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Monday, December 01, 2008

Job Losses, Curated Content and a Rough Year for B2B Ahead

A report by analysts Outsell penned by Chuck Richards should scare the hell out of you. Every 1% of print revenue lost, they claim, will lead to 435 job losses. They forecast a drop in print revenue of 4.5% in 2009, leading to further job losses. The migration to online combined with the downturn is an ugly cocktail.

The article points out that print sales people convert poorly to online sales and quotes one source saying that the success rate is just 25%.

They conclude,

"B2B trade publishers need to be positioned to compete with companies like Demand Media that will compete on a much more profitable cost basis. Step 1 is to rationalize staffing to match sources of revenue. Step 2 is to use this time of economic stress to restructure all key processes to not just stay afloat, but to be ready to jet forward when market growth resumes."

Not only do I agree with the sentiment, but the company they mention has an interesting model. It uses a mix of UGC freelance and industry source data to compile web sites. The result, according to Outsell is revenue/employee double that of traditional b2b media companies.

Forrester call the Demand Media model Curated Content and explain how it works here

I am not sure its really b2b, and I am not sure it would work here. It depends on much content being supplied by experts and paid a modest fee. You need a lot of experts to make enough content. And as any journo will tell you, turning an experts copy into something readable is time consuming and expensive. However Demand Media has been around for three years and by all reports is doing well in the States. What it has discovered is that curating third party content is a way of reducing content creation costs perhaps enough to allow an online model to produce sufficient revenue to make a profit.

I have written before that the problem with online is that the ad revenue opportunity is modest. The answer is to solve two problems. The first is is to create a better ad model with more proveable ROI for B2B advertisers. The second is to reduce the cost of content creation. Demand Media are addressing one part of one half of those issues.

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