I just got done reading this interesting article “Media execs are asleep at their own wheel” over on the Go Big Always blog written by Sam Lawrence. Sam’s observations about how the long-time tech media companies are way behind in adopting social media - and in the way that they adopt social media once they make the decision to do so - are right on. To quote the post:

“Yes, I get their business model: serve as many pages as possible so they can have enough media “inventory” to sell lots of ads. And then there is subscription. That’s when you collect names through registration forms so you can market the lists and/or prove your readership demographics to advertisers. This is basically the old print media model online. And it, like other old-fart models, is stuck a decade behind.”

I completely agree with Sam - traditional tech publishing companies don’t get it and haven’t adjusted to the online business models. But although I agree with Sam, I actually have a bit more tolerance for their slow transition because I understand what motivates them and what’s holding them back.

Here are four reasons why I think that traditional media companies are so far behind in adopting social media:

1) They are still trying to support a print circulation model. Historically, in the tech trade publication world of IDG, what was formerly CMP Media, and Ziff Davis Enterprise, it has been all about getting a qualified audience to support a print magazine. The subscribers to these companies’ various print titles don’t pay to receive copies of the print publications, instead, they trade detailed demographic data to prove that they are worthy of receiving the magazine. The publications, in turn, provide the demographic data to advertisers to demonstrate that they have the “qualified audience” to warrant the vendor spending $50k+ on print advertisements.

The secret is this - it’s incredibly expensive to qualify this audience. Every year, magazines lose thousands of subscribers who don’t re-qualify. So circulation managers are constantly trying to recruit new, qualified readers for their magazines. This is costly - and traditional media companies have started to use every online audience touchpoint that they can to try to continue to qualify audiences, including social media registration forms.

2) It takes a long time to make the necessary infrastructure changes. One issue that the tech publishing companies have is that they are stuck with legacy systems that were created before the term “social media” even existed. While blogs that are newcomers on the scene were built from the ground-up to support social media, the big publishers are struggling to make the smallest changes to their massive publishing systems that will allow them to play in the social media space. These companies have millions of pages of content - all stuck in ancient content management systems that they adopted in the 1990s. This digging out of legacy technology and making the transition to Web 2.0 technologies is not going to happen quickly, easily or at a low cost for these companies.

3) The leadership doesn’t even know what social media is and/or doesn’t have time to stay on top of the latest developments. There are a lot of really smart people working in big media companies - and there are also a lot of really outdated people working in these companies. Much of the leadership in the tech media industry reached the level at which they are at by mastering print readership models - very few of today’s leaders are visionaries promoted to the top because of their success online. There are of course exceptions; but if you were to discuss social media with the majority of the executives at traditional tech media companies, they would mention blogs and message boards - and that’s about it. And with the precarious state of many of the tech publishers at the moment, few have time to stay on top of the day-to-day changes and developments in social media - most are trying to just stay afloat.

4) They are afraid of social media. Although these tech media companies will talk about the “separation of church and state” - meaning the fact that their writers are in no way influenced by their advertisers - the truth is that the media companies are terrified of what will be said by users about their advertisers once the barriers are opened up. Media companies know that they will not be able to control the conversation with a heavy hand, but they still want to maintain some semblance of control so as to not completely alienate advertisers. Until media execs feel comfortable with this fine-line, they will not be able to whole-heartedly embrace social media.

(Disclosure: I was formerly an employee for IDG’s Network World and Ziff Davis Media; and am currently a consultant to Ziff Davis Enterprise.)

Photo by Cappellmeister

I haven’t written much about Pure Incubation in awhile – in fact, you may have noticed that for a couple of weeks, my posts (in general) were a bit sparse. This is because I was totally consumed with preparing for my first board meeting.

I haven’t been involved in a board meeting in years. The last time, I was working for Publish magazine, which was an IDG company, and the president of my group had to present to the board of IDG corporate on a quarterly basis. I didn’t attend the board meetings, but I always had a lot of work to do prior to the meeting, helping to write up the executive summary, reporting on my department’s activities and putting together plans for the quarter. In those days, all normal activity came to a screeching halt for three days as we worked on compiling all the data that was needed.

This time, I didn’t have a team of people helping me with the materials for the meeting. My bookkeeper helped with the budgeting, but I was on my own for all the presentations, handouts, strategy, vision, power points, printing, binding, etc. It was a lot of work. But I can’t say enough about how much it helped me with the focus and direction of the business.

There has been a lot of debate over the necessity of writing a business plan. And I’m not sure that writing a formal business plan is necessary at an early stage of the business, although formal plans may become necessary as the founders try to get investment, or try to sell their business. But I am a huge advocate of putting your plans on paper, in some form. Here’s why:

No matter how solid the plans are in your mind, you’ll find holes when you write things down. This is true in about 99.9% of the cases. I’m sure that there are exceptions, other people like Jack Kerouac who famously wrote On the Road on one long scroll, but in general, things get clearer when they are written down. I have talked extensively about my business with a number of advisors and board members in the past, but I hadn’t ever articulated the entire vision at once. (It’s a big vision!) Although I had all the ideas in my head, I hadn’t put them in a format that was concise and easy to explain. The process of putting everything on paper and editing things, I was able to see how certain concepts and ideas were confusing, and I was forced to clarify them so that they would make sense to someone outside my head. For this reason alone, the planning process was worthwhile.

You can give the plans to other people to get a different perspective. I have a lot of experience in a lot of areas, but I am weakest in the sales department. I have always worked on the product, I have never done sales. And I have always worked with sales geniuses in the past, so I haven’t needed to get involved in that aspect of the business. So I have filled my board with great sales strategists because they are able to give me ideas and insights about sales that are far beyond anything that I would ever come up with on my own. Not only does this help the business, but it helped me turn the board meeting – which would have been simply a day of me explaining things and reciting things that I already knew – into a huge learning experience. And this different perspective hopefully has me closer to revenue.

Quarterly revisions keep your plans current.One of the reasons that people give for not writing a business plan is that with a start-up, things change all the time. One of the best examples of a business changing is PayPal, which was started as a way to transfer money from PDA to PDA – they never envisioned transferring money on the Web as their business plan when they started out. As Max Levchin, cofounder of Paypal said (as reported in the book Founders at Work):

“Sometime by early 2000, we realized that all these people were trying to use the website for transactions, and the growth of that was actually more impressive than the growth of the handheld device one, which was inexplicable, because the handheld device one was cool and the website was just a demo…. We had the moment of epiphany, and for the next 12 months just iterated like crazy on the website version of the product which is today’s PayPal.”

With quarterly meetings, and quarterly revisions of the plans, I can always make sure that I’m never more than 3 months behind my current thinking.

Budget planning lets you know that you’re not going to run out of money. Although business plans are debatable, budget planning is not. Every business should be run based on a budget, period. This will go a long way to helping you make sure that your expenses don’t overwhelm your profits. And it will help you know when you need to make adjustments.

There are a lot of other benefits to putting together plans for a business, but these are the ones that were the biggest for me coming out of my board meeting. I currently don’t have a formal business plan for any of the businesses that I’m incubating. But I do have written plans that can quickly turn into a formal business plan. So when I’m ready to sell, or take on a new partner, I’ll be ready.

This would have been huge news in my previous life working for Ziff Davis. It will be interesting to see how this changes the IT lead generation industry. With KnowledgeStorm and Bitpipe (TechTarget’s lead gen engine) teaming up, this leaves four major players: the Web Buyer’s Guide (Ziff Davis), IDG Connect, BNET (from CNET) and the KnowledgeStorm/Bitpipe combo.

Prior to this acquisition, KnowledgeStorm was really the only independent IT lead generation option - all the others are tied to a known IT publisher with a large audience. I’m not sure how TechTarget plans to combine the services, but each has something to offer - Bitpipe has the audience and reach, and KnowledgeStorm has an existing client base and superior technology. It will be interesting to see how this shapes up.