Publisher
The person of the issue

35 million rubles to maintain the data base

An interview with the director general of the company Maximov Publishing Andrei Maxomov by Evgeniya Metrusenko.

Andrei Maximov was born on 26 May 1957. After graduating from the faculty of economy of Moscow Lomonosov University he started to work at the Institute of Oriental Studies of the Academy of Sciences of the Soviet Union (now of the Russian Federation). In 1991, Maximov established a publishing and consulting business “East-Consult”, which for 4 years published a monthly digest in English “Soviet Business Intelligence Bulletin”. In 1994, he founded the company Maximov Publications.

In 2009, Maximov Publications celebrates its 15th anniversary. During this time, a huge data base on the Russian companies and top managers had been amassed: 200 thousand people, 23 thousand state organizations, 42 thousand businesses. Yearly, about 30 Russian-English reference books are published, and the data bases are updated. Andrei Maximov tells about his plans in publishing and big-scale projects.

• How did you become the largest publisher of reference books in Russia?

Since long ago I have been working at the Institute of Oriental Studies of the Russian Academy of Sciences as an academic. But in 1991, I realized that there is a significant interest in more practical matters. I started publishing Russian-English digest of business literature of the former USSR with reference books as supplements. The most popular of them were supplements on the state authorities as under the Soviets such information was not available to the broad audiences. At the time the brothers Maxwell were my partners. In 1995, our company released the first reference book “Who Governs the Russian Federation”. At first, it was published twice a year: prior to the government of Evgenii Primakov, government reshuffles had happened often. Later, other reference books on the state authorities were released, such as “Who Governs Moscow”, “Who Governs St Petersburg”, “The Parties and Organizations in Russia”, “The Government of Russia”, “The State Duma of Russia”, “The Local Authorities in Russia”.
Having amassed the data on the authorities, we started publishing reference books on particular industrial segments: “Communications and IT in Russia”, “Transport and Logistics”, “Oil and Energy”, “Ore and Metals”, “TV, Radio, and Press”, “Timber and Paper”, “Food Industry”, “Machines and Equipment” etc. Besides printed versions, we also release reference books on CD and publish calendars with the birthdays of the top managers of various companies and organizations. Today, our series consists of 45 titles. Some think we are a publishing house, but it is not quite correct. Our segment is contact information.

• What are the results of your company in 2008?

On the whole, the results are positive. If not for the ruble devaluation, our sales would have grown 35%. In 2007, the sales amounted to 36 million rubles, in 2008 – to 48 million rubles.

• How the crisis affected your plans?

We have not stopped or suspended our publishing plans. Moreover, for the two first months of 2009, the sales grew year to year 40%: while the demand for the reference books on particular industries has remained stable, that for the reference books on the state organs is growing. In December 2008, the new edition of “Who Governs the RF” was released, and the print-run is already sold out. Currently, the book “The Government of the RF” is in print.
In the autumn, I was pretty sure that the crisis would not affect our company, but I was not right. The economy has become clogged as people delay making decisions and payments. While normally the number of delayed payments does not exceed 20%, now it has reached 35%. Another negative factor is the reduction of an average order - from 12 thousand rubles to 8 thousand rubles: clients used to buy several copies for an office, nowadays most orders are for one copy. Unfortunately, due to the crisis, the projects “The Machine-building Industry and Defense of the RF” and “The Construction and Real Estate in the RF” are not going as smoothly as we had expected. They are realized in the cooperation with the Union of the Machine-builders and the Association of Construction Specialists and we had hoped that large companies would become our advertisers. They do not decline, but delay making decisions.

• How do you update and maintain your data base?

The integrated information data base system is our biggest and the most expensive asset. The cost of maintaining it is about 35 mln rubles a year. On our orders, a special soft was developed which contains all the information and allows for its updating online. Within the integrated data base system, the companies are classified into 4 categories (supercompanies, 1st, 2nd and 3rd categories). The data are constantly updated and the dates of the updating is reflected in the system. 15 editors work on that, each being responsible for a particular industry segment. Depending on the category, the information is updated every 4-12 months. The main method of data collection is by questionnaires, as they are signed by an employee responsible for it within a company which guarantees the reliability of data. Two weeks before the reference book is released, the updated data base goes to set-up. Our main difference from other companies is that we use available data bases only when we start working on the new market segment. Later all information is analyzed, checked and corrected by our specialists.

• Do you guarantee that all companies of a particular segment are included in your data base, or some of them are left out?

First of all, we don’t work with small companies. Secondly, some companies refuse to give information. In this case we decide individually whether to use other sources of information or not. In any case, we always have information on the leading market players. Nowadays companies rarely refuse to share information with us. After all, we have been here for 15 years, and our brand is well-known. On the contrary, it often happens so, that an organization gives more information than we can include in a publication.

• Why do you publish reference books in two formats – A5 and A6?

The book of A6 format costs 3984 rubles and that of A5 format – 5900 rubles. The civil servants prefer to buy the A5 format. The A6 books can be bought wholesale with a discount, the big format books are not discounted. The big format book confirms the status of its owner - that is why it is also a good present to a VIP. The information in the books of both formats is the same, though the print size in A5 is slightly bigger.

• Why your reference books are so expensive?

Because of the high cost of collecting and updating information, as well as of its exclusivity.

• How much time is needed for the preparation of a reference book on a new industry segment?

In order to release a completely new reference book a minimum of 12 months is needed. A new edition of an existing reference book is planned 8 months in advance. A yearly plan of publications is elaborated more than 12 months in advance.

• How the print-run of the publications is planned?

The preliminary sales start about 8 months before the release of the book. Each company covered in the book receives a questionnaire to update its information and a subscription list to subscribe to the edition for a discounted price. The state organs also receive special offers. Having thus collected a certain amount of orders, we then decide what the whole print-run should be. With a 15-year experience, I can always say how many copies would be needed for free distribution. We give books to education establishments, mass media, organizers of professional conferences and exhibitions; partly free copies (as a rule, of the previous editions) are used as promotion material to attract new subscribers. The number of copies we give away declines, though in 2009 it might rise slightly.

• How do you cooperate with mass media?

We don’t have common projects with mass media. The main direction of cooperation is exchange in advertising. We place the logos of the leading publishing houses in our books, while they place the information on our company on their advertising pages. We also work together with exhibitions, although we plan to reduce this type of cooperation.
On the other hand, mass media sometimes become our clients. They buy or rent our data bases for their subscription campaigns. The price of renting (which means that the information can be used only once) is up to 20 ruble for an entry. A bought data base can be used repeatedly and costs 23-39 rubles for an entry depending on the order volume. Once I thought about doing the promotion of the production of our partners in specialized media. It did not work out, partly due to the lack of time, partly because of the insurmountable bureaucratic barriers as most of such media turned out to belong to particular ministries or state institutions.
Now we started to work with the organizers of international exhibitions. In March, we got orders from the Navy Fair in Cannes, the Military Simulators Fair in Brussels and the European Fair on Science and Innovation in Paris. In Russia we already work with almost all larger industry exhibitions and conferences.

• What is the situation with advertising in your publications?

All our publications carry advertising. There are many positions for the ads – the covers, a detachable book mark, the subject heading pages, etc. Next to the direct advertising we offer our clients a whole complex of marketing instruments. Our reference books can be used as corporate gifts. One of the last of such orders was the reference book “Who Governs the Russian Federation” published as a special corporate edition of the “Russian Atom” company. The book starts with the detailed information on the company “Rosatom” with an address by its head Sergei Kirienko. The price of such special corporate edition starts from 6 million rubles (with the print run of 1500 copies).
Our record has been this year as an order came for a 10 million rubles corporate edition (with the print run of 3000 copies). The publishing costs of such orders do not exceed 20%, as the largest part of the money covers the costs of collecting and checking the contact information. One of our novelties is making data bases on the clients’ order by their own criteria. Information can be selected by geography, or the sex and age of persons. Such a data base can exist in a printed or electronic format. About 45% of profit we receive selling books, 10% - selling data bases and the rest – selling advertising and other services. It is difficult to separate advertising money from the corporate editions’ profit as the corporate editions are usually sold with the ads positions.

• How the crisis will affect the advertising?

I don’t think that the volume of advertising will fall dramatically. The main difficult months are January and February, and they have gone by just fine. Obviously, some companies will leave the market, the number of those trying to economize on everything, including advertising, will grow. So, we will have to look for new partners and new ways of working with them. There are still many stable companies on the market, but they have to be found.

• How a decision is usually made to venture into a new segment: does it come as an outside order or you initiate it yourself?

In some cases we go into a new niche as we receive an order for a particular publication from a client company which finances the project. Its costliest part is the formation of a new data base which costs minimum 3 million rubles. In most cases though, we initiate new products ourselves. We still have gaps in some spheres, for instance, in medicine. Though we know the leaders, our attempts to obtain detailed information on this segment’s palyers have failed so far. On the other hand, such segments as the oil and energy or machine-building industries we know very well, and there is a stable demand for the reference books on them. Our aim is to make our projects financially effective, so we choose those industry segments where we can find subscribers and advertisers. In 1998, we were first to go into the communications segment, then there was the oil and transport industries. Less effective were publications on the timber, food and mass media markets, as we could sell fewer advertising there. We have never used funds from the state budgets and thus try to work in the most profitable industry segments.

• Why some reference books are published yearly, while others – once every two years or otherwise?

It depends on the demand for that particular information. In case of the “TV, Radio, and Press” reference book, its print run was bought out before the release, but the buyer asked to delay the release for a year.

• Your books are of high polygraphic quality. Where do you print them?

Until 1998, all books had been published and designed in Oxford. In 1998, all publishing processes were transferred to Russia. The first book published in Russia was simply awful. But during the next 10 years the quality of publishing had gradually improved. Our main partner is the printing house “Rosbalt” in St Petersburg. In Moscow we could not find an adequate partner. The print run of our books vary from 3 to 12 thousand copies depending on the series. Altogether we release 35 thousand copies a year. In Moscow we publish our birthday calendars using the services of several print houses, our main partner being “EZhE”. The print runs of calendars are bigger: 25 thousand copies of the “Authorities and Business”, 5-10 thousand copies of industry calendars. Birthday calendars have been always very popular: they can be used as corporate gifts, contain the useful information on the birthdays of an entire Russian power and business elite and cost much less than books – 885 rubles. Sometime we hear complaints that our products are too expensive, but the thing is we sell not polygraphy but information.

• Who are your competitors?

We don’t have competition as such. There have been attempts to copy the idea, but they lasted only 1-2 years and failed due to the lack of quality information. We have created and updated our data bases for 15 years and, as I had said, it is an expensive thing to do. Thus we don’t have competitors who have worked systematically and effectively in our niche, except maybe for Kompass and “Bisnes-Karta”, but they don’t offer information on the state authorities. Some of our industrial reference books compete with similar products of other companies specializing on that industry. But though it affects our sales, there is only one solution – the stable work, the high quality of information, and the good relations with long-time partners.

• What are your plans for 2009?

In 2009, we publish the reference books “The Government of the RF”, “The Machine-building and Defense Complex of the RF”, “The Construction and Real Estate in the RF”, “Oil and Gas”, and “Fuel and Energy”. We also work on the concept of a reference book “The Union State Russia and Belarus”. On the whole, in 2009 we plan to publish 10 books and 8 calendars.

• The crisis affected the companies with large credit debts most. Did you also use credit money for development?

Our business depends on the season – since our main titles come out at the end of the year, the last 4 months bring in as much as the first 8. Thus, we have to borrow money sometimes to finance the operations. The last such year credit was from Vneshtorgbank and amounted to 2 million rubles. It is not a heavy burden on the business. Recently, the bankers called to inform us about the rise of the credit interest from 16,5% to 19%, it is not pleasant, but not a critical rise for us. On the whole, we have always developed our business using our own means. As a result, our development was not particularly intensive, but in the difficult situation the business has remained stable. The crisis interfered with one promising idea: in January 2009, we planned to launch a mobile access to our data base worldwide. We needed an investment of $ 1 million, with the price for one entry from $5 depending on the volume of information. So far, the plans did not materialize.

• How much does your company cost these days, in your opinion?

Nowadays, it is difficult to state the value of the business objectively, as many assets have been devalued as the result of the crisis, as well as the ruble. Before the crisis I would have been interested in an offer for a part of the business based on the estimation of the whole in the region of $6 million. But today it is hardly appropriate to think about the sale.