. And it seemed to me it was a nice job for someone enrolled in college.
I've posted the ad in a number of places ... particularly on college campuses near our home in lower Manhattan.
As the resumes have come in, I've been saddened to see that the most common applicant is someone who is about to graduate with a media degree of one kind of another.
I've been saddened. But I have not been surprised.

Long time coming
A year ago this month I wrote what is the most-read post in the history of this blog -- a lengthy piece in which I said that "much of B2B publishing -- weighed down by the twin albatrosses of junk bonds and rising print costs -- has sunk into a death spiral."
In that piece I told the "editors, salespeople and designers of B2B" it was well past the time for them to "walk away from print."

Since writing that piece, I've found myself listening time and time and time again to B2B executives complain that I've overstated the problems in the industry and/or that by writing about how bad things are, I'm actually making things worse.

So look: I think it's beyond silly to suggest that reporting the news actually causes the news. And it would be beyond presumptuous of me to suggest this blog has sufficient influence to make things worse (or better.)
But regardless, I think we can probably all agree at this point that I did not overstate the case -- things were, as I wrote at that time, "awful and getting worse."

Does anyone doubt still doubt this? Is it not clear that B2B has sunk into nearly as much trouble as the newspaper industry?
If so, please consider the news of just the past few hours:
Penton is going to a four-day workweek and cutting pay.
BNP is cutting salaries by 25 percent.
McGraw-Hill's media unit said its revenue and profit have plunged.

Hate to say I told you so, but ...
Another of the most-read posts in the history of this blog was published on Dec. 11, 2007. In it I wrote that I had a sense that "something is about to go wrong" and that 2008 would be "an awful year for B2B publishing."
I said then that "everywhere I go I meet people with revenue targets that seem delusional." And I said that the "lust of investors, the demands for growth, the need to justify ourselves to the people who control the purse strings are pushing us into a new era of preposterousness."

Nearly a year to the day after that, I published what is now the second-most-read post in the history of this blog: a lengthy piece in which I argued that "the B2B industry as we know it is about to collapse."
In that piece, I wrote that not only had most traditional publishers dug themselves into a hole from which it was unlikely they could emerge, but that the new Web-only publishers were also proving to be a major disappointment. Those "Web-native companies are finding themselves unable to assume the core journalistic functions needed by the B2B world," I said. And I repeated a concern I first wrote about two years ago this month that as the Web was growing more competitive, the Web-only publishers were demonstrating "the exact same attitudes, beliefs, work rules, chains of command and silos that I saw in the print-only companies that failed to respond to the Web."

And so, as Web-advertising revenue shrinks, I'm no more surprised to learn, as I did today, that T3i has shut down editorial operations at TelecomWeb, than I am to see that the Baltimore Sun is laying off editors. (Note: T3i's consulting and research units will continue to operate, according to a senior executive at the company.)

Just as I am not surprised that graduating seniors, just days away from receiving their journalism degrees, would be applying by the dozens for a nanny job.

Reasons to be cheerful
Today I'm making another prediction. And many readers of this blog may be surprised by this one:
In B2B, the worst is over. From today forward, the industry begins to recover.
(Please don't misunderstand. I'm not predicting that debt-laden B2B publishers like Penton will survive. I wouldn't say than any more than I would predict that debt-laden radio companies like Clear Channel can survive or that debt-laden newspaper companies like Tribune can survive.
Nope. Those companies are doomed. They'll cut costs as much as possible. They'll sell brands when possible. But their primary purpose now is to come as close as possible to making the investors and the creditors whole. For companies that borrowed heavily, we've reached the end game.)

Let me tell a little story:
On a single day last week I ran into three different journalists I know. Each had been laid off in recent months. And each was sort of killing time in Manhattan. I ran into one outside a diner where I had breakfast. I met another coming out of the place I had lunch. And I met the third on a subway platform.
Normally, seeing three unemployed journalists on a single day would be sort of depressing.
But on that same day I also met with a guy who is launching a new company (and needed some recommendations for journalists he could hire on a contract basis), had a phone conversation with another guy who has launched an agency aimed at increasing online ad revenue, and I deposited a check from a consulting gig I'd finished the week before in which I helped launch a data-driven news product.
And so, for the first time in a long time, there was a balance between the good and the bad news that I experience first hand.

Since then, I've seen a continuing -- albeit a very small -- shift in which good news outweighs the bad.
I'm still getting emails from recently laid off journalists. But I'm also hearing from slightly more folks who are finding contract work to pay the bills.
I still hear a panic in some voices. But I hear confidence in others.

The good news is coming from the places where I expected it would.
In that same post late last year when I said the B2B industry as we know it is about to collapse, I also said B2B would soon be dominated by five types of companies, "all of which exist today, but as much smaller players in the industry."
If you're out of work or worried that you soon will be, I'd urge you to look to those five areas for your future:
  • Content marketing
  • Data and tech companies
  • Small, privately held, debt-free publishers
  • Price benchmark publishers
  • Entrepreneur networks
The Nanny Indicator
Perhaps I'm being overly optimistic.
Certainly I'm aware that the state of my business and my life are not particularly reliable indicators of the economy or the B2B industry. I've been blessed. I know that. And I am grateful to God, my family and my clients for the support they have offered me. Even as the media industry and the economy have suffered, I have prospered (although my close friends know there were a few very difficult months last year.)
I am aware, in other words, that a guy who is looking to hire a nanny may not be representative of people in the media industry in 2009.
So make of my prediction what you will.
But I believe the worst is over.
I believe the B2B publishing industry as we have known it has already collapsed. It's not coming back. But new B2B publishing models are emerging quickly (and new B2C models will follow soon.)
And, as a result, I believe that should I be looking to hire a nanny again next year, the application pile won't be filled with resumes from student journalists.

tags: , , , , , , , journalism education, content marketing, brand journalism

Monday, April 27, 2009

Penton goes to four-day workweek to cut costs

Penton is moving to a four-day workweek through the summer in an effort to cut costs.

According to a memo sent to employees this afternoon by Penton CEO Sharon Rowlands, the move effectively translates into a 20 percent pay cut. However, the memo also says the company "we will spread the pay reduction in smaller increments throughout the end of the year to reduce the immediate financial stress on you and your families." (Clarification: a comment on this post correctly points out that it's misleading for me to call this a 20 percent cut. If Penton does, in fact, return to a five-day week after the summer, the effective pay cut will be considerably smaller when averaged out across the rest of the year. )
Furthermore, the move to a four-day week "will not impact" benefits, the memo said.

I've pasted a copy of the memo below. I'll be looking forward to coverage from Folio and BtoB magazines in the near future.

Hello Everyone,

I wanted to provide a brief update on how we did in quarter one and share with you some important steps we are taking to further control our expenses going forward.
The first quarter was the toughest in my business career. Not only did many of our properties report results that were significantly below a year ago and well below budget, but while we were reorganizing along the lines of markets, we were forced to eliminate a number of positions across the company. This isn’t uncommon in the world today especially for companies in the media industry and ones that have a heavy debt burden. We squeaked through the first quarter thanks to all of your efforts - but the next couple of quarters aren’t looking easy.
So we have to balance short and long term decisions in times like these. Some of these are really the right decisions for the businesses - like resizing audiences and identifying more efficient ways of doing things. Others may seem counter to what we want to accomplish long-term - like dramatically reducing the sizes of magazines or the amount of content. After all, if our content is so valuable, wouldn’t our readers need MORE of it right now? Sure, but remember that one of our Achilles heels is that we are mostly supported by advertising which has collapsed.
Speaking of advertising, it has not only collapsed in print, but as a company, we haven’t shown the growth we should on the web. Penton is really tracking a long way behind the industry in terms of percent of revenue that is digital, and we are not showing growth. The good news is we have great focus on changing this picture and longer term I am bullish on what we can do here, but it won’t change overnight.

We have some tremendous exhibition franchises that on the whole pulled us through 2008 and contributed a lot of our growth last year. There will be pressure on these businesses as customers are forced to cut back all their marketing spends. Even some of our strongest shows will show negative growth this year.
Despite incredible pressure on our businesses, we achieved a great deal throughout the first few months of the year - we reorganized our business into a market-facing structure; we delivered our audit significantly ahead of prior year; a number of our businesses delivered great financial results given the economy; and in response to my request, Penton employees provided over 150 ideas to help reduce our expense base.

While we are proud of these achievements in quarter one, the stark reality is that our overall revenue picture continues to rapidly decline. This is not a reflection of our efforts but the result of the widespread financial erosion impacting almost every business and importantly the industries we serve. I wish I could wave a magic wand and change the momentum to a positive one quicker, but it’s not possible, and whilst I continue to believe we have tremendous opportunities ahead and we will see this business flourishing in the future, today we still have a tough road ahead for a few quarters.

As you well know, over the past several months, we have attempted to offset our revenue challenges with proactive cost saving measures – as I listed above. These actions, coupled with your contributions in scrutinizing every expense, have lessened the impact. However, with no clear indication that the economy will turn in the short-term and with our revenues continuing to decline, further action is required to ensure Penton remains fundamentally sound.

Please know that the senior management team and I have carefully weighed the need for the measures I am about to announce. We consider our employees our company’s greatest asset. We are committed to doing everything possible to keep our company on track and to provide you with stable and rewarding employment. With that said, in light of the current circumstances, I have made the very difficult decision to implement temporary measures that will impact each employee’s pay.

We are instituting a reduced work schedule during the summer months. From the week before Memorial Day through the week before Labor Day, the Company will reduce its operations from a 5-day work week to a 4-day work week. For many of our businesses this will involve closing our offices on Friday. Other businesses may need to take the reduction in blocks of days. The end result will be the same for every employee at every level however - it will equate to a four day work week and a corresponding reduction in pay to reflect this reduced work schedule.

Whilst the reduction in work week will be contained only to the summer months outlined above, we will spread the pay reduction in smaller increments throughout the end of the year to reduce the immediate financial stress on you and your families. Special rules may apply to employees in California and to non-exempt employees, and we will be reaching out to these employees and their managers with information and specific instructions.
This revised work schedule will not impact your benefits. In some states, you may be eligible for unemployment for the unpaid leave. If you are interested, please contact your local unemployment office. We have prepared a set of Frequently Asked Questions<> regarding this revised work schedule, which you can find posted on the Pulse. In the next few days, your local leadership will organize group meetings, and there will be follow-up communications from your HR reps giving you more detail.

I understand this is difficult news. Thank you for your understanding and continued dedication. I am confident that if we continue to keep our focus on our customers and commit fully to delivering solutions that drive results, we will not only overcome these short term challenges, we will be better positioned to achieve new levels of success in the years to come. I urge you to try and find some upside in this temporary change and use the extra time for yourself, your family, and your friends – time can be a gift. I don’t say this to belittle the financial impact – I know that this is a big deal. I also want to reinforce that I am determined we will come out of this recession strongly and will go on to do great things. We have some tremendous initiatives across the company that this note isn’t the right vehicle to discuss and plan to share my thoughts with you through a video communication that you will see in the next 10 days. If you have any questions, please do not hesitate to contact your manager, any member of our Human Resources Team, or me directly. And thank you again.