Bob Carrigan an Online Innovator — and CEO of IDG Communications — Explains Why New Media Is the Most Optimistic Part of the Economy

strategy+business

ISSUE 66 SPRING 2012 The Thought Leader Interview: Bob Carrigan An online innovator — and CEO of IDG Communications — explains why new media is the most optimistic part of the economy.

BY ART KLEINER

REPRINT 12107 Photograph by Peter Gregoire Peter by Photograph

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were some of CIO, CIO, Computer GamePro and and Carrigan Carrigan was also the 2011 vertising Bureau (IAB). The IAB is a IAB is The (IAB). Bureau vertising media 500 than more of consortium and technology companies that sets standards for online advertising for mats, produces research on online and interactive media, and plays an active role in developing guidelines to related such issues as privacy and advertis online of measurement the world, its main titles). During the a to popular era, moved he dot-com early music startup, Spinner.com; then moved to AOL, which purchased it; back to then IDG moved in 2005, positions. executive of series a taking By that time, IDG new had a as form, beguncurrent its into to evolve media pioneer, producer well- the of (including events expositions and Ap where expo, Macworld known ple has announced new over the years), innovator products in mobile Internet publishing, and developer lead and advertising of forms new of Carrigangeneration. has been chief of executive IDG Communications since 2008, with a particular focus on innovation. elected chair of the Interactive Ad was primarily known for its tech nology magazines ( world, PCWorld, InfoWorld, Mac - - - - Carrigan is one of the leading keting innovation. He began He keting his cainnovation. reer at IDG in publishing and sales in the 1980s, when the company broadband, social media, online ad vertising, mobile Internet, computing, online cloud lead generation, media all are we — e-commerce and now. companies proponents of change in this sector, both as a on spokesperson new me IDG, at maker decision a as and dia, putting into practice about online publication and mar new ideas ecosystem ecosystem — the conﬂuence of - -

hat hat is role the Internet’s in revitalizing economic circles, some In growth?

THOUGHT LEADER THOUGHT Bob Carrigan new media is the most part optimistic of the economy. BY ART KLEINER

An online innovator — and CEO of IDG Communications — explains why why explains — Communications IDG of CEO and — innovator online An The Thought Leader Interview: Interview: Leader Thought The it is considered a disruptive destroy sector. sector. Thanks to the growth the marketingof and media continued of the International Data the Group), Internet is now a major source of business innovation for every of IDG Communications (the pub lishing, media, and events division seen seen as a specialized industry, with little relevance to other sectors. But to people like Bob Carrigan, CEO er of value. In others, new media is W

thought leader 1 thought leader 2 ------There There are much lower Well, it’s head-spinning head-spinning it’s Well, But But when barriers to entry How much of a difference does of much a How difference

When I’m with IAB members IAB with members I’m When barriers barriers to entry The ago. for year a online even media were there than cost of technology is not a barrier; de good finding is part hardest the velopers for original ideas. With the cloud — not just storage cloud, but in all the the publishing apps, templates, formats, and software so lutions available there — you can provision media in a much more ef and I way, ficient think going that’s to change the industry further. CARRIGAN: CARRIGAN: S+B: CARRIGAN: S+B: come come down, doesn’t that lead to a up? coming rush of competitors — — who are IDG’s competitors as well as its collaborators and custom ers, and sometimes the same com panies are all three — I see them as in entrepreneurs the best sense of the investing, word. They’re tak ing risks, creating a global market place; they’re developing alternative how many competitors are emerg for example ing. segment, In IDG’s — technology, media, events, and research — the field is more also it’s com But was. ever thanit petitive bigger than it ever glob was, particularly offerings our to come people as busi the enter to thing one It’s ally. ness with a get to the execute, another right au digital platform; it’s dience, develop a good relationship with that audience, and build the keep to needed trust the and content them coming back. I would like to think that in every segment related to digital media, some companies con offerings, top-quality have will tent, and solutions, and they’re go win. to ing it make that the cost of online invest online of cost the that make it down? ment is going

------Yes, I think it will. That will. it think I Yes, Do you think this growth will This This represents a big change And this industry is not an is is not industry this And way way up from the million 1.2 people that it was in 2009, when the IAB lastsurveyedindustry. the from from the somber years of 2009 and 2010. Companies in this industry are actively looking for talent: needsoftwareaCFO,a CMO,a “I de veloper.” Media companies are put to in ting work meaningful, people sustaining, fulﬁlling growth jobs business that is just begin in I although And stride. its hit to ning a number exactﬁgures,the have don’t of marketing employees is clearly directly directly with consumers, reduce supply chain friction, and connect customers. international with economic economic activity does that gener ate? I think it’s huge hard that it’s question no there’s but to quantify, growing. and land. The tools and being solutions developed — real-time bidding, au tomated exchanges, reputation sys tems, and so on — could be used more throughout the economy: more to connect commerce, more drive vard Business School] estimated that estimated School] Business vard the Internet advertising-supported creates value economic of $444 bil lion per year. And then the there’s echo effect. Facebook signed up its 800 millionth user in Coca-Cola mid-2011; has 35 million “likes” on its right fannow page, and Star show Statistics million. 25 has bucks that people who “like” a company or interact with it are more likely to purchase from it. How much 2009 study [conducted 2009 for study the [conducted IAB by Hamilton Consultants and John Deighton and John Quelch of Har S+B: CARRIGAN: have have a major impact on the rest of the economy?

------Au s+b, .) .) The Interactive Adver Interactive The Amid anxiety about the econ- We became interested in Carri try was up 23 percent in revenues, to to revenues, in percent 23 up was try billion. US$15 Internet Internet and online ecosystem — not just Facebook and but Twitter, everything from data providers to analytics ﬁrms — are doing well. very There’s an incredible amount of activity, including a lot of venture capital. For the ﬁrst six months of the 2011, online advertising indus tising tising Bureau conferences are sold out. Companies that are part of the CARRIGAN: ships ships that consumers build with the mediathey trust. This interview was conducted in two both in in conversations, May and New Oc York, tober 2011. S+B: to us have been Carrigan’s thoughts on revenue and business models; electron The revenues. ad and tions ic media of the next 20 years will instead be supported by a variety tumn 2009.) Of particular interest berg berg is a former editor-in-chief of strategy+business ing ing effectiveness. (Disclosure: IAB Rothen Randall CEO and president of of forms of revenue, sponsorship, and reader lead generation, grounded all in the ongoing relation too many companies, are he still argues, thinking of media enterprise as an supported by subscrip dia,” dia,” by Matthew Springs, Hawkes,andGreg Egol, Harry magazine. (See Generating for Model New Carrigan’s “A piece, short Print Me in Leads,” “Reinventing gan’s gan’s perspective when he speaking began and writing about innova in including tion, the pages of this online retail entrepreneurs as “un abashed optimists.” Where do you optimism? see omy, omy, you’ve referred to media and

issue 66 issue strategy+business

- - - - - Yes, Yes, as opposed to a label aggregator. aggregator. label - In other words, Tech Briefcase Briefcase In Tech other words, If If you give people exactly what We went to great expense to cre Just Just to be we clear, app publish our publications. ate this mobile app; we was more It did tests. utility and groups focus than tra like software development publishing. magazine ditional pref their respect you and want they erences, they’re willing to give you information about themselves. We progressively capture we then and richer them, about data richer and can reach very through highly targeted programs, specific subsets drawing in material from any of like and retrieve the full document laptop. their on later S+B: S+B: CARRIGAN: and and they love it. They think publica they online of genie the can put tion, with all that loss of control, back in the bottle. video. They or may shows, add slide animation, replicas of some of our own as magaBut them. in believe we and zines, a sign of the future, they’re not all digital digital replica of a print magazine. seem to think Many publishers that digital replica apps are the future, is a brand without walls, your own private ------It means earning per What is lead generation? generation? lead is What sales leads for vendors and all sorts of electronic commerce nothing to that do with magazines. has We figuringjustwere whatgenlead out eration was nine years ago. The ca pabilities added we’ve in “lead gen” tremendous. been have S+B: S+B: CARRIGAN: provides those users abstracts of the types of white papers they want. They can bookmark the ones they smartphones smartphones and tablets in conlookingworkplaces.for They’re their tent, but their devices are not opti reports. mized viewing in-depth for So we place an app Briefcase on their calledmobile device; we Tech distribute it through the us with register to users ask but store iTunes when they first open it. We learn their preferences through the regis tration process, and then the app mission from members of your audi your of members from mission ence to products and provide services offer or them, information to to them, on a targeted basis, ideally pro buying the in it need they when does that company Any cess. media es a service, great this is providing pecially on devices.mobile Our au dience a includes of lot IT and tech professionals, walking around with

- - Our magazine category, magazinecategory, Our

business. + How How did IDG begin its own Fortunately, Fortunately, our readers and moves in online innovation? innovation? online in moves S+B: S+B: CARRIGAN: The Lifetime Value of a Name Value The Lifetime energy energy efﬁciency. They’re focused on creating value. And that’s why optimists. they’re sources of power generation and is editor-in-chief of of editor-in-chief is strategy Art Kleiner kleiner_art@ strategy-business.com databases of customer names; now we use those databases to generate like lead we generation, repurposed our traditional assets. For example, we used to use magazines to drive pure pure play; the old IDG had little to do with them. With other ventures, vertiserwaswillingwho tryWe toit. built a lot of digital businesses that been have ventures our of Some way. propose a new idea about lead gen program,new createsome or eration ﬁnd an ad and generally we could visitors visitors are digitally savvy and our advertisers are experimental. We’d We We had to experiment wildly and create an innovation culture just to up. keep platforms. platforms. There weren’t a lot of othermedia categories inus.frontof technology, technology, was like a canary in a coal mine: Our audience rapidly moved to interactive and digital

thought leader 3 conversationthought leader thought leader 77 - - - - - Com or or CIO app. You have the right Suppose we learn thatre you’re Let’s say you’re in our database in database our you’re say Let’s IT executives IT meet executives there and inter act with peers. As our specific and targeted data about you grows over for your company. You’re interested for your You’re company. in cloud computing solutions and virtualization strategies. We know that and information, need that you you talk to vendors as part of your introduceSowe sponsors job. to you that exact the information thathave you’re looking for, and we charge each sponsor for that introduction. We also havesuch as the CIO Executive Council; fee-based offerings, more specific, like the puterworld to unsubscribe at any time, but you send and as you respect as we long highly targeted and relevant con tent, you won’t unsubscribe. As we filter material for you, we capture more and more information about not you. takingWe’re advantage of earningyou; we’re your trust. for sponsible buying storage systems us and hopefully the richer the IDG the richer the hopefully and us person. that for is experience because you downloaded an app — either Tech Briefcase or something and and counting. It’s a big number. Which is not to say that we have their to permission sell them any thing we want. We earn their trust more The time. over permission and we interact with an individual, the better the business opportunity for dience dience members around the world ------is the most Macworld Firstall,of wehave rela How How does capturing a name We spend a lot on app develop tionships with about 12 million au million 12 about with tionships translate translate to gold? What’s the trans action at the end of the rainbow? CARRIGAN: CARRIGAN: S+B: S+B: to register with us outside of iTunes; gath it data the share doesn’t Apple ers on so iTunes, we do it ourselves. atten someone’s we capture When the life we recognize this way, tion time value of his or her name. That us. to gold is interactivity interactivity and name capture. For Briefcase Tech use really to example, Macworldor Daily Reader,haveyou These These apps, and our device mobile are all innovations, part of our evo lution from print media to company. a media interactive more ment, in part because we have ideals because but largely quality, around we see our best opportunities with loads. It doesn’t look anything like the magazine; it’s a dynamic, very slick, mini version of our website. you. We’re not taking advantage of of advantage taking not We’re you. earning your trust.” we’re you; ing a digital replica, we created the Macworld Daily Reader app. gotten It’s more than 250,000 down capture more information about about information more capture substantial opportunity in creating service-oriented software-like appli cations that blend our magazine content, conferences, and websites. For example, we you, for material filter we “As that exciting; in fact, they’re some in that fact, they’re exciting; what limited. We’ve found more magazine in print. Instead of creat successful computer Apple-oriented

issue 66 issue strategy+business ------We used to be very or For example? example? For Even at IDG, we had to let go of of go let to had we IDG, at Even It It was relatively easy for IDG Another major example of let example major Another strains them. danger There’s practices. old of lot a op also immense but that, doing in a in letting go, Ironically, portunity. capable. more becomes company George, George, the English prime minister in the 1920s, who said, “The most dangerous thing in the world is to jumps.” two in chasm a leap to try because we’re an independent, pri vate firm, and have been years. Many for publishers and 47 media companies were acquired by larger public companies or private equity firms. The financial got into groups media because it looked like a safe place to invest. Then the downturn came, and the fundamen business tally changed and companies were financial of thislayer with burdened obligation. Many have restructured since then, but their debt still con once, once, or where most of the content IDG. besides places from coming is ting go for us was the rise of online ad exchanges and real-time bidding technology [an automated way of managing online advertising trans the outside from cameThis actions]. than rather but industry, publishing derly derly with our magazine with separate advertising rate brands, bases each for and newsstand distribution title. But that’s not the way users experience media anymore. People consume media from so many dif ferent sources that you have to let go of the individual title as an or had to orga We ganizing principle. nize ourselves differently, removing internal barriers. An editor or pub lisher might now work on a project that serves several different titles at S+B: S+B: CARRIGAN: ------They They have to change What does a media company — company media a does What In In any media company, you The right vendor content is also is content vendor right The strategic strategic partnerships with technol ogy firms. And reinvent fast. yourself I like to quote David Lloyd to you in his blue jeans,his inblue with you his$40 to billion market cap, 50 times stock multiple, and army of hotshot VC financiers, embrace him and em brace what he stands for.” unfamiliar of things lot a do to have in-house more Conduct days: these R&D, hire some young engineers and turn take them loose, courses, go to tech meetings, and develop their their mind-set: to rethink and re build their ways of delivering con tent and advertising, and connect ing with like more their become to have companies prospects. Media technology companies. The way I at it the annualput IAB meeting in was: 2011 “Instead of downplaying or doubting the next sitting wunderkind 28-year-old value of that CARRIGAN: CARRIGAN: and how they fit. The value in ven in value The fit. they how and dor content comes from contextual presentation: If you see a conversa virtualization, about Twitter on tion with white papers from vendors on very a that’s it, virtualizationto next service. valuable S+B: for for drawing people in. They conversations, user the also in participate oftenas hosts. Anyone can find con versations on Facebook, but on brands focus those conversations our specific topics with trusted journal core. the at ists revenue. for just not and important, Our audience wants to know what products are available from them reviews, but they are all important zationally to experiment like this? this? like experiment to zationally or, or, for that matter, any marketing company — need to develop organi

------Our Our programming How How important is the social Editorial content — content authorita Editorial That’s That’s why we’re aggressive interested in that? in interested grams aimed at needs. your Wouldn’t you expect particular adver tisers like IBM and Citibank to be the years, always with your permis your with always years, the pro focused very create can we sion, CARRIGAN: CARRIGAN: S+B: S+B: One Jump across the Chasm One Jump across putting putting your users in another? one touch with media media aspect of your business — knowledgeable knowledgeable friends and col content. content. The number one source that users go to about for what to information buy is social: their strategy is based on a three-legged stool: social, editorial, and vendor ionated critics whereas others are of focused more on the industry, tive tive and trusted writing — is more important than it ever has opin highly are editors our of Some been. sub-communities. ates percent10 of our inbound traf creatingfic. We’re a lot of programs around social media, by building Search engines are still by far the most way common that find people gener media social but media, IDG for for us. We have the largest community on CIO LinkedIn, with al most 45,000 registered members. about about embracing outside social net works, which have become an im portant part of audience generation nect them. as we call them, who give more ad more give who call them, as we impor it’s So receive. they than vice tant to unlock better ways to con have have always told us they want talk to with Our one another. readers include many influential end users, leagues. Editorially driven informa tion ranks second. Our readers

thought leader 5 thought leader 6 ------to describe this this describe to SoLoMo Every mobile device also re But it’s not that simple. Smaller that simple. not it’s But display display or their office computer. There will be a lot of targeting and gathering of data based on where located. are people quires technical customization. It’s going to be challenging for publish their invest to where out figure to ers do from my laptop. [Venture capi talist and Kleiner Perkins Caufield coined Doerr John partner] Byers & the term new world: It is “social, local, and mobile.” Smartphones will recognize where people are located, who with, and connected they’re what’s near them. Advertisers will soon de compellingvelop ads that run across will people startplatforms; multiple to follow an ad on their mobile de vice, and then pick it up on a retail guage] rolls out, it will reinforce that reinforce will it out, rolls guage] temptation, bringing people back from apps to the The Web. current ker little in apps of lots with system, nelstalk that don’t another,toone is unsustainable. devices will foster a Web environ ment with very different forms of interactivity I and interdependence. time more spend using a lot Twitter, than I mobile my instance, from for

- - - - - and and we recog Network Network World This This is probably the Computerworld, What What will be the impact of the There’s There’s a temptation to treat old old form quali of you’re once qualifying example, For people print. in online,IDGtitleyou’re with fiedone qualified with all of them. If you registered with to go then browsers, especially browsers, when designing for tablets. As HTML5 [the next- lanspecification website generation design for it in a wayWe’re consumer? and marketer both that serves out. that figure to trying all mediamobilelike conventional Web biggest biggest area of focus for In right now. IAB’s members most the of fourth quarter smartphone of 2010, shipments exceeded those of PCs, since. ever higher been and they’ve Mobile media is only going to be come more prevalent, more useful, and more dominant. How do you quote David Lloyd George, who said, said, who George, Lloyd David quote thing...is to dangerous most ‘The try to leap a chasm in two jumps.’” “Reinvent yourself fast. I like to to like I fast. yourself “Reinvent Designing for “SoLoMo” Designing for S+B: CARRIGAN: mobile Web — the migration of more more of migration the — Web mobile and more activity to Internet mobile media? and marketing on — devices nize you. We’ll say, nize in you. say, We’ll effect, “How are you and doing?” send you rele material vant and offers.

------controlled That’s exactly right. We when talking about this They’ve qualified themselves. themselves. qualified They’ve We also had to let go of the way way the of go let to alsohad We kind of online lead generation, be kind of lead online generation, the from differently so works it cause don’t don’t even use the term circulation CARRIGAN: We spend a lot less effort qualifying a lot spend We them, but they ironically, are much better as sales prospects for IDG’s have they because clients, marketing infor receive to steps these all taken anevent. attend or mation S+B: a a print magazine. With each new step, they move further down the marketing funnel as qualified leads. and content syndication with differ with syndication content and media ent companies. those of Most but registering, without leave people a percentage of them download an app, subscribe to an one for up sign e-newsletter, or paper, white a read of our more than 750 events each Or they to year. may even subscribe We draw in potential cial users media, from Twitter, search, online so the conversations, mobile Internet, we qualified our customers’ names for controlled circulation [in which specialized audiences receive spon sored publications free of charge, and the magazine must certify that a have We the fit criteria]. recipients much wider purchase funnel now: selves, directly connected to our tra our directly to selves, connected base. reader ditional seeing seeing it as a threat, we partnered with one of those firms, and the about then technology, cre learned ated our own startup ad we’re Now network, the IDG TechNetwork. a category leader in this field our

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------The The last thing a dy But governments seem to have have to seem governments But I understand that the transition that I the transition understand If If you at look the job- positive, S+B: CARRIGAN: Look Look at political gridlock; Demo crats and Republicans agree refuse on anything. to They need to learn works, that that “coopetition” of the is side aisle althe not other competitor. the ways is difﬁcult. There will be hiccups, problems, and security issues. But for them to change. That’s why gov themchange. why to for That’s ernment efforts to regulate or man age the online world, or for matter that the ﬁnancial world, such little credibility. have creating innovation that has curred in our oc business, it’s mainly from disruptive pure-play, compa nies by that the enabled were Inter net. Something similar will inevita There is to happen bly government. a huge potential in reducing costs, connecting users more directly to solutions, and displacing many old ways of doing things. But the U.S. government has by and large not adopted electronic technologies — in role major a played it though even problems the at Look creatingthem. in healthcare sharing e-voting, with formation, and the postal system. namic, employment-generating in dustry like ours needs is more gov ernment regulation. In fact, most legacy large the like are governments publishers in our need industry. they and approaches, new need They to make major investments in revi talizing infrastructure, but hard it’s to regulate the Internet more — just more Internet the to regulate abuse. for potential the of because

------People confuse this with more heavier government regulation, es pecially if financial and medical in gathered. startsbe to formation come up with the initiative. initiative. the with up come serious privacy violations, such as data leaks [releasing tracking sensitive information to third or par be to [pretending phishing and ties] a trusted electronic vendor to quire ac sensitive information]. That’s one reason we have to be more dili gent — to create a self-regulatory impact, so that we don’t provoke what information about what them about information is be ing captured by that and it how site has been used. They should also be able to opt out. The Better Council Business of Bureaus cred I manages enforcement. and complaints it Randall Rothenberg for pushing this agenda and getting a coalition of publishers and other groups (in cluding the Association of National and the American Advertisers Asso ciation of Advertising Agencies) to and control to visitors. You can see You to visitors. and control the companies; list of participating it Hearst, includes Gannett, Express, Google, American GM, Adobe, ProcterGamble,& andmany others — including several dozen ad net works — so far. When consumers click on the eye, they should see - - - - There There is no more im What’s What’s the current state of The The IAB has had an ongoing In current practices, there’s a lot lot a there’s practices, current In let things percolate. too too rapidly to freeze standards for advertising mobile devices, to want We days. still early it’s cause be resources. resources. The IAB has not moved thinking on privacy? privacy? on thinking “forward eye” icon — displayable by by displayable — icon eye” “forward sites that guarantee transparency IAB was of also the of founders one the Digital Advertising Alliance, which developed a forthcoming Matters.” We have a code of conduct conduct of code a have We Matters.” we require members to sign. The stillraises concern. campaign on this called “Privacy ticularly ticularly around ad networks, and although most of the data is identifiable with a not personal user, it on on data about where they visit and what they purchase. This is a big practice in the online industry, par of confusion. The primary issue isthe tracking of — online behavior based people to advertising targeting used the right way. way. right the used the the industry to grow, consumers have to that feel confident informa tion collected about them is being portant portant issue in our industry. For CARRIGAN: CARRIGAN: S+B: S+B:

thought leader 7 thought leader 81 ------

+ Reprint No. 12107 It’s very difﬁcult to make these Another Another challenge has to do tion. It’s natural to hope that things things that hope to natural It’s tion. in this but will envi the same, stay ronment, they rarely do. I when think we look back, three or years we’ll ﬁve from allnow, regret that quickly. more move we didn’t measured, measured, sold, and bought, it will be very hard for in out roll to sponsorship and electronic merce com way. effective any types of changes, and anything elec about special I there’s think if tronic media, that it’s we sense the inevitability of change. We feel it. But even with us, there’s a hesita rics and measurement quality. Until Until quality. rics and measurement we have a cross-industry agreement on how brand advertising should be ment in media and marketing. neu The developing on working is IAB tral, third-party standards for met have to grapple with that. with grapple to have with the chaotic state of measure

------One One big one has to do What major challenges will on What major challenges in revitalizing infrastructure.” legacy publishers. They need new new need They publishers. legacy invest to need they and approaches, with with us. But I see don’t how it can envi political current the in happen ronment, where nothing gets done reigns. pessimism and S+B: CARRIGAN: government government could be a participant large like are governments “Most tably be so heavy-handed that they’ll that heavy-handed so be tably block the economic growth because bad, too they’re It’s foster. to trying the disruptions will happen anyway, anyway, happen will disruptions the either with In it. the without or involvement ment’s existing govern the any meantime, efforts to regu late privacy from willoutside inevi line media and marketing face next? next? face marketing and media line people work is work people intertwined with the all way they to going and live, we’re how how to secure it and provide it.” data on company the and e-mail my Everyone is going to have to deal with this consumerization of IT. will be cre companies of new Lots ated to provide solutions problem, to but this ultimately, it’s purely a not technology issue. The way and more users are saying to their IT their to saying are users more and departments, “I want this tablet to be my primary device. Figure out with integration. How do you corral you do How integration. with produc activities online these of all tively for your organization? More strategy+business magazine is published by Booz & Company Inc. To subscribe, visit www.strategy-business.com or call 1-877-829-9108.

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