David Levin, CEO of United Business Media, is a featured speaker at our “Future of Business Media” conference in NYC next week. The London-headquartered company is the owner of CMP, PR Newswire and other B2B brands. I spoke to him last week on changes at CMP, the future of online and events business, downturn if it comes, the M&A market, and other issues. Excerpts below: More after the jump…
Changes at CMP, with layoffs and shutting of some print magazines: Three years ago CMP was a 75 percent print magazine business. Over the lat two year we’ve spent over $200 million in “transformative acquisitions” so that now the largest part of that business is face-to-face media [events]. This was all part of re-balancing the company, and as part of that we did acquisitions. We did one most recently called Semiconductor Insights, which is a research and intelligence firm up in Canada. So print is challenged, but we have also launched some new print titles this year in tech space in India, amongst other places. That’s the context to see it in. With all the acquisitions, and the print legacy in U.S., we had to address the situation.
Magazines: I don’t see magazine dying. Magazine as a vehicle for on-time delivery of news is clearly dead, but magazine as an environment to offer considered and reasoned opinion clearly has space.
Events: We are seeing a consistent and dramatic growth in the number of attendees, and the value placed on the face-to-face meetings. We are trying to figure out how face-to-face works with online. We are looking at bringing conferences into virtual environments as well.
Online: What is online? it means many different things to different people? Is it lead generation? or is it more than that? How sustainable a model is lead generation? Clearly, led gen is the heart of any sales endeavor. But it doesn’t address marketing needs and it is not very good at branding. A balanced portfolio requires that you offer marketers solutions which bring people into the top of the funnel, when they are not about to be a customer, but need some positioning work. Lead gen is not good at bringing into the purchase process, but it is exceptional at dragging people through the purchase process.
Downturn and its effects on live events: Live events is not immune to the business cycle more than anything else. In our exhibitions, we typically have 70% to 90% pre booking, that is people who are buying their stands up to a year ahead. So one does moderate the force of a downturn, simply because you are carrying the inventory of advanced booking, much more so than any other media form.
Types of acquisitions: We just bought a design studio called How Machines Work, which is doing immersive online experiences. The idea is that if you want to get someone to experience one of your client’s environments, say a software company trying to offer users to download a code and experience working with it. Rather than an old generation advert which you ignore, this is an experiential environment. It could range from games to education.
PR Newswire and its future: We love it. Every two weeks I read somewhere that it is up for sale. The reality is, I am a rational chief executive. Any part of the company, if someone wants to bid for it, they bid for it. Till date, PR Newswire is growing: its profits are growing, we are investing it this year; we have acquired business for it in U.S., Mexico, and there are other acquisitions in the pipeline.
Multiples in the market: There is a very clear break point, before the credit crunch and now after. We have a very consistent acquisition criteria. We are not vanity acquirers, we are economic acquirers. You have to beat your cost of capital, which I think is a logical threshold to have. Typically we were being crowded out by private equity with a low cost of capital. That market seems to have changed now.
So the M&A market is opening up again…it will take a while. People will need to re-base pricing, and of course we have to see if there is any economic downturn of any sorts.
Our core skill: how do you optimize B2B vertical markets. That is all we do.