The b-to-b media sector is destined for growth again, according to Veronis Suhler Stevenson's recently released “Communications Industry Forecast.” Hal Greenberg, partner of VSS Structured Capital Funds, recently spoke with Media Business about the outlook for the sector.
Media Business: B-to-b media is back on the growth path. What is driving this? Hal Greenberg: It's back on a growth path, but it depends upon what part you're looking at. Certainly, (print) advertising, which had a decent year actually in 2011, in the longer term will still be under considerable stress. But the whole of b-to-b media should grow. Things like the iPad and the (other) tablets will actually be a driving influence. It's still in transition, but the more things are read in tablet form, it will be more interactive than a one-way magazine would be. You'll start to get more creative approaches to advertising broadly speaking than you might if you had just a print property.
MB: How has the growth of digital impacted b-to-b media?
Greenberg: If you look at an advertiser like, say, Caterpillar, when you go back a decade or so ago, the only way of reaching its clients was with magazines, trade shows and other kinds of events. That was formulaic for many years. But with the whole advent of the Web, Caterpillar said to itself, “I can reach my customers, and my dealers and the customers of my dealers directly through the Web.” A lot of money has been spent by the Caterpillars of this world on their own websites and marketing. Their advertising and promotional dollars aren't necessarily going down. It's been rejiggered, and a lot of it is being spent in-house.