Survival in crash market
Despite the downturn in the new economy, Netzwoche and Internet Standard are benefiting from trade shows and exhibitions
The environment for the launch of the two new Swiss Internet titles Netzwoche and Internet Standard could not have been more uncomfortable. For just as the B2B paper Netzwoche was launched on April 19, the crash of the New Economy in the USA had begun. In the aftermath, there was nothing but bashing for the Internet industry, whose players were almost being brought close to criminals.
And when the public stock Internet Standard hit the market on August 18, the crisis of the New Economy had fully spilled over to the Old Continent. The share prices of even the best companies shrank to small fractions of their original value. Many young Internet companies disappeared from the scene altogether.
Potential advertisers for the young papers thus died off, and the surviving companies have to be frugal with their funds. A sad reality for print products that were still being planned in the heyday of Internet speculation. But this development has not only caused the investment power of an entire industry to shrink. The never-ending flow of bad news has also thoroughly scared away the public's interest in the new economy.
This has a marked impact on potential readers' demand for the new papers. Both are still being coy about detailed figures. Claude Settele, publishing director of Internet Standard, confirms that his paper sells fewer than 1,000 copies per issue at newsstands. This is not a good sign, because this sales channel shows the vitality of a title like nowhere else.
But even in terms of subscriptions, the Internet Standard has only reached 5500 copies, according to Settele - far, far from the target that was once set. According to the original business plan, the target of 17,000 copies sold was to be reached by the end of 2001. Now Settele is cutting back and considers only 10,000 copies to be realistic by the end of the year.
Optimistic budgets are now being downgraded
At the newsstand, Netzwoche is doing very similarly to Internet Standard - also "under 1,000 copies sold per issue. However, the newsstand is also much less significant for a B2B paper than for a general-interest title. According to publisher Heinrich Meyer, the personally addressed circulation of Netzwoche fluctuates between 4000 and 6000 copies per issue, depending on marketing measures. In addition to annual subscriptions, this also includes trial and introductory subscriptions.
"The budget was made in a completely different time," says Settele, explaining the discrepancy between the original claim and current reality. The former publishing director of Internet Standard, Martin Meier, who has since died of a serious illness, had even aimed for a circulation of over 30000 copies in 2003. "I no longer consider that realistic either," says Settele, who switched from editor-in-chief to publishing director after Meier's death.
Too small a marketing budget now takes revenge
Settele also admits that Internet Standard invested too little in marketing in the first six months since it was launched. This will now be intensified. It wasn't until December that they found someone to really take care of marketing in Daniel Allemann (previously at Cash). The low marketing effort at the kiosk was particularly noticeable. Instead of increasing the pressure, the presence at this sales channel, which is so important for the image and awareness of a title, decreased more and more. In the meantime, the notice poster for the Internet Standard is only exceptionally encountered at a newsstand.
But it's not just in the reader market that the air has become thin. On the advertiser side, too, the reality looks very different today than it did six months ago. "The dotcom companies are running out of money, so now they have to use their funds in a very measured way," says Settele. Gone are the days when the cash reserves from IPOs were still bulging and the young start-ups could place ads as if they were already large, established companies.
Nevertheless, a rich source of advertisements is still intact: At trade fairs such as Internet-Expo, Orbit, Jobfair or Karriere-Expo, advertisements are plentiful, because at these hubs of the New Economy, every company that has something to do with the Internet wants to make its presence felt. At such exhibitions, both Netzwoche and Internet Standard can realize their big numbers. With the consequence that, whenever possible, two issues are produced at the same time for a trade fair.
Instead of three to four pages of advertisements, as encountered in the normal issues of Netzwoche, for example, there are twelve to fifteen pages in these special issues. The same can be observed at Internet Standard: Instead of an average of three or four pages of advertisements, as in the normal issues, there are also ten to fourteen pages of advertisements in the issues for trade shows.
Both titles made a serious miscalculation in their role as a platform for the job market. When they were launched, both Netzwoche and Internet Standard had banked on their importance for the IT industry's job market. Far from it. Because the job pages in the normal numbers rarely have more than one or two job offers. "We expected more," admits Netzwoche editor Meyer. "We thought it would take less set-up work," argues Settele. One main reason both blame for the weak demand: Good employees in the web sector would be contacted personally or via headhunters.
"If it goes further down, we'll have to go over the books".
But despite the catcalls in the New Economy, Netzwoche and Internet Standard are confident about their future prospects. Settele admits, however: "If things go down any further, we'll have to go over the books." For the time being, however, the situation is not dramatic, he says. He also points to the advantages of having a large and financially strong company behind him: "IDG produces around 300 print titles worldwide, and quite a few of them took a long time to become successful."
Likewise, no alarm bells are ringing at the moment at the B2B publication Netzwoche. It has its costs under control and will break even as early as this year, says Heinrich Meyer. He is convinced that demand for advertising space will not fall any further despite the decline of the new economy. "Because the so-called old economy is now investing consistently and gearing its organizations and operations to the Internet and e-business - hype or no hype."
