BtoB Media Business - September 2010 - (Page 4)

Upfront BY SEAN CALLAHAN “There’s more of a transition taking place in b-to-b media than I’ve ever seen before.” Reed Phillips, managing partner, DeSilva & Phillips Page 7 Study: Marketers to cut print, boost social More than two-thirds of b-to-b marketers plan to decrease spending on print advertising in the next “two to three years,” according to the recently released “B-to-B Marketing Leadership Study.” On the other hand, the same study found that 67% of b-to-b marketers plan to increase spending on social media in the same time frame. Additionally, 64% said they planned to boost digital spending. The study was conducted jointly by American Business Media, the Association of National Advertisers and consulting firm Booz & Co. The research is part of ABM’s strategic plan, which calls on the organization to work with other associations in the “media and information services ecosystem.” One of the specific goals of this research is to help b-to-b media companies grow their businesses in this time of transformation of the industry. The study was conducted online earlier this year and included the responses of 132 marketing executives in such industries as energy, manufacturing and technology. Marketers such as Con-Agra, FedEx Corp., IBM Corp. and Siemens participated in the study. ABM said 71% of the respondents were from the services sector and 29% from the manufacturing sector. A previous ABM study, known as the ABM/Booz study, developed the theory that most b-to-b media companies should choose between two paths to generating revenue: Marketer-driven solutions involve b-to-b media companies in generating most of their revenue from advertisers, while end userdriven solutions create revenue by charging end-users for access to information. The “B-to-B Marketing Leadership Study” is aimed at b-to-b media companies following the marketer-driven solutions path. The report shows that print advertising revenue is not a growth area for b-to-b media companies, but the research also indicated that there are areas where marketers are increasing their budgets. Matt Egol, a Booz & Co. partner who led the research, identified several places where those intersected with the services offered by b-to-b media companies. In the study, b-to-b marketers identified a handful of marketing objectives that Egol believes fit well with the offerings of b-to-b media companies. In particular, 87% of study respondents agreed or strongly agreed that “building deeper insights into their client base” was an important marketing objective. A large percentage of marketers also agreed that the following were important objectives: ■ Developing custom content (82%). ■ Building client contacts for business development (76%). ■ Engaging regularly with clients to build relationships (74%). Egol said b-to-b media companies are well-positioned to help marketers achieve these objectives. The study found that marketers identifying themselves as leaders in b-to-b marketing are moving into digital efforts faster than self-identified laggards. For instance, 78% of marketing leaders agreed that developing innovative marketing activities around e-platforms was an important objective, while 53% of nonleaders agreed. Similarly, 57% of marketing leaders agreed that engaging with clients via social media was important, but just 41% of nonleaders agreed. pated to reach $4.78 billion, an 8.7% increase over 2009. By 2014, e-media spending should reach $8.03 billion on a CAGR of 12.8% from 2009 to 2014. VSS is also bullish on trade shows, which is fitting for a firm that is heavily invested in Advanstar, itself a large producer of such exhibitions as the MAGIC fashion industry shows. Although the exhibitions and conferences sector is expected to decline 3.0% to $12.36 billion this year, it will return to growth next year, VSS predicted. It anticipates that trade show spending will reach $15.63 billion by 2014, on CAGR of 4.2%. Overall, VSS predicted that b-to-b media will increase by a CAGR of 3.5% between 2010 and 2014, which would lift industry spending to $30.01 billion in 2014. Even with that steady growth, it will be barely enough over the next five years to erase the devastation that the 2009 recession wreaked on the b-to-b media sector. VSS said overall b-to-b media spending will not reach 2008 levels until 2014. B-to-b media industry continues transformation BY SEAN CALLAHAN By 2013, b-to-b e-media spending will surpass b-to-b print spending, according to Veronis Suhler Stevenson’s “Communications Industry Forecast 2004-2014.” That forecast by the New York-based private equity firm is just one indication of the changes awaiting the b-to-b media sector, changes that have been set in motion by the rise of the Internet over the past 15 years. The next five years in b-to-b media, according to VSS, will see a continuation of these changes: the solidification of trade shows as the largest segment of this sector, the rapid growth of e-media spending and the longterm decline of print advertising. “I think it’s pretty much what people would have assumed,” said Hal Greenberg, partner at VSS Structured Capital Funds. “Certainly, I think most people assumed there will be a continued decline in [print] advertising.” The VSS report anticipates that b-to-b print spending will decline 11.2% to $7.22 billion this year. Between 2009 and 2014, print spending will continue to drop at a compound annual rate of 4.8%. By 2014, print spending will plummet to $6.36 billion, down from $10.34 billion in 2004, VSS predicted. The decline in spending will be due in part to the closure of underperforming magazines across a number of industry verticals. “Where there were maybe three or four titles in any given market, there are probably only one or two that are viable,” Greenberg said. E-media will continue to grow, according to the “Communications Industry Forecast.” This year, e-media spending is antici- 4 | Media Business | September 2010 | mediabusinessonline.com http://www.mediabusinessonline.com

Table of Contents for the Digital Edition of BtoB Media Business - September 2010

BtoB Media Business - September 2010
Contents
ABM/ANA Study Looks at Marketers’ Plans
Forecast Uncertain for B-to-B Media M&A Activity
New Delivery Channels Help Boost Revenue
Sales & Marketing
Audience Development
Events
Production
People
Benchmarks
Lessons to be Learned From General Patton

BtoB Media Business - September 2010