BtoB

Online gives big lift to overall ad spending

By Published on .

Most Popular
B-to-b media ad spending is expected to accelerate through 2009, according to Veronis Suhler Stevenson’s 19th Annual Communications Industry Forecast & Report, released last month.

Total b-to-b media spending will increase 5.8% on a compound annual basis from 2004 to 2009, when it will reach $27.68 billion, the investment bank forecast.

“B-to-b media spending has recovered and is growing again after a few years of getting hit pretty hard during the recession and post-Sept. 11,” said Tom Kemp, managing director at Veronis Suhler Stevenson.

Spending totaled $20.91 billion in 2004 and is expected to grow 5.9% to $22.14 billion this year, driven primarily by an expected 6.1% increase in trade show spending and a 26.5% increase in e-media spending.

E-media will continue to grow, fueled in part by b-to-b media companies’ increased use of search marketing.

“Growth will be driven in part by traditional publishers’ continued push to create new revenue streams through the Internet, as well as b-to-b media companies’ adoption of a more customized and consultative approach to selling advertising and trade show space,” according to the report.

Veronis Suhler also noted that expanded corporate travel budgets and the availability of low-cost airfares contributed to the increase in trade show spending. However, the blue-sky view of event spending is not absolute.

“Overall we feel there has been a solid if not spectacular recovery in the trade show industry, but it hasn’t been across the board and it’s not lifting all boats,” Kemp said. “There has been a bifurcation of the trade show industry.”

One example is the IT industry. “They were devastated and severely affected by the recession in the IT industry as well as post-9/11, but we’ve really not seen any recovery either with trade shows serving that industry or the launch of new shows,” Kemp said.

Meanwhile, print will continue to struggle as online media proliferate and continue to drain ad dollars from the traditional media.

After two straight years of double-digit declines in magazine advertising in 2001 and 2002 (-15.8% and -13.3%, respectively) and a comparatively flat 2003 (-0.2%), b-to-b print advertising spending has improved marginally, rising 3.4% in 2004.

Traditional publishers that manage to evolve into multimedia content providers will be in better shape than those that stick to print, he added.

“B-to-b companies that aren’t migrating their business in that direction are going to severely lag in the market,” he said. “If you are simply a print publisher, you’ll limit growth rates, your margins, your usefulness, and importance to both users and marketers in those industries you serve. You run the risk of marginalizing yourself as an information provider. Most companies and executives understand that. I think the successful execution of that is more limited.”
In this article: