Financial report may not reflect current conditions

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Data from the ABM Financial Trend Report, 2005-2007, produced by Jordan, Edmiston Group Inc. and presented Monday at ABM's Top Management Meeting, reflect a world as it was before September, said William Pollak, CEO of Incisive Media-North America. “The world changed for us, and I think a lot of the other larger media companies, after Lehman Brothers,” Pollak said, referring to the mid-September collapse of the investment bank. “We're seeing advertisers pull back from contracts they've signed for fourth-quarter advertising, cancelling or moving [advertising] into the first quarter of 2009, in numbers most of us have never seen before.” Pollak added that some trade show organizers have told him exhibitors are walking away from deposits when it's time to pay the balance—an unprecedented and worrisome signal. The session's other media company executive, Greg Watt, president-CEO of WATT, made a similar observation. “There's a lot of fear in the marketplace,” he said. “We saw a tremendous falloff starting in mid-September.” Noting there are many differences in the markets served by b-to-b media companies, Watt added, “Our experiences are very much like Bill's in [the latter months of] 2008.” Ellis Booker, editor of BtoB and Media Business, who moderated the session, asked Pollak and Watt if they thought the b-to-b media business would return to its 2007 dynamics when the economy recovered or if the industry was at a “tipping point.” “We've all gone through cycles before, but the market never comes back exactly to the way it was,” Watt said. “But we see the shift to digital as a bright spot. Also, we have been going after more of [our customers'] marketing communications budgets during the past 16 months. In fact, we are starting a company within the company to concentrate on custom media.” Among the notable findings of the JEGI report, compiled from more than 120 ABM member companies over the past three years, is that while print revenue declined in 2007, print expenses decreased as well, resulting in increased yields. Of the total contribution from all reported media sources, print's share was 66% in 2007, off by one to two basis points versus 2006 and 2005 but still the industry's primary profit contributor, according to the report. The contribution from digital channels was up four basis points over 2006 to 15% in 2007. “Overall, there is a better understanding out there, thanks to ABM and others, that magazines continue to play a central role serving business-to-business communities,” said Richard Mead, JEGI managing director. M
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