The US B2B media sector continues to be pummelled by severe declines in print advertising — ad pages plummeted 29% and ad revenue 24% in 2009 — accompanied last year by softness in live events as well (-16%), according to American Business Media’s Business Information Network (BIN) tracking service. Karlene Lukovitz takes up the story.
Burdened with debt and under pressure from equity owners or stockholders, restructurings and / or bankruptcy filings are commonplace (Advanstar, Cygnus, Penton and Questex, to name a few).
Not surprisingly, the continuing declines in traditional revenue streams, combined with rising postal and other costs, are causing many companies to accelerate implementation of new models that are not only more digitally-based but less advertising-reliant.
For some large companies, the mandate is essentially to get out of print, and presumably use the proceeds to fund more profitable businesses. Reed Elsevier’s recent shuttering of 23 Reed Business Information (RBI) titles – retaining only Variety and a few vertical online lead-generation and research properties — was anticlimactic after a prolonged, much-in-the-news sell-off process, but it was nonetheless a watershed. (Think about the fact that RBI, a formidable player less than a decade ago, was unable to sell more than 20 brands, regardless of whatever digital assets had been developed in association with the print properties.)
Nielsen, likewise, reportedly plans to shed all but a few print properties, and the UK’s own United Business Media folded 31 magazines last year, some US-based.
Folio:’s recent survey of B2B CEOs found print advertising accounting on average for 52.4% of total revenue in 2009, and projected at 47.5% this year — the first time print has fallen below 50%. Paid subs revenue is expected to decline 5.4%, to a 7% share.
Live events are projected to take an upturn (rising 8.2%, to 10.6% of total). But the real action is in “e-media” (27.7% projected growth, to hit 16.6% of total, with e-media encompassing online events and some paid content, as well as online advertising). Other hot spots are data information sales (18.2% projected growth, to 2.6% of total) and custom publishing (4.8% projected growth, to 8.8% of total).
In recent years, recognition that B2B print advertising wasn’t going to rebound to anywhere near heyday levels, even with improved economic conditions, was replaced by optimism based on a period of dominance in vertical online advertising. (Although online CPM’s have never approached those of print.) But search engines have increasingly cut into that stream: BIN members’ digital ad revenue actually declined 3% in 2009’s first half (BIN has now merged print, digital and events tracking).
Bottom line: Companies of all sizes must focus on developing revenue opportunities carefully chosen to leverage their core strengths, starting with vertical market expertise. Obvious, perhaps, but much easier said than done. As Jordan, Edmiston Group managing director Richard Mead recently pointed out in BtoB Media Business, significant (hard to obtain) capital will be required to deliver the market-specific content value and increasingly compelling online models needed to compete with agile competitors “unburdened by legacy media assets”.
In Mead’s estimation, publishers’ long-term viability will hinge on fully integrated media approaches with one or more websites at their core that “bind their communities to them as the source of marketing intelligence about the industries they serve.”
Hence the growing urgency to at last achieve database capabilities that enable cumulative, piece-by-piece collection and true integration of all customer data elements (email addresses, demographics, every transaction / touchpoint). This is the foundation for communicating and cross-marketing on an individualized, event-triggered basis that is highly effective because it reflects users’ true interests / needs. (As opposed to bludgeoning certain audience segments with offers that may well be irrelevant / unwelcome, simply because they happen to have provided the profile qualifiers deemed most critical by advertisers, the events division, etc).
Two examples of database-driven lifecycle marketing models: UBM Global Trade’s Journal of Commerce, which is moving to a primarily digital paid-content / membership package model; and Ziff Davis Enterprise, which provides marketers with cross-platform access to highly targeted prospects who have qualified themselves in return for free, valued content.
Obviously, print remains an important component in many markets, at present. However, given print’s deteriorating ROI, the iPad and other increasingly user-friendly digital devices seem ultimately much more an opportunity than a threat to B2Bs’ bottom lines, hopefully representing a cheaper content delivery platform that is also more compelling to digitally-focused advertisers / content sponsors.
Indeed, for all of the numerous challenges confronting B2Bs, those focused on relevant, valued content, along with integration of data and media platforms — including newer ones like social media and mobile — are achieving, or on their way to, profitable new models. While some caution that the keys to monetizing social media remain to be uncovered, consultancy AMR International recently projected that B2B advertising spend on social media and lead generation sites will grow at average annual rates of 21% and 17%, respectively, through 2013.
In short, as with any transformative process, the B2B transition continues to be both excruciating and exhilarating.