“Let’s face it, producing good, exclusive content is expensive.” This phrase, often uttered by Latin American B2B hubs executives, may become even more relevant as broadband content emerges. Let’s not forget that program production represents about 30% of TV companies’ revenues.
One of the keys seems to be finding the right answer to the question of whether it is better to outsource content production or to create it in-house. Gabriel Rosales, founder and CEO of I-Negocios, notes that most Latin American B2B portals outsource. In many cases, this outsourcing involves buying the services of press agencies. But contracting relatively standardized texts from press agencies raises the question of whether this is really the content that the Internet user who comes to a B2B node is looking for.
On the one hand, the question is whether the content is specific enough. On the other hand, the question arises whether these texts are adapted to the cultural reality of the Latin American B2B Internet user.
I-Negocios bases its strategy on the development of its own content. The company defines itself as “a transactional virtual space based on specialized information”. The journalists hired by I-Negocios produce a total of 180 articles per day on four sectors (pharmaceutical and chemical, automotive and auto parts, telecommunications and IT, construction and decoration). “We only sell content to Screaming Media,” says Rosales, whose strategy clearly revolves around producing content to attract clients who then use the node to make transactions.
Artikos Network, a company created by the Mexican bank Banamex and the U.S. company Commerce One, among its services is the development of specialized B2B content in Spanish and Portuguese.
A relationship with traditional media of B2B hubs?
In addition to the high cost of developing in-house content, some observers wonder to what extent the journalist is not a “maverick” who finds it difficult to work in a traditional business organization. An appropriate answer to these doubts may be a partnership model with a traditional media company.
This strategy seems to be the case with eAmigo, a node supported by the Mexican telecommunications company Telmex. eAmigo does not yet offer much content on the industries it serves, although it will soon offer text and images from the main industry magazines. Another example of the synergy between B2B portals and traditional media is Construmix, a Mexican B2B site dedicated to construction and backed by Mexican cement company Cemex. Construmix has a partnership with the publishing house Obras.
Latintrade represents another trend: that of media that see their content assets as having a good chance of being monetized through the collection of B2B e-commerce commissions. First and foremost, Latintrade is a magazine with a wide circulation in the Latin American business community. With the advent of the Internet, this company intends to leverage its popularity and content to become a meeting place for companies that sell and buy products from a wide range of sectors, including the intermediation of financing credits for exports and imports.
… or outright invasion of traditional media (see Primedia).
U.S.-based Primedia, which describes itself as “the king of niche content,” exemplifies this motto. Primedia owns dozens of B2B magazines. Last year, its B2B division (it also has a B2C division, which it bought a week ago from About.com) had revenues of more than $600 million. With the advent of the Internet, Primedia’s goal is to put some of this vast amount of information on the Web. Primedia is also leveraging the distribution power of its physical magazines and their strong brand image to promote its presence on the Internet.
The creation of the B2B portal Industryclick is a cornerstone of this strategy. It has several vertical portals (Telecommunications, Marketing, Transportation & Trucking, Power Construction, Agribusiness, etc.). Tim Andrews, President and CEO of Industryclick, said in a recent presentation that the focus of this B2B portal is “to provide critical information to executives in the various industries […] and to surround e-commerce with unique content and community”. Primedia’s B2B Internet division (which includes Industryclick) expects to bill between $18 million and $24 million in advertising and e-commerce this year and to post a negative EBITDA (earnings before interest, taxes, depreciation and amortization) of $20 million to $25 million.
Does Primedia’s strategy seem to have substance? Will traditional content providers like Primedia be the ones to take the cake in Latin American B2B?