ACBJ CEO talks about the business of business news
TALKING BIZ NEWS EXCLUSIVE
American City Business Journals CEO Whitney Shaw became the head of the parent company of 40 weekly business newspapers across the country earlier this year after the unexpected death of his father, Ray Shaw.
Shaw was previously a senior vice president of the company and president of its sports publishing division.
He’s now overseeing one of the largest employers of business journalists in the country at a time when the industry is retrenching. Many daily newspapers have cut their standalone business sections, and ACBJ’s weekly newspapers have hired away staff members from those dailies, particularly high-profile business journalists in Seattle and Atlanta.
Shaw talked via e-mail with Talking Biz News about the state of the privately held company, part of the Newhouse media empire, and business journalism. What follows is an edited transcript of that conversation.
Given the overall state of the journalism business these days, how is ACBJ faring?
Maybe the best way to describe this year is to say that if daily newspapers have pneumonia (or worse), ACBJ has a cold. We havenâ€™t escaped unscathed, but weâ€™re still fundamentally very healthy. Weâ€™ve always kept staffing lean, weâ€™ve never owned printing presses, we have no debt, weâ€™ve never borrowed to finance an acquisition, we donâ€™t have expensive retiree pensions — these things separate us from companies in all industries that seem to be dominating the headlines with day after day of discouraging news.
That said, thereâ€™s no question that this is the most challenging economic environment in the lifetime of virtually every corporate executive in America — it makes previous recessions and the dot com bust look minor league. This has been painful and, frankly, Iâ€™m not sure the recovery has started nationally. I think the first quarter of 2010 will continue to be soft.
Since ACBJ is a private company, we donâ€™t release financial information. I can say that while advertising revenue is off from a year ago, itâ€™s nowhere near the decline that the publicly owned daily newspapers have reported and continue to report. And our paid circulation will once again grow in 2009, as it has for several years. Few, if any, other publishers can say that.
Because weâ€™re so tied to the small and medium-sized business market, weâ€™re often the first into a recession and the first out. Weâ€™re obviously hoping that continues. Looking back, we can see where things started to slow in late 2007. That would put the start of this recession much earlier than many originally thought, though Iâ€™ve recently seen some reports pointing out something similar.
In the markets where ACBJ is going well, what are the reasons?
With 40 business journals, there are probably 40-plus reasons one does better than another. Some of our business journals are doing significantly better than their counterparts, but thereâ€™s not a single overarching reason I can point to. It could be the strength of the publisher and his or her ad director. It could be the depth of the relationship with clients.
It could be a function of what categories of advertising are strongest in a specific market -â€“ a market that relied heavily on commercial real estate advertising has been affected more than one with a diverse roster of advertisers. Sometimes, itâ€™s just a question of how nimble our ad staffs can be; if they got a heavy dose of advertising from big banks in years past, have they been able to show local banks how to grab market share in this environment?
Weâ€™ve never sold advertising based on cost-per-thousand. Weâ€™ve preached the value of who we reach, not how many. Thatâ€™s been the same year after year after year. As a result, weâ€™ve long told advertisers that business journals are an efficient and targeted medium. That argument resonates even louder when dollars are tight.
Geographic diversity has also been a significant benefit for us. Itâ€™s probably even more important now â€“- although no area of the country has missed this recession, some places have been hit harder than others. For every market where there tends to be a bigger spread between the great years and the slower years, we have markets like Louisville, Columbus and Milwaukee that turn in 5 percent, 6 percent growth year after year. It helps to have a mix of high-flyers and steady performers.
Are you seeing a trend where the better performing ACBJ markets are where the daily papers have downsized their business news coverage?
I donâ€™t think weâ€™ve ever looked to see if thereâ€™s a correlation. My guess would be that in cities where the daily has pulled back on its business coverage, the initial benefit we would get is added online and digital traffic. Once that online visitor becomes familiar with us, we have a better chance of getting someone to subscribe to the business journal.
Frankly, it seems odd â€“- even counter-intuitive -â€“ for dailies to be cutting coverage of business and economic news right now. This is the time that people need accurate and reliable business coverage more than ever â€“- itâ€™s not something that should be left to â€œcitizen journalists.â€ The need for accurate, in-depth business coverage benefits us significantly.
With the recent release of daily newspaper circulation statements by the Audit Bureau of Circulation, we had an opportunity to look at our numbers versus theirs. In the markets in which we have a business journal and there is also a dominant daily, those dailies saw circulation drop 13.2 percent in the 12 months from June 2008 to June 2009. In the same period, our business journal circulation dropped 0.67 percent. That spread of almost 14 points is the largest weâ€™ve ever seen. We still expect our circulation to grow about 3 percent for calendar 2009.
How have some of your non-print products held up, such as event that the papers hold in their markets?
Events are still a significant business for us, and one that has held up very nicely. In a lot of ways, events are the original social medium â€“- we put people together face-to-face with their peers. Attendance continues on pace with previous years, and weâ€™re seeing more interest, I think, from sponsors who are looking to connect in a hands-on way with potential clients and customers. And frankly, a number of our markets are getting smarter about the ways they sell sponsorships. In previous years, if an event had two or three sponsors, we might have added another this year. The dollars tied to sponsorships are holding up well.
Not surprisingly, weâ€™re seeing more attendees use our events to find new employment opportunities. To facilitate that and to get people talking, in some markets weâ€™ve taken an idea from college fraternities and started holding â€œmixersâ€ â€“- an informal opportunity for people to meet and talk. And yes, we sell sponsorships to the mixers.
Weâ€™ve also put additional emphasis at the local level on teaching our subscribers how to get more out of the business journals. These Smart Reader seminars are a huge hit. Theyâ€™re typically held in our offices, they involve our editors, the publisher and our circulation director and the sole focus is on showing people how they can get more from their investment in the business journal.
What has the company experienced in terms of journalist turnover in the past year?
ACBJ still employs more than 600 journalists nationwide. Editorial employment is down about 10 percent from where it was in December 2007. Iâ€™d guess about half of that 10 percent is because of staff reductions we initiated and half is people who left us and we havenâ€™t filled the position yet.
When I first got involved in business journals 20 years ago, one of the biggest challenges we had was keeping our reporters and editors from being wooed away by daily newspapers. There were times we lost good people because they just wanted to work for a daily newspaper, but there were a lot of instances when people left because the daily was offering significantly more money. Well, I can promise you that neither has happened in a long time.
Itâ€™s a turbulent market for journalists right now, but it will stabilize and opportunities will return. That said, I think itâ€™s critical for journalists to be platform-agnostic. We have to give people information in print, online, on an e-reader, in a podcast, whatever â€“- the reader has to choose the platform.
There are a lot of times when the media is its worst enemy. I think this is especially true of daily newspapers. The big headlines â€“- especially the negative ones â€“- far exceed the level of interest the general public has in the media. Time after time, dailies seem to run a â€œPearl Harborâ€ headline because 20 people were laid off at this newspaper or that magazine. The fact that Google, Microsoft, Yahoo and similar companies have laid off people this year doesnâ€™t get the same treatment and is generally characterized as right-sizing rather than a death knell.
Your company took over Portfolio.com earlier this year. How is that faring?
To be honest, itâ€™s too early to tell. Weâ€™re still a few weeks from re-launching the site with all of the features we plan to add. What weâ€™ve done to this point is really more or less a placeholder â€“- Portfolio.com built a strong base of support in a short amount of time. Rather than going dark and letting people get out of the habit of visiting the site, we decided to keep it going and re-launch when we were ready.
Weâ€™re bullish on Portfolio. Itâ€™s an important move for us because it gives us a national brand, a national presence that fits nicely with our local roots.
Whatâ€™s it like not to have your dad around every day to talk about the business?
I doubt the answer will surprise anyone. We miss him on many different levels. Itâ€™s sad and itâ€™s difficult, but we all push ahead. Itâ€™s certainly drawn my brother, Kirk, and I closer together because where there once were three of us there are now two. We lean on each other, and we lean on our colleagues, many of whom have been with us since the day we walked in the door at ACBJ for the first time. The most important thing that Kirk and I can do is lead with the same passion and commitment that our dad did.
I learned long ago â€“- and became comfortable long ago â€“- with the fact that I donâ€™t have to fill my dadâ€™s shoes to be successful, even in the same business in which he made his mark. But, itâ€™s still tough without him.
I was reading an interview with Urban Meyer, the University of Florida football coach, in which he talked about the death of his mother. He said when you lose someone youâ€™re close to, itâ€™s like a storm coming through. In time, that storm passes off into the distance, but itâ€™s always there on the horizon and you never really know when itâ€™s going to touch you again. I think thatâ€™s pretty apropos. Iâ€™m grateful that my dad took early retirement from Dow Jones when he turned 55 because that opened the door to what I can safely say were the 20 most energizing and happiest years of his life.
I didnâ€™t think it was possible, but I hold him in greater awe professionally today than I did before he died. The fact that he could do what he did physically and mentally at 75 is inspiring. Part of the sadness is thinking that when he went home at 6 p.m. or so on Friday, July 17, he never got to come back to the office on Monday morning to continue what he loved doing.
When do you think your papers will get back to the performance level of 2007 and 2008?
Weâ€™re really looking at it more from the standpoint of when do we get back to 2007 levels than 2008 because thatâ€™s when we think things started to turn down. How fast we get back depends a lot on whether the economy has reached bottom. Weâ€™re thinking it has, weâ€™re hoping it has, but I donâ€™t know if anyone can say with absolute certainty that the worst is over.
When the economy slipped the last time it took us four years â€“- from 2000 to 2004 â€“- to return to previous levels of revenue and profit. Iâ€™m hoping we can match that, but a lot of things will have to fall just right for that to come true.
As I look to 2010 and beyond, I doubt print ad revenue will ever come back dollar for dollar. Thatâ€™s why we need to be ready with event sponsorships, with online opportunities, with new ways to advertise in print, with mobile, with databases that we can sell, with things frankly that we arenâ€™t even thinking about right now. Though print may not recover 100 percent of its high-water revenue, I do think ACBJ is better positioned than anyone to capture the B2B dollars that move from print to online and elsewhere. Thereâ€™s no question in my mind that weâ€™ll return to previous levels of revenue and profit; the only question is how quickly.
What are the biggest issues for ACBJ and its business journalism going forward?
The thing that most often keeps me awake at night is the need to stay in front of whatâ€™s happening in our industry, when change seems to come at the speed of light. Example: as media companies continue to invest in the web, itâ€™s becoming more and more apparent that mobile is getting ready to explode at a level that will exceed anything weâ€™ve seen online so far. As a result, the critical question is what are we doing in the mobile arena and what should we be doing with mobile?
This goes back to something I said earlier â€“ we have to be platform agnostic. If subscriber A wants his news in print and subscriber B wants to read it online, we need to be ready to serve not only both of them but also subscriber C who wants a digital subscription to the Atlanta Business Chronicle even though he lives in Dallas. Ultimately, we need to be touching our audience as many times and in as many different ways as possible.
All of this, of course, takes money at a time when dollars are tighter and investment spending requires more commitment than ever. Fortunately, I think the journalists who work for ACBJ realize itâ€™s a new day and theyâ€™re ready to pour even more effort into what they do. As a result, weâ€™re continuing to invest in new projects, continuing to upgrade our products, and continuing to invest in our people.
If you agree that younger people tend to be the first to adopt new technology and the first to â€œseeâ€ new web sites and the first to grasp new mobile apps, we have to turn the traditional corporate structure upside down. Whether itâ€™s ACBJ or any other media company, we need to be open to listening to what that bright 25-year-old woman is listening to and we need to touch what that 30-year-old man is touching. Iâ€™m not saying we turn our backs on our traditional audience, but I am saying we need to be reaching out to our next audience with content that resonates in their lives.