Technology publishing ad pages continue their slump, with computer ad pages down 12.7% in the first quarter compared with a year earlier and software ad pages down 11.2%. But certain niches of information technology publishing are beginning to show some gains.
The tech publications showing an upturn fall into three general categories. First are the channel publications, such as CMP Mediaâs VAR Business and CRN. Second are the recently launched alternative publications, such as Ziff Davis Media Inc.âs Baseline and CIO Insight, both of which have smaller circulations, thus lower ad prices, than traditional IT giants. And third are publications such as Specialized Systems Consultants Inc.âs Linux Journal and Sy-Con Mediaâs Web Services Journal, which cover hot technology areas.
The isolated increases are spawning a mixture of skepticism and guarded optimism.
"I would love to say that maybe thereâs an incipient rebound, but thatâs probably reading too much into it," said Seth Alpert, managing director of media investment bank AdMedia Partners.
Jeffrey Dearth, partner at media investment bank DeSilva & Phillips Inc., said, "I think after a couple of lousy years, any kind of improvement is âIâve been down so long it looks like up to me."
Knocking on wood
Dan Dignam, VAR Business associate publisher, said he was enjoying the gains but wasnât sure how long they would last. "Iâm knocking on wood as we speak," he said. VAR Business gained 45.3 ad pages, an 8.5% increase, in the first five months of this year, compared with the same period last year, according to IMS/The Auditor. Dignam said he sees that momentum continuing, with June up about 20% in revenue and July up about 50%.
CRN showed similar gains through the first five months of the year: up 58 ad pages, a 6.2% gain, over the same period in 2002.
Dignam said he sees the gains coming, in part, from the surging market for white boxes, which enable resellers to customize computers for businesses. Even Dell Computer Corp., whose direct model bypasses the channel, has bought ad pages in channel publications. "When Dell has ad pages in CRN and VAR Business, you know that manufacturers have got channel religion," Dignam said.
CRN Publisher Lisa MacKenzie agreed. "Manufacturers want to get as close to the sale as possible," she said. "The channel in a down market tends to be a very hot target."
CRN and VAR Business also are benefiting from a shakeout that has been absent from other areas of tech publishing. The demise of former competitors, such as Sm@rt Reseller (Ziff Davis) and Solutions Integrator (International Data Group), has left the market in CMPâs hands.
The channel may be particularly important due to the complexity of IT projects. "ERP [enterprise resource planning] and CRM [customer relationship management] canât be delivered over the Internet the way a beige box can," said Sam Whitmore, editor of mediasurvey.com. "The companies that are out there trying to solve business problems are relying on the channel more than ever. That has helped CMP tremendously."
Like CMPâs channel titles, Ziff Davisâ Baseline and CIO Insight are recording gains in ad pages. For the first five months of 2003, Baseline had 75 more ad pages, an increase of 56.6% from the same period last year, according to IMS/The Auditor. In the same timeframe, CIO Insight increased its ad page count by 39, or 25.4%.
Industry observers say Baseline and CIO Insight are gaining ad pages not because of the market they cover but because of how they cover it and how they have positioned themselves against competitors.
Sloan Seymour, senior VP of Ziff Davisâ enterprise group, said the approach of the two magazines is simple: "We focus on (a) the target, (b) the editorial and (c) the circulation." The target for both publications is top IT decision-makers. The editorial focuses, particularly in the case of Baseline, on detailed case studies. "Technology buyers arenât making decisions without making sure that the stuff has worked for someone else," Seymour said.
The circulation takes a less-is-more approach. For example, Baselineâs circulation is 125,000, compared to Ziff-Davisâ eWeekâs circulation of about 400,000. CIO Insightâs circulation is 50,000.
Lower circ equals lower rates
"Apart from their editorial prowess, both CIO Insight and Baseline have cheaper ad pages, because their circulations are low. And that works today in the marketplace," Whitmore said.
Linux Journal and Web Services Journal also have relatively small circulations, but that doesnât explain their increased ad pages. Web Services Journalâs ad pages were up 21.5 pages to 49.5 in the first quarter of this year, compared with the same period last year, and Linux Journal was up 6.43 ad pages to 148.33.
Both gains are attributed to their markets: They cover two of the hottest tech topics for businesses looking to save money on IT expenses. Linux bypasses expensive licensing fees, and Web services promise to link legacy systems inexpensively.