The increase was finally thereâeven if you had to squint to see it. Nonetheless, the miniscule 0.9% boost in b-to-b ad pages in June 2003 compared with a year earlier was seen as a milestone in some quarters. It marked the first time since November 2000 that ad pages had shown any growth at all, according to the Business Information Network figures compiled by TNSâ Competitive Media Reporting.
The fact that ad pages, rather than just ad revenues, are up is significant, industry observers say.
"I think pages are a better indicator of progress or growth than revenue, because you donât know if the rate cards are valid or not," said Hal Greenberg, managing director of media merchant bank Veronis Suhler Stevenson.
"Itâs been a tough two-and-a-half years for our industry, but we do share some cautious optimism for the near future," Gordon Hughes, president-CEO of American Business Media, said in a statement. "We are still comfortable with our projection of 3% growth in ad spending and 1% to 2% growth in ad pages for the year. Weâre also estimating single-digit growth in early 2004."
Reed Phillips, managing partner of media investment bank DeSilva & Phillips, said, "The long-awaited turnaround has finally occurred. We started seeing signs in the first quarter of 2003 that the bleeding was stopping. This is another turning point. The patient is recovering."
Waiting for January numbers
Others were more guarded about the meaning of the ad increase.
"Thatâs like the difference in the price of gas being $1.75 instead of $1.78," said Robert Crosland, managing director of media investment bank AdMedia Partners. "Statistically, itâs not really meaningful. Where weâre going to see increases that might be meaningful is after the new year begins. The January numbers will tell us where weâre going."
Crosland said the first month of 2004 will indicate how marketing budgets, which are being determined now, have been allocated for the year.
Joel Novak, managing director of communications industry investment bank Berkery, Noyes & Co., sees reason to be optimistic for 2004. "I believe there is a silver lining," he said. "Advertising revenues or expenditures are expressions of corporate profits. Corporate profits are rising, although slowly. If that trend will continue, there is great basis for optimism. As corporate profits go up, so will corporate spending for advertising and other investment."
Not all b-to-b market sectors will benefit equallyâand some not at allâfrom a broad rebound in corporate profits.
"Technology and manufacturing have been dragging down the rest of the industry," said Robert Krakoff, chairman-CEO of business media company Advanstar Inc. "When you see lower declines in those sectors, youâll see them start to push the average up."
Of the 12 BIN market sector categories, only six showed gains in ad pages in June 2003 compared with a year earlier. However, a few key categories, such as software and manufacturing, lost pages at a slower rate.
The three largest categories in terms of ad pages all posted gains in Juneâpharmaceuticals and toiletries (0.6%); services, direct response, classifieds (9.0%); and finance, business and advertising (0.7%).
Sectors continue to struggle
First-half data compiled by CMR and released in August show that healthy markets were offset by struggling sectors.
In CMRâs chemicals category, ad pages were off 32.6% in June, with every publication tracked posting double-digit declines. Even certain categories showing overall gains in ad pages had laggards within them. In the food processing category, for example, magazines such as Prepared Foods (up 54.8%) and Food Engineering (up 37%) posted strong ad page gains in June, but Food Product Design was down 11.6%.
Overall, the statistics give the b-to-b media industry some hope, but that optimism is shadowed by lingering doubts. "I think it shows an improving economy," said Veronis Suhlerâs Greenberg. "Weâll see if it really lasts."