McGovern

‘The Value Is in the Data’ – John McGovern on the State of Media and Events M&A in 2022

Not even a full month into the new year, it’s safe to say that M&A is back in B2B media. Recent weeks have seen a surge of deals including Endeavor Business Media, the industry’s most aggressive strategic buyer prior to the pandemic, acquiring ISE Magazine and ISE Expo; Crain Communications snapping up The Journal of Precision Medicine and its Precision Medicine Leaders Summit; and Informa buying the Premier Show Group (and don’t forget Thomas capping off 2021 with its whopping $300 million sale to Xometry).

Among the biggest deals of the year so far is the $120 million sale of 10-year-old MJBiz, a media and events company serving the cannabis and delta 8 THC industry, to pure play events giant Emerald Expositions. M&A advisors Grimes, McGovern & Associates represented MJBiz in its sale and we caught up with CEO John McGovern to get his thoughts on this recent surge in M&A, what buyers are looking for and whether events are still an attractive buy as the pandemic continues to drag on.

AMPLIFY: We’re now entering the third year of a pandemic. In the first year, the market embraced virtual events, with mixed results. In the second year, we saw the return of smaller scale live and hybrid events. What’s the current appetite for events as an acquisition? What are potential buyers looking for with events and how has this changed from pre-pandemic?

John McGovern: Just two years before, when I acquired the M&A firm, probably 70 percent of our efforts were focused on pure events businesses. After all the cancellations due to the pandemic, I was  encouraged in the summer of 2020 when we got offers for pure-play events businesses that had a zero P&L for 2020—no events were going to be held and there were no meaningful media or other revenue streams in those particular businesses.

That told me something—these businesses do have value and do still appeal to buyers regardless of whether or not they have the same number of events in the last 12 months as they had in the previous 12 months. In 4Q 2020, transactions came back and we ended up doing the normal number of transactions with media and events businesses.

The current appetite is very good. In the 18 months leading into the pandemic, you had, I’m going to say, between five and 10 new or returning private equity owners come into what is a relatively small industry in B2B events and related properties. There’s capital there, those funds have been raised for these purposes and M&A is a big part of their strategy to grow those businesses and return value back to their investors and management teams.

It remains a healthy market. Most of these transactions happen right after their main event has occurred because the seller wants to keep the profits, so what transfers on closing day is the data. The value is in the data that these businesses have about their audience and their exhibitors and sponsors and the more that they see themselves as data businesses, the better off they will be.

AMPLIFY: Interesting, this marketplace has seen a shift in media companies really becoming events companies with media. Are they now starting to become data companies where the events are just another channel to generate that data?

McGovern: It’s a combination. Going into the post-Covid world, where you have a chance that something like this could happen again, the Holy Grail is a well-integrated media, events and data business. We know there’s data two ways–either a data subscription product with recurring revenue which has higher valuations, maybe even higher than events, which everybody wants to have but those are a bit tougher to start or find.

The other way is your back-end data, your first party data, your internal database and how strong that is. People like [Questex CEO] Paul Miller been talking about this for 15 years. If you’ve got a business where you can tell a potential customer, ‘here’s a set of people, here’s the websites they looked at, here’s the articles they opened, here’s the booth they stopped during an event and here’s the sessions they attended,’ that really has not changed, in terms of being a priority for media and events businesses. If anything, Covid has made it more important to have strong data and to bring in media. We have buyers who are pure-play event companies that previously never wanted to look at a business that had a media component because it’s a lower margin business that requires different types of people and different kinds of systems to sell media than it does to sell booths and registrations.

It was tough to get them to look at a business that had media but now that has changed and it’s viewed as wise to have that 12-month-a-year engagement with the audience in between all the events.

AMPLIFY: So what does someone bringing their company to market this year need to be aware of about dealmaking in this current pandemic environment?

McGovern: For the independently-owned crowd, the ABCs of dealmaking are clean financials, a good, accurate view on the part of the sellers and firms like us on what their profitability is, what’s the owner involvement and what the owners take out of the business—that all plays into the value.

And then depending on the size of the business, can you have a data subscription product for your market that is need-to-have, not nice-to-have, an events business, both virtual and live, and a media business that’s well integrated on the back-end with a unified database. And on the media side they need to be selling campaigns and have that business be lead-based or campaign based, as opposed to space-based.

AMPLIFY: Grimes, McGovern & Associates represented MJBiz in its $120 million sale to Emerald. What were the key selling points?

McGovern: Well, let’s put it this way, some of the many things that a buyer wants to see in a business like that are,

  • good growth.
  • good margins
  • a market in its infancy
  • a good average registration fee to walk in the door, even in an exhibit-driven event
  • a strong management team

I think you can probably make the assumption that the MJBiz folks has some of these attributes and Emerald was smart enough to see them.

 AMPLIFY: You said people are looking for a market that’s in its infancy. That’s cannabis obviously but are there other markets to keep an eye on for the near future?

McGovern: If you back into it from what’s most capitalized on Wall Street, even though we don’t have a lot of public companies in our world –  just a handful of public company buyers – the most capitalized are technology, healthcare and then probably energy. Those are usually the leading markets and it’s about finding new niches in those areas.

On the energy side, it’s definitely the renewable, the sustainability side which even veers into smart cities touching on government and public works type of stuff. With the infrastructure bill, you expect that to be a good area. Then within healthcare, pharma and then technology, there’s just lots and lots of new categories and categories that aren’t new, but just strong and growing.

There are too many niches to mention and there are new ones being born all the time. The event and media industry, we could say, is pretty good at creating new businesses around new topics quickly and early. It’s important in our market that that entrepreneurial energy exists and they succeed in launching.

KC Crain

2021 McAllister Top Management Fellow KC Crain Shows Future Journos How To ‘B2B’ Their Careers

By Yuliya Klochan, a master’s candidate at Medill/Northwestern, specializing in science reporting.

Each year, global business information association AM&P Network awards the McAllister Top Management Fellowship, now in its fourth decade, to an outstanding B2B media executive who promotes the study of business media by sharing their experience with students and faculty at Northwestern’s Medill School of Journalism, Media and Integrated Marketing Communications.

KC Crain

This year’s McAllister Top Manager, KC Crain, president and CEO of Crain Communications, and his team of editors, audience development and HR staff from Chicago, Detroit and New York, visited the Medill School for two days earlier this month, sharing insights throughout a packed schedule.

“The team took four classes of students through what’s involved in transforming a century-old brand into a modern, multiplatform B2B media company, all the while retaining independence and integrity,” says Abe Peck, director of business-to-business communications and professor emeritus in service at Medill.

One of the four classes Peck and Crain’s associates attended was a graduate course on Magazine News Reporting in Medill’s downtown Chicago newsroom. Crain introduced the B2B powerhouse and recapped its 105-year old history: Until 1998, the organization focused on print publishing alone. From then through 2017, it launched and acquired more than 20 brands and started a digital transformation.

Today, Crain Communications is building a bigger portfolio through M&A. The company recently purchased GenomeWeb, a life sciences online news organization, and Green Market Report, a digital media brand covering the cannabis industry.

The big takeaway: Focus on your audience. As class speakers Dan Peres, editor-in-chief and associate publisher at Ad Age, and Ann Dwyer, editor of Crain’s Chicago Business, say, it is the “Northern star” for Crain Communications’ reporters and editors.

In addition to attending four classes and meeting with faculty, Crain associates led a workshop on “Your B2B Career,” which was attended by both journalism and integrated marketing communication Medill students. KC Crain and Nikki Kallek, chief human resources officer at Crain Communications, led the interactive session on the Evanston campus with Zoom and in-person participants. Kallek highlighted the ability of B2B writing to “impact how a business person makes decisions.”

“We’re really excited about working closely with the school,” Crain says. “We think there are natural ties between Medill and Crain Communications. And we were very impressed with the curriculum, the professors and the students. We hope that we can partner in many ways in the future.”

breakingmedia2

Content, Ad Ops and First Party Data – How B2B Publisher Breaking Media Grew 50% During the Pandemic

Editor’s Note: Join Breaking Media CEO John Lerner and TechTarget senior director of search and advertising solutions Adam Davis to discuss new digital revenue ideas and dealing with the demise of cookies at AM&P Network’s Revenue Council meeting on Oct. 21 at 1pm ET. Register here or contact mkinsman@siia.net. 

The pandemic caused a massive reset in B2B media. Publishers that had morphed into events companies first and media second took it on the chin (in more than one case losing upwards of 50 percent of overall revenue).

Meanwhile, the pandemic has been a boon to companies poised to meet the renewed demand for digital media. Case in point—New York City-based Breaking Media, which serves verticals such as legal, defense, fashion, medical and finance. After two flat years of growth in 2018-2019, Breaking Media saw digital revenue soar more than 50 percent over the past year as both new and existing customers shifted spending from events into digital media.

John Lerner

Here we talk with Breaking Media CEO John Lerner on how they did it and how they plan to keep the momentum going as events return and the B2B media industry at large scrambles with a renewed passion for digital media.

 

AMPLIFY: John, Breaking Media is up 50 percent in revenue. Where specifically is the growth coming from?

John Lerner: Before and during the pandemic we invested heavily in our main verticals. Our strongest markets right now are defense, law and healthcare. Defense, in particular, is the biggest driver because that’s where we were doing the most investment before the pandemic. We were building that momentum before COVID and then we were able to address the needs of the market when the pandemic hit.

We are doing a lot of content marketing programs. We added really strong editorial teams. We’re hiring more ads ops people than salespeople these days—sales is still relatively straightforward but what makes a successful campaign on the back-end is getting more complex.

The Breaking Media model is a bit different than other B2B publishers in that we like to identify the total universe of a vertical and then create content that engages as much of that community as possible. From there we segment the audience through content first but then on the back-end we start to develop lists and the first party data so that we can target them.

We took a long look at the market in April and May of 2020 and we saw that things would be coming back. We didn’t do any layoffs. I’ve always believed that you invest in a downturn and you can grab market share in a downturn.

AMPLIFY: What is the current revenue mix for Breaking Media and has that changed over the past year?  

Lerner: Right now, we’re 100 percent digital media although historically live events have accounted for 10 to 15 percent of total revenue. Fifty percent of our current revenue is custom, 20 percent is email, 20 percent is classic brand advertising and the remaining 10 percent is a mix of other thing like job listings and subscriptions. I was just budgeting for 2022 and it’s hard to define because today everything overlaps. Every content marketing program we do usually has a banner ad component to it.

AMPLIFY: How have you accomplished this growth?

Lerner: We got a lot smarter in terms of segmenting the audiences and then developing the products that they want. We’ve focused heavily on first party data for some time now, knowing that the ‘cookiepocalypse’ was coming. But the key was having that audience—you can’t segment audience you don’t have. It was really there for the taking and we’ve hit our stride at this point.

AMPLIFY: Beyond editorial, where have you invested that’s had the biggest impact?

Lerner: It was really building ways to collect first party data. We have a heavy focus on e-mail. The interesting thing about B2B is that your readers and advertisers are mixed together. The more people we get to read our content, the more who will subscribe to our newsletters. The more you know what their news consumption behavior is, the more we can target them.

Our view was we needed to deliver solutions to advertisers who couldn’t go to events. The Farnborough Air Show was canceled in 2020 but the need to reach people in that market was still there. We had a subset of our audience that was purely engaged in that show subscribe to our newsletters, so we can jump in and fill that gap.

AMPLIFY: Can you share a specific example of a product that helped drive this growth?

Lerner: There wasn’t any one million-dollar product. In defense, instead of selling around an event, we started selling around a topic. For example, there’s something called multi-domain, which doesn’t focus on defense in just one environment like land, sea or air but across the board because the technology is merging all together. We had a lot of interest from our marketing partners about multi-domain so we launched it as a special section on the site in lieu of any event that could cover it. In doing so we’ve created a really engaging topic that wasn’t part of the site initially.

Customers want to be thought of as thought leaders in their space. We offer branding around the content, not just banner ads. Banner ads are still a part of it but there’s a special design element and the marketing is integrated into that. From there you give them the opportunity to run their own native content (labeled as such) intermingled with our editorial content.

Big trade shows used to be that way. You had a big launch with a massive splash at a trade show and your brand would be everywhere. That’s the goal of what we’re trying to do with the online experience today.

Amplify: Marketing services have exceeded banner advertising as a revenue generator in B2B media in recent years but also brings with it the internal challenges of managing so many custom elements. How are you addressing that?

Lerner: We create a lot of process around how we execute. We don’t try to templatize the program itself because that is custom. That’s one of the reasons we keep hiring campaign management people. There is a hand-holding process to this now. We’ve always had the market experts, who usually come from the editorial side, and they’re usually the face of the brand talking to the customer’s marketing experts.

But then our campaign management teams comes in to make sure it’s done right. The client can’t give us collateral at 5:00pm on Thursday and have it accepted on Friday. We want to make sure they’re using stuff that will resonate with the audience and everything, down to the links, are working. We’ve laid out a process where there is X amount of back and forth of iterations and you the customer know what our expectations are.

After that, the reporting is just as vital to the success of the campaign, so we make sure we’re going to follow up and give them weekly and monthly reporting on what’s happened.

We assign a campaign manager to the program and they really serve as more of a project manager, because they understand all the metrics that need to be tracked. Someone owns it internally and they’re accountable to it and the goals that we’ve set. Our renewal rate has gone up tremendously because of that.

AMPLIFY: How much of this new business is coming from marketers shifting budgets from events and how many are existing customers versus new customers?

Lerner: It’s both. This is not the death of face-to-face events in any way, shape or form but I do think there’s a bit of headwind in the events space because marketers want to see the ROI and are questioning whether they need to be there. A lot of them are starting to realize that digital has the best ability to show ROI of any media. I would not want to be a trade show-only company right now because digital media is going after that business.

AMPLIFY: What’s this mean for your own events?

Lerner: We feel bullish because our own events have usually been about high-quality programming and a lot of networking. The networking event can’t be replicated online but the sponsorship side can be. In the trade show world, people are going to be saying, ‘Wait a minute how much is this booth? What are my alternatives?’

We sell on tangible metrics. You know how many people look at the campaign or look at an article. A trade show today is sort of like magazines in the old days, where you had circulation but no idea if someone actually read it.

I don’t think you’ll see events come back 100 percent. There will be changes and there will be hybrids which I think are exciting.

AMPLIFY: How do you sustain the momentum going into 2022?

Lerner: To continue to grow, we have to continue to add new products. I’ll use law as an example. There are about 1.2 million lawyers in the U.S. and a couple hundred thousand law students. So, the full universe of lawyers, students and legal support is around 1.5, 1.6 million.

We reach most of them in a given month with Above the Law, because that’s the nature of the site. But very few of our marketing partners want to reach that entire 1.6 million. We recently had a client who wanted to reach family law firms in California with two to 20 employees. We were able to deliver that thanks to our first party data and that’s how we will move into 2022. One of our key missions is to know more about our audience, give our audience the content that they want and then deliver that audience to our advertisers.

We’re also looking at experimenting with other programs that are more direct-response driven. Certain clients want lead gen and we have to create campaigns where we’re competing against LinkedIn and Google. Those are SEO plays more than anything but we’re heavily focused on that. We have a lot of products queued up for next year and they’re all subsets or cross-overs of our existing markets. In every market, the common theme is how far we can drill down and create a product that hits a subset of that audience.

GovExec

Breaking News: GovExec Acquires 1105 Media’s Public Sector 360, Its Fifth Acquisition in Three Months

GovExec (formerly Government Media Group) ended the summer the same way it began the season—with an acquisition.

In its fifth deal since June, GovExec announced it purchased 1105 Media’s Public 360 group, which serves the public sector IT community with media brands (including Washington Technology, FCW, GCN, and Federal Soup), events and demand gen and market solutions services.

With the addition of Public 360, GovExec claims it has the largest sector database with access to nearly 70 percent of federal technology buyers.

Troy K Schneider, the editor in chief for FCW and GCN, will take over the role of general manager of Government Technology Brands for GovExec, working with GovExec group publisher James Hanson.

“Public Sector 360 is a seminal acquisition for us,” said GovExec CEO Tim Hartman. “With Public Sector 360’s actionable intelligence for, and engagement with, government IT leaders, we will be able to deepen our bench strength across our core areas of data that informs, media that connects, and marketing services that activate.”

Seven Acquisitions with a Focus on Data and Business Tools

Since its own acquisition by private equity firm Growth Catalyst Partners and former Hanley Wood CEO Peter Goldstone in March 2020, GovExec has been on an M&A tear, making seven purchases (with five over the summer), including

  • The Atlas for Cities, an online community and market intelligence platform for government leaders
  • City & State New York, a local government media brand
  • Power Almanac, a local government business intelligence data asset
  • Military Periscope, an open-source military data source
  • Government Contracting Institute, a business tool that alerts federal business contractors of new opportunities
  • Government Marketing University, a training, skills development and career growth community platform
  • Public 360

The bulk of GovExec’s acquisitions over the past year have been data or business intelligence tools, a common trend in B2B as publishers look to develop a complete solution (including high margin subscription data and research solutions and tools that make the publisher part of the customer’s workflow) while distancing themselves from the perceived fickleness of digital advertising (which actually saw a renaissance over the last year) or complete dependence on events, the golden goose that finally laid the wrong kind of egg in 2020.

Public 360 is a relatively “traditional” media acquisition for GovExec and illustrates the fact that even as b2b media shifts to a more modernized approach, it can’t lose sight of the roles content and media play in creating a community and then driving members of that community to the next stage of the business.

Bobit

Bobit Rebrand ‘Signals Company’s Focus on the Future of B2B’

This week, Bobit Business Media, which serves verticals such as fleet and transportation and health and beauty, rebranded as “Bobit,” dropping the “Business Media” and adopting a new mantra, “Business Intelligently.”

According to the Bobit release, this is…

“…a new approach to spotlight its belief that business leaders want to make smarter decisions, and that making business intelligence actionable is where it begins. When decisions focused on what products to sell today or what solutions to build tomorrow are needed, Bobit streamlines access to timely data and shortens the path to the right choice. The company’s focus is on significantly investing in customer service, innovating new product offerings and solutions, and focusing on the expansion of its talent and expertise.”

Paras Maniar

With the name change, Bobit—which celebrates its 60th anniversary this year—also completes its shift from family business to a new management team led by CEO Paras Maniar, the former president, local, of Gannett.

“Bobit enables doing business more intelligently,” says Maniar. “Our deep expertise in content, events and data services allows industry professionals to make better decisions – whether that is deciding where to invest for the future or where to target marketing and sales efforts in the near-term. Business Intelligently is the lens through which Bobit measures every decision on products, people and processes.”

New Offerings

Bobit is coming to market with a host of new products including Bobit Connect, which gives users easy subscription control, streamlined access to premier content, device-to-device memory to pick up where they left off, and bookmarking across their full industry portfolio.

The company also offers its Buyer Intent Program, where clients get exclusive access to engagement with readers showing strong intent to buy; a Data Subscription service for its fleet and transportation vertical that includes data cleansing, identification of intent and market insight; and E-learnings, which serves Bobit’s health and beauty vertical.

From B2B Media to Business Intelligence

Bobit joins the trend of publishers dropping the term “media” in favor of “business intelligence” or “information services” to showcase their ability to offer a complete solution (including high margin, recurring revenue subscription data and research solutions that make the publisher part of the customer’s workflow) while distancing themselves from the perceived fickleness of digital advertising (which actually saw a renaissance over the last year) or complete dependence on events, the golden goose that finally laid the wrong kind of egg in 2020.

Examples of this abound, including GovExec (rebranded from Government Executive Media Group earlier this year), which last week announced its acquisition of market intelligence firm GovTribe, its fourth deal in three months, all of which were market data solutions.

Winsight saw its Technomic data business grow to about 30 percent of its overall revenue pre-pandemic and help fuel its media and events businesses, proving that done right, a data product can help lift all boats.

Similar moves among Bobit’s competitors showcase the need for change, such as Randall-Reilly, which pioneered the development of a data business out of a media business and newcomer FreightWaves, which bills itself as the “Bloomberg of freight” and saw 250 percent growth in both its marketing services and subscription data businesses during the pandemic.

In the health and beauty category, events behemoth Questex looks to create a “modern” information services model that leverages audience data to tie content and events closer together to create a year-round customer engagement framework

Don’t Forget What You Are

On paper, Bobit is making all the right moves in modernizing its approach. But even as data becomes the new darling of B2B media, companies need to, as Maniar notes, strike the right balance between content, events and data.

Maintaining that balance could be a fine line to walk as the industry continues to recruit new leaders from outside publishing, including Randall-Reilly, which named new CEO Matt Reilly (no relation to the company’s founders) earlier this year after senior roles at Accenture and data science companies; Winsight, which tapped Kurt Reisenberg, a 25-year-veteran of the business intelligence industry (including CEB and Gartner), to the then newly created position of president; and Hanley Wood|Meyers Research (now Zonda) which is led by Jeff Meyers, who was previously CEO of the research side.

(Ironically, data company Dodge Data and Analytics named media star Dan McCarthy as CEO last year.)

The B2B media and information industry is overdue for a modernized approach but it can’t lose sight of the roles content and media play in creating a community and then driving members of that community to the next stage of the business.

As Alex Ford, who founded digital publisher Praetorian Digital and oversaw its evolution into SaaS-based solutions provider and trainer for the first responder community, said, “The front end of the business is our set of digital media communities. Through them, we’ve created strong brands and channels allowing us to engage with our audience and generate opportunities to work directly with customers to solve the problems they are facing.”