The closures and mergers of these publications illuminate two related trends in b-to-b media.
On a micro level, every publication that isn't the clear leader in its market faces a tough challenge to attract advertising dollars.
On a macro level, large companies—especially large, publicly traded companies—are shedding their trade publishing units because of the cyclicality associated with advertising-supported products and overall diminished revenues in b-to-b.
Industry observers say most markets will eventually be served by only one or two trade publications and that the No. 3, No. 4 and No. 5 magazines will go under. For example, in tech, which has tended to presage traditional b-to-b publishing by about five years, CRN is the only print title still serving the reseller market.
“There's far too much inventory, far too many print publications for the spending going into them,” said Chuck Richard, VP-lead analyst at Outsell.
“I think in most cases, media buyers are only buying one or two publications,” said Kevin Arsham, partner-communications planning director at MediaCom.
Caroline Riby, VP-media director at Roberts Communications, said b-to-b marketers that were investing in a number of media—print, online, conference, webcasts—determined they could get better deals by consolidating those buys with a single strong brand. “All of the money isn't going into one medium anymore,” she said.
Declining industries may see their trade publications disappear even faster. Editor & Publisher had published for 125 years, but even its storied past couldn't change the fact that fewer advertisers were trying to reach newspaper publishing companies, which have been reeling.
Similarly, the decline in the machine tools market mortally wounded American Machinist's print edition, which first appeared in 1877.
“It is sad when an icon like American Machinist stops its print version,” said John Dobbs, senior VP at GyroHSR, whose client, Makino, serves the machine tool industry.
In a memo to staffers, John DiPaolo, VP-group publisher at Penton, said the decision to close the print American Machinist was “a direct result of a very difficult economic climate, the impact the recession has had on capital equipment purchases such as machine tools, the consolidation of major companies in the welding market and the print ad page declines we have seen for quite some time in the metalworking and welding market.”
American Machinist had just 193.11 ad pages in 2009, compared with chief competitor Modern Machine Shop's 968.20 ad pages, according to IMS. American Machinist will continue to have a Web presence, but Modern Machine Shop will have both a monthly print magazine and a Web site.
Richard said Outsell's research indicates, “Print is a good booster for your digital advertising. That cross-media effect is real.”
Nonetheless, as print advertising continues to decline—Outsell estimates it will account for 24.4% of b-to-b media company revenue by 2014; it accounted for 54.9% in 2003—it is not being fully replaced by electronic revenue. B-to-b media is a diminished business, and public companies that depend on growth are looking to shed ad-supported business publications.
McGraw-Hill Co.'s sale of BusinessWeek, Reed Elsevier's sale of its Reed Business Information US trade publications and Nielsen Co.'s sale of The Hollywood Reporter and other titles are all part of this trend.
While the trend in the 1990s and early 2000s was for larger companies and well-heeled private equity funds to “roll up” groups of trade publications, now smaller companies and smaller-scale funds are acquiring b-to-b media properties. NewBay Media, for instance, acquired Broadcasting & Cable from Reed Business Information, and private equity-backed e5 Media acquired The Hollywood Reporter and other publications from Nielsen Business Media.
Small is definitely big these days.
Riby noted that Thomas Publishing Co. sold IEN, an industrial product tabloid, to members of its management team. The ability of that team to turn a profit with the magazine is being watched closely, she said.
Similarly, Dobbs pondered the notion that smaller companies, which by their nature are nimbler than larger companies, might be more effective owners of business media in these turbulent, fast-changing times.
“The Kline family, which owns Gardner Publications and publishes several properties including Modern Machine Shop, is entrepreneurial by nature,” Dobbs said.
“The management team knows both the publishing industry and the machine tool industry. They go into manufacturing plants and talk to the managers and operators so they have a true sense of who the reader is and who the advertiser is targeting.”