One Fulfillment Vendor's Challenge with Strategic Change

ARGI convenes a user group to discuss new strategies for a changing media landscape.

By Bill Mickey
Wednesday, November 12, 2008

NEW YORK—In a user-group meeting today convened by ARGI, a fulfillment and database services provider, CEO Ray Butkus and other speakers addressed the changing media landscape and how ARGI planned to adapt along with it. Specifically, as Butkus put it, “evolving from a print subscription fulfillment business to something more reflective of media.”

Tom Kemp, former Penton CEO, managing director of Veronis Suhler Stevenson and now an independent M&A consultant and broker, addressed the group about media company valuations, couched in references to the current economic climate. “The transaction market right now is essentially dead,” he said. “From an investment standpoint, there’s complete paralysis, whether you’re a lender or an investor.”

Publisher budget meetings, Kemp added, are similar expressions in, at the least, market confusion. “Everyone is just trying to figure out what their budget is for next year and it’s like throwing darts against the wall.”

Nevertheless, Kemp went on to note that companies that are fully integrated, multi-channel and serve one sector or a group of strategically related segments are viewed by the investment community as having the greatest value.

Indeed, “fully integrated” and “multi-channel” played recurring roles throughout the discussions. Kerry Smith, CEO of Red 7 Media, publisher of this newsletter, spoke about how his company has followed a plan to capture an increasing share of customer dollars by following a trajectory of cross-platform brand extensions and services—all springing from a base of strong print brands. “The print magazines give us the permission to do all these other things,” he said.

Butkus closed the morning’s talks by addressing how—given the valuation priorities Kemp discussed and the progressive, multi-channel strategies Smith highlighted—he expected his company to evolve to meet the new strategic and tactical needs of the media community. “How does a company like [ours], of modest size, change and adapt?”

He noted that a 2007 client meeting concluded that publishers’ online initiatives were accelerating “perhaps faster than we appreciated.” Since then, Butkus has laid plans to re-align ARGI’s growth with the speed at which his customer base wants to develop.

Key to this change, said Butkus, is a “greenfield” approach, one that doesn’t simply bolt new features on an old system. “Let’s begin with an understanding of what users need to do, not what our current system does and how we adapt it.”

To that end, Butkus envisions a company that still serves the print world, but offers solutions that help publishers thrive in a digital world and accommodate more sophisticated product bundles. Also important, he said, is a faster time to market and “radically simplifying everything,” from sales and marketing to usability to customization.

ARGI, said Butkus, will become more fluent on doing business across multiple channels, not just print subscriptions. “Not that print will go away and not that we don’t see ourselves playing there, but the ability of your business to grow will depend on non-traditional media.”