B-to-b media companies seek long-awaited growth in a range of industries that remain in flux By Sean Callahan

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When Advanstar Communications' Scott Pierce, exec VP overseeing the company's travel group, heard the airline industry described as a "troubled" sector, he disputed the characterization. "I use the words `in flux,"' he said. ¶ In flux. ¶ It's a phrase that describes the world economy, particularly over the past five years. First, the dot-com bubble burst. Then, 9/11 struck. The terrorist attacks were followed by SARS, the Iraq War, rising oil prices and the tumbling dollar, all of which have roiled the global economy. ¶ In flux. ¶ It's also a phrase that characterizes most vertical markets, whether technology, food and beverage, manufacturing or a host of others. Virtually every discrete industry is grappling with changes that threaten to throw the dominant companies to the mat and crown upstarts as champions. ¶ The construction industry faces a threat in rising interest rates. The once dominant airlines face new, leaner competitors and rising fuel costs. Technology has become, like so many other sectors, a commodity business. ¶ In flux. ¶ And, finally, this phrase aptly depicts the b-to-b media sector serving these various vertical industries. The rise of the Internet and the globalization of industry are transforming this once steady sector that used to derive all its income from print advertising pages.

"Markets are as dynamic as they ever were," said Robert Crosland, managing director at media investment bank AdMedia Partners. "What's changed is that marketing is more dynamic than ever. ... Marketers have more choices than they've ever had, and they'll have more in the future."

So not only are b-to-b media companies struggling with changes in their own industries, which range from the Internet's growing prominence to continually expanding cable TV networks, they're also adapting to changes in the industries they cover.

"They're like sharks: They're either swimming or they're drowning," Crosland said.

The technology market has certainly been in flux over the past five years, with companies going from stock market darlings to perceived commodity providers in many cases.

Marketing messages, in the meantime, have migrated out of print and onto the Web, where upstarts such as CNET Networks and TechTarget have staked a claim to marketing dollars that were once the strict domain of CMP Media, International Data Group and Ziff Davis Media. Those companies, of course, have adapted to this sea change in their industry by building their own successful Web strategies, and IDG has said it expects half its ad revenue to come from online in the future.

In the food and beverage market the changes have been less dramatic but perhaps more widespread, as organic and health foods begin to be carried by mainstream supermarkets. Capitalizing on this trend, Fairchild Publications has done what publishers have always done: created a new magazine. In this case, it's SN Whole Health, a quarterly covering organic and other foods for supermarket executives.

The semiconductor industry once had its undisputed home in Silicon Valley. Now, of course, it's a presence in Taiwan, China and Japan. The major b-to-b publishers in this sector have responded to this rapid globalization with publications such as Reed Business Information's EDN China and CMP Media's joint venture with Global Sources, EE Times Asia.

And globalization goes well beyond the electronic engineering segment and other portions of the tech industry. The construction industry, too, has adjusted to the increasing internationalization of the market. McGraw-Hill Construction, for instance, held a conference in Beijing earlier this year called the Global Construction Summit. The McGraw-Hill Cos. unit also published a building materials product guide that reached 105,000 construction professionals in China.

And to show that everything is most certainly in flux, even U.S. manufacturing seems to be experiencing a recovery. "Barring any sort of major shock to the system, I would say going into next year that, yes, we're confident," said John Royall, a group publisher at Reed Business overseeing logistics and material handling publications.

Of course, a shock to the system is a possibility, because the same two words describe virtually every vertical market, if not the whole global economy: in flux.

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