Publishers bet big on digital, events and paid content, as print continues to languish
Last year hit most business media companies in the same way—hard, with an industrywide print ad page decline of almost 30% topping a long list of pain points.
This year, as publishers revise budgets for the second half and begin to look ahead to 2011, they are experiencing the recovery in similar ways. At most companies, print is still in decline, although the freefall has ended. Digital and event revenues are up, sharply in some cases, and it's in these growth areas that most companies are investing this year and next.
Many b-to-b media companies are also setting aside funds to experiment with paid content and research as a means to extract revenue from end-users.
WTWH Media, which is based in Manhattan Beach, Calif., and publishes Design World, is typical of many companies in the current environment. Moving well beyond print, it operates with an understanding that a traditional business media company is no longer an automatic first choice for b-to-b marketers.
“I believe that a marketer's dollars are invested in social media, online development, SEO, Google AdWords first—and then they explore b-to-b media outlets,” said Scott McCafferty, WTWH managing director.
McCafferty and Associate Publisher Mike Emich continue to evolve WTWH with this belief in mind, focusing on delivering such marketing services as lead-generation programs. “We see continued growth in custom Web development combined with integrated media programs that deliver ROI goals,” McCafferty said. “Online continues to be our market driver.”
WTWH has hired five people in recent months with an eye on investing in custom Web development, infrastructure, online editorial and video. At the same time, McCafferty said, the company is still investing in print. “Our print titles have experienced significant gains due to maintaining high quality standards in paper and circulation, with 100% qualified first year,” he said.
CFO Publishing, which publishes CFO magazine, has an outlook that resembles that of many other business media companies. The company was created to acquire a majority stake in the CFO brand from the Economist Group earlier this year.
Competition is coming “from all sides,” said CFO Publishing President-CEO Frank Quigley. Nonetheless, he's guardedly optimistic. “We'll finish up a few percentage points in 2010, compared to the previous year's revenue. That's an all-in estimate and will take a lot of focus to get there,” he said.
CFO Publishing's print revenue is down only 1% so far this year, while digital has seen a double-digit increase and events, a single-digit gain, Quigley said. “We are seeing the Big 4 accounting firms begin to come back after a long absence from outbound marketing,” he said.
Looking ahead to next year, Quigley said he plans to invest in many areas, including paid content. “Our "Audit Fee Report' was introduced in April, selling for $1,200,” he said. “We'll do well by year-end. We're estimating a six-figure gross. That was a beta and set the stage for rolling out more data reports and benchmarks for corporate finance.”
CFO Publishing also intends to expand its conferences. “We think that narrower-topic, daylong or half-day venues might be attractive,” Quigley said. “For the CFOs, the consideration isn't how much the conference registration costs them but how much time they must give up to attend.”
Quigley said the company will also invest in a content management system, improving its reader database and, possibly, acquisitions. “This will be an active area for CFO Publishing over the next few years, but something we need to get right,” he said of acquisitions.
Serving the technology sector, International Data Group has long grappled with the same issues now facing more traditional b-to-b media companies, specifically: coping with declining print revenue and ramping up events and digital marketing offerings.
“Print continues to be a challenge, but we budgeted it to be down more than it is, so that's a good thing,” said IDG CEO Bob Carrigan.
At the same time, online spending is increasing, which is critical for IDG's enterprise group in the U.S., which generates more than 60% of its revenue from digital. “Online is really very much back on track. Last year, online moved down into a single-digit growth rate, which was a bad year. This year, it's soaring again,” said Carrigan, who noted that IDG's events are growing, too.
IDG is also investing in many innovative programs in search of new revenue streams. The company has developed Amplify, a social media ad unit, and has rebranded its corporate sales unit as Strategic Marketing Services. It also helps technology marketers monitor and react to social media conversations. In the paid-content arena, it introduced the CIO Executive Council, a paid membership group.
Carrigan still has concerns about the future, in particular the threat of deflation. “It's a challenge for customers to raise prices,” he said. “It puts pressure on every one of their supply-chain partners, including media companies that do business with them.”
Many more traditional b-to-b media companies are becoming more like IDG and increasingly relying on digital revenue to fuel their businesses. Advantage Business Media is a case in point.
Advantage focuses on the manufacturing sector and has seen its print revenue fall. “We budgeted down 10% last year, but we were down about 3%. So the decline has really slowed,” said Advantage CEO Richard Reiff. “At some point, we think it will stop dropping and flatten out. I'm not one to believe that print is going away, but it will be smaller.”
On the other hand, digital revenue is currently booming at Advantage. Reiff said that so far digital sales for its new fiscal year, which began July 1, are about 60% ahead of last year's pace. “We expect to be a 50/50 company—50% digital and 50% print—by June 30, 2011, on an annual basis,” he said. M