Look, I recognize it’s been a rugged 20 years or so for the publishing industry. Since Craigslist showed up on their doorstep and eviscerated classified advertising, media properties searching for new revenue streams seem to have a certain Ponce de León quality to them. Some would argue that in a world where people expect to read journalism for free, finding the Holy Grail is an easier assignment.
So it makes sense that publications ranging from Business Insider to The New York Times have jumped into the content business. With the value of native advertising on the rise, why not take two bites from the apple and generate dollars not only from media placements, but also from creating the content?
Now we hear that Bloomberg, the same Bloomberg that mints money from financial services and publishes Businessweek, wants a piece of the glamorous business of communications. The Financial Times reported last week on Bloomberg’s offering:
“Services will include brand consulting, corporate communications and marketing strategy advice, among others.”
Oy vey (to channel my grandmother).
Remember back in 2013 when Fortune hatched the genius plan called “Trusted Original Content”? The idea was to leverage Fortune journalists — hey you can only write so many stories about Warren Buffett’s investment theories and the growth of Amazon — to pen stories for pay to be distributed through the channels of the client’s choosing. Capital One signed on as Fortune’s first client. What’s in your wallet … after you’ve been fleeced? The service never gained traction.
Now here comes Bloomberg thinking out of the terminal in a quest to find more than loose change under the sofa cushions. According to FT, the Bloomberg service will cost between $150K and $200K per month on average. I would love to see the slide deck that rationalizes the ROI for signing on the dotted line for the Bloomberg service. Then again, if you believe the counter-intuitive logic that the more a client spends, the less it cares about ROI, at these rates it could be that Bloomberg didn’t have to cross the ROI bridge.
Bloomberg has anointed Andrew Benett the official mastermind behind the new initiative.
It’s worth noting that Mr. Benett comes from the advertising world, starting at McCann Worldwide with stops at Euro RSCG and Havas before landing the Bloomberg gig.
At the risk of stating the obvious, the consulting business doesn’t scale like the terminal business. Analysts figure 80 percent of Bloomberg’s $9B in annual revenues comes from its terminals business. This is a company conditioned to fat margins. I don’t see how their dalliance in the communications business can have a happy ending. Even if they can grow the revenue — and that’s a big “if” — the margins will look like Johnny’s paper route in comparison to the terminal business.
I’ve put a note in my calendar to check back on Bloomberg’s consulting arm in a year.
I don’t think they’ll be around.
If there’s one publication that might pull off the move into communications, it’s The Onion. They could own the market for parody PR, and the margins would be upgraded from the media property.
If Bloomberg buys The Onion, I want a finder’s fee.