Where’s the Money in Publishing?

Publisher Hanley Wood (www.HanleyWood.com) has been producing magazines for the residential and commercial construction industries for 30 years, including popular titles Builder, Custom Home, and Remodeling. In addition to its print division, Hanley Wood also has marketing, market intelligence, exhibition and e-media divisions. CEO Frank Anton had a background in print publishing when he came to Hanley Wood 25 years ago, and he spoke with contributor John Gartner about the importance of electronic media, where Hanley Wood derives most of its online revenue, how to capture an online audience and the future of the company’s conferences.What was the biggest challenge you faced in creating a successful online publishing division? Frank Anton: We learned that it is a lot harder than you might think. Back in 2000, when many people had great expectations for online commerce, we invested $40 million in the e-media businesses during a 12-month period in 2000 and 2001, and got almost no return. We learned the hard way that you don’t want to put all of your eggs in one basket. We realized that e-media is a real and an important part of our business, but we do not think it will submerge other forms of media. There are still aspects about print that people will prefer. How has the e-media group contributed to the success of Hanley Wood, and what areas of the business are growing? Anton: We started publishing content from our magazines online about 10 years ago and now have Web sites for all of our magazines. The e-media division has been growing at between 15 percent and 20 percent per year, and now represents approximately 10 percent of our revenue and 7 percent of earnings. In partnership with IAC/InterActiveCorp., we recently created a job board to connect plumbers and electricians with building contractors, and we expect our contractor referral business to grow to a million-dollar-per-year business this year. How does the audience demographic differ between your print and online readership, and how do you address any differences?Anton: Our print subscribers are almost exclusively building professionals, but our online readership is between 30 percent and 40 percent consumers. We do not create editorial content for the Web site aimed at consumers, but we do offer consumer-oriented services. For example, our EPlans.com site offers detailed blueprints of houses, and 90 percent of the orders come from consumers. Currently 60 percent of our online revenue comes from EPlans.com. Do you think there is demand for multimedia content from your readership, and if so, what would be the business model? Anton: Absolutely. We are in the process of putting together a library of 25 training and education videos aimed at professional contractors. The videos provide expertise on subjects such as how to design a bathroom, and will include information about the best materials to use as well as latest techniques. We are considering both sponsorships, where we would charge a building supplier and promise that a certain number of people would see the video, and a subscription program where builders would then be entitled to view a certain number of videos. We are also considering recording and selling some of our business seminars on topics such as how to do online lead generation and how to perform an estimate. What strategy are you using to increase traffic to your Web sites? Anton: Our advertising strategy has four parts. First, we run ads in our magazines promoting our Web sites, and we place tags at the end of the articles to direct people online for more information. We use search engine optimization to make sure that our Web sites are placed among the top pages of results (on Google and Yahoo searches). We also spend more than $1 million per year on paid search listings. This has worked, as our Web site traffic has continued to grow apace with our advertising. How has Hanley Wood adapted its conference strategy in an era when people are increasingly going online to track trends and see products? Anton: Trade shows are still important. People will go online to look at products, but it doesn’t mean they will stop going to trade shows to see things and meet with suppliers. We now plan our conferences around the important industry trade shows that draw the most important suppliers. Because most of our readers are not leaders when it comes to electronic media, we have expanded the topics we cover at conferences to include trends in electronic media. We explain how to use electronic media to help grow their business, including how to use search engine optimization to increase traffic to Web sites. This has resulted in custom publishing and consulting opportunities where we help builders create and polish their Web sites. Did you build the e-media division from within the print group, or as a separate division, and what are the advantages? Anton: Our online division is separate from print and has its own senior management and production departments, but I’m not sure that that is an advantage. When we started the online business, no one that we had on staff had the expertise to build the Web site. Our Web site design and production is all done by people with skill sets that are not shared by the print staff. We had someone from print sales initially try to sell the online advertising, but that didn’t work out, so we hired an independent online sales force. I expect that over time as we hire workers with both print and online skills that we could integrate the departments, and we are considering integrating the sales force within the next 12 to 24 months. John Gartner is a Portland, Ore.-based freelance writer and consultant. He is a regular contributor to Wired News and Technology Review. He can be reached at JohnGartner@Comcast.net.

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Where’s the Money in Publishing?

John Gartner

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