BtoB

BIN numbers way down; can print bounce back?

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The pace of b-to-b print advertising pages' decline is accelerating, according to the latest Business Information Network figures released by American Business Media.

Ad pages declined 33.06% in March compared with March 2008, according to BIN. In February pages fell 31.54% after dropping 26.95% in January. For the first quarter, pages plunged 29.70%.

“The magnitude of 30% gets your attention,” said Ed Fitzelle, managing director of Whitestone Communications.

“I think it's a fairly strong warning sign,” agreed Mike Parker, managing director of AdMedia Partners. “It's compounded by two obvious factors: first, by the transformation that so many companies are going through to digital and also by the state of the economy.”

While the digital transformation is clearly hurting print advertising pages, many industry observers say the overall health of the economy—specifically the decline in corporate profits—accounts for the lion's share of the decline.

ABM President-CEO Gordon T. Hughes II noted that digital revenue for the organization's member companies is only growing at a 10% rate in the current climate, not enough to account for the steep drop in ad pages. He places most of the blame on the fall in corporate profits. “The problem is the economy is hideous,” he said.

An examination of the BIN numbers since 2001 seems to support the interpretation that print ad pages are most affected by economic conditions. The number of ad pages declined sharply during economic slumps: Pages were down 19.69% in 2001 and 15.00% in 2002.

In the six years of economic expansion between 2003 and 2008, pages were up in half the years and down in the other half, but never more than single digits either way.

Parker pointed out that the Publishers Information Bureau figures compiled by the Magazine Publishers of America show the same general trends in consumer print magazines. Between 2003 and 2007, ad pages never declined by more than 0.1% and never grew by more than 3.4%. In 2008, however, the slide steepened, with pages falling 11.7%. In the first quarter of 2009, consumer print ad pages fell 25.9%—very similar to the drop in b-to-b ad pages.

Newspapers have also shown a similar pattern. During the recession of 2001, newspaper advertising revenue declined 9.0% but showed modest growth and contraction between 2002 and 2006. Impacted heavily by a decline in classified advertising, which has significantly less effect on b-to-b and consumer magazines, newspaper ad revenue showed steep drops in 2007 (-9.4%), 2008 (-17.7%) and in the first quarter of this year (-29.70%).

Media buyers say they still support b-to-b print advertising. “I'm not burying my head in the sand,” said Frannie Danzinger, senior VP-media at advertising agency GyroHSR, “but it's hard for me to imagine a world without print. I can't imagine that, but I do think there will be much less than there is now.”

Media buyers, publishers and industry observers harbor no illusions that print will bounce back to where it was before the recession hit.

“I don't think budgets will come roaring back to advertising the way they have in the past. The transition to digital has been more accelerated by this recession,” said Jeff Dearth, partner at media investment bank DeSilva & Phillips. “As budgets come back, I expect print dollars will increase, but digital dollars will increase more quickly.”

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