Tony L. Uphoff, President and CEO — Thomas
Of the wide range of advertising opportunities, marketing services and product data solutions that Thomas offers customers, which do you see as the most promising for innovations, growth and/or revenue in 2019 and beyond?
There are a few things that we’re doing in each of the three areas you referred to that are really driving some fantastic growth. The first is a focus around user experience with a huge emphasis on active registered users. We don’t force anyone to register, but we strongly encourage it as there is a straight-forward value proposition for them in doing so. Thomasnet.com [an online platform for supplier discovery and product sourcing serving industrial / commercial / manufacturing communities in the U.S. and Canada] now has more than 200 filters, such as ISO certification or minority-owned business, that users can unlock when they register. This has enabled us to drive a remarkable synergy between user services and advertising products. Advertising products are integrated via advanced data technology into the user experience.
Industrial buyers, whether they are in engineering or procurement roles – say, someone running the factory floor at a company like Boeing – are really interested in products and services. Advertising is not intrusive when it is highly contextualized; mapped to audience segments or to where users are in the purchasing process. So, driving this engagement among registered users makes it easier to solve advertisers’ challenges. In 2018 we saw more new business growth on the network at Thomasnet.com than we’ve seen in the last ten years. Part of this is that our company is more visible today because we’re doing a better job at reaching out to and engaging prospects and customers with this concept.
But we’ve also expanded the number of advertising options on the network at Thomasnet.com, so we now have a more robust offering, outside of traditional supplier discovery. This has led to explosive growth in our marketing services and across some of these products. Certainly, it’s not new to say that marketing services is a growth category, but we saw a unique level of growth when we engineered user experience and marketing services to work together. Every two seconds someone selects a product or supplier on Thomasnet.com. This huge amount of data fuels our marketing services to better solve the two biggest challenges of all marketers; broad-based discovery online and engagement with users that have a propensity to buy their products and services in volume. We can literally build a website for a customer, manage on-going SEO and create discovery and advertising programs on Thomasnet.com. Anyone can sell marketing services. We’re selling proprietary marketing services based on in-market buyer data from their connection with Thomasnet.com. The marketing business finished up a little over 50% in 2018 and 2019 is off to an equally exciting start.
We call the third area of innovation Product Data Solutions. Thomas has truly pioneered the idea of putting complex product data into the workflow tools that engineers and architects use, such as Computer Assisted Design and Building Information Management. When they download these tools on the Thomas network, on distributor sites and on our advertisers’ sites, they also receive related product data. We help companies create the digital product data, publish it online, syndicate it across their distributors’ sites and promote it across our platforms. And the data can be updated wherever it appears online when product revisions are made by our customers. It’s a relatively complex model that we are getting better at articulating to marketers and it has become a robust business for us.
All of these offerings work together to enable us to say to an advertiser, “Here’s the next product we should offer you because it’s going to drive growth for your company”.
Advancing technology has certainly made it possible for Thomas to offer some new and exciting services.
Yes, a lot is changing. But it’s interesting. I feel fortunate that my career is divided exactly in half between pre- and post-internet eras. I had a lot of success back in the print-centric world. Now I’m part of the generation that is understanding how to scale pure-play internet-based businesses. But having a little bit of history pre-internet has been hugely helpful. One could suggest that my focus on active registered users grows out of what we once called controlled circulation – that’s not exactly a new concept.
It’s instructive at times to look at what isn’t changing. What you see now on the Thomas network is a much more robust content offering that is driving a lot of engagement. But the change is built around the idea of what is never going to change – that busy professionals need a trusted platform to give them actionable information to help them do their jobs and grow their careers. If we’re smart, we can learn to become a daily habit in their world.
What is coming next from Thomas? Are there new products, services or ideas that you are working on, or that might be coming soon?
In October, we rolled out the 3rd level of our WebTrax platform – Thomas WebTrax® 3.0. Thomas WebTrax is a web analytics and sales enablement platform that we have developed and that we give free to advertisers and qualified companies who aren’t advertisers. Imagine a cross between Google Analytics and something that’s more about sales enablement, fine-tuned for the industrial marketplaces. This platform will help them better understand what is happening on Thomasnet.com, what is happening in the CAD programs they are doing with us, and what is happening on their own websites. It will give them the tools and the analytics to understand when to engage their sales forces as they will be able to see in-market buyers engaging and evaluating the market.
There is another area of interest for us that we are very focused on – the power of our data platforms. We are now at 2.5 petabytes of buyer behavior. And that number is constantly growing. We will always use this data to drive our current revenue model, but the next stage for us is building a dedicated data business that actually sells data. We’re seeing demand for our data in two basic market segments. The financial marketplace is interested in it as an early indicator, at the product, commodity and service levels, for making investment and acquisition decisions. And our current advertising customers are starting to want market data for analysis to use around the intersection between sales and marketing. We’re just now starting down this path, so we’ll have more announcements to come later in 2019.
We’re also excited about expanding our video offerings. We’re going to be adding functionality for advertisers – something like the real estate platform, Zillow, deploying similar types of methodologies, but on our industrial platform. We want to bring suppliers alive in videos that allow a buyer to see the supplier and understand the supplier and perhaps tour the supplier in ways that will be really powerful.
I’d like to run down a few challenges that B2B media companies have told us they are facing today and hear which ones you are facing and how you are handling them at Thomas.
We’re probably facing them all (laughs).
Testing and Identifying the best new technologies.
We have reorganized our technology and brought more of it in house. Most everything we do today is controlled internally with a very strong team of developers. Thomas is run like a modern software company and that has been a big shift for us. We must stay very current in terms of new technologies and we’re always evaluating new products and how we might deploy them. We’ve brought in four new internal platforms; a new email platform, a new management system, a new data hub and a new internal project management system. All four of these platforms are new within the last year. I don’t know if I’d really call these changes challenges, but they are things we think about a lot and stay very focused on.
Adapting to increasingly rapid change.
Adapting to rapid change is a big deal. Cultural change is hard. I’ve been involved in a lot of change management, particularly in the second half of my career, and I’ve been super pleased at Thomas. As I have said, we expanded our content, engineered our platforms to work together, added new platforms and brought in a significant amount of new talent last year. I think we have been able to accomplish a lot in a relatively short period of time because Thomas is an organization that is interested in making changes. If you go back thru the history of the company, it has always been an innovator; adjusting and changing its model. Adapting to rapid change is hard, but the real challenge is knowing if we are focused on the things that we need to change. Are we current? Are we staying appropriate with our talent?
Finding and keeping the talent needed.
Of course, it’s necessary to have the right talent around the table. We’ve added positions in development and technology, and we plan to add more. We’ve got two artificial intelligence pilot programs going on in the company right now and a 3rd in what you might consider machine learning. Part of adapting to rapid change is making sure that you are adding people to the team that have experiences that they can bring in and help motivate and accelerate the changes taking place in the company because they have seen it before, they have done it before, and they can help those who haven’t. MG: Competition from outside the B2B media community.
TU: We have competition, but mostly it is really niched-out or very broad-based in terms of general web advertising. It would probably be helpful to have a competitor that we could measure ourselves against. But I think we spend more time focused on the other types of competition for the time and attention of our user base. We think a lot about how we can become a daily habit for the industry so that our platform is always on.
Are there other areas of the business that you, as Chief Executive Officer of Thomas, are particularly interested in?
I talk a lot about the concept of “Jobs to be Done”. How do we follow users where they are going, or in many cases, how do we lead them? What other features and functionalities can we build into our platform that help the user? What are the jobs we still need to do?
There is a fascinating aspect of our business. The network at Thomasnet.com is a two-sided marketplace. You have suppliers and you have users/buyers. But it gets really interesting when you think about how the vast majority of suppliers are also buyers. We see that suppliers are selling, but also sourcing on our platform. We always need to be thinking about how to best serve that complex, two-sided marketplace by continually adding actionable content and useful features.
I am very focused on identifying these types of “Jobs to be Done”. It’s a step-by-step process.
Thank you, Tony!