Business-to-business (B2B) media company revenue declined 2.2% in 2008 vs. 2007, but revenue growth in online, live events, and data products helped offset revenue declines for magazines, according to American Business Media's (ABM's) 2009 Media Financial Survey.
The new survey, which attempts to accurately measure today's integrated B2B media model of print, online, data and events, found that overall B2B media company revenue remained above 2006 levels in 2008, primarily because of a 9.9% revenue increase in 2007 over 2006.With regard to profitability, the study found that B2B media company contribution (revenue less operating expenses) declined 7.8% in 2008 vs. 2007, but also remained above 2006 levels in 2008, following a 14.6% contribution increase in 2007 over 2006, observes MarketingCharts.
Online Media Shows Strongest Growth, Magazines Lag
Of the six key B2B media company revenue categories (magazines, custom publishing, data, online, tradeshows and conferences), online revenue showed the strongest growth, increasing 15.1% in 2008 over 2007, and rising at a CAGR of 26.8% from 2006 to 2008.
Magazines were the weakest performers, showing an 8.4% decrease in 2008 vs. 2007 and a decline of 3.9% on a CAGR basis over the three-year period.Online media benefited from the continued shift in ad dollars from magazines to online channels, according to ABM. Online display and search advertising, which accounts for more than 50% of total online revenue, gained 12.4% in 2008 vs. 2007 and grew at a CAGR of 30.7% from 2006 to 2008. At the same, magazine net ad revenue declined 10.2% in 2008 vs. 2007 and fell at a CAGR of -4.9% over the three-year period.
Tradeshows, the third largest revenue stream for B2B media companies behind magazines and online, grew 4.3% in 2008 vs. 2007 and at a CAGR of 25.4% from 2006 to 2008.
Data and conferences also showed robust revenue growth, increasing 7.0% and 9.9%, respectively, in 2008 over 2007 and at CAGRs of 12.3% and 11.3%, from 2006 to 2008.Custom publishing remained relatively flat in 2008 vs. 2007 and across the three-year period, ABM reported.
B2B Media Company Revenue Categories Increase
Except for magazines, all major B2B media company revenue categories increased on a contribution basis in 2008 and across the three-year period from 2006 to 2008. Key magazine operating costs, including ad sales, editorial and production, have not declined in line with revenue, and therefore, have negatively affected magazine contribution, which decreased 26.8% in 2008 vs. 2007 and at a CAGR of -16.5% from 2006 to 2008.
Online contribution showed the strongest growth in profitability, rising 11.6% in 2008 over 2007 and at a 27.5% CAGR from 2006 to 2008. ABM reports that online overtook magazines as the largest component of B2B media company contribution in 2008.Data contribution grew 10.9% in 2008 and at a CAGR of 10.3% from 2006 to 2008.
Tradeshow contribution increased 4.5% in 2008 versus 2008 and rose at a 26.8% CAGR from 2006 to 2008. Conferences and custom publishing also showed contribution growth of 5.9% and 2.7%, respectively, in 2008 over 2007 and at CAGRs of 10.1% and 3.7%, respectively, from 2006 to 2008.
General & Administration (G&A) costs declined (7.0%) in 2008, but remained flat across the three-year period. Operating Profit (contribution less G&A) declined 8.5% in 2008 vs. 2007, but increased at a CAGR of 5.5% from 2006 to 2008.
Q4 Revenues
B2B media companies showed relatively flat revenue in Q408 vs. Q407, as increases in online, data, custom publishing and conference revenue of 28.3%, 15.2%, 8.4% and 100.3%, respectively, offset -9.8% and -18.5% decreases in magazine and tradeshow revenue. Ad dollars continued shifting from print vehicles to online outlets, as magazine net ad revenue declined 15.7% in Q408, while online display and search advertising revenue grew 28.3% quarter-over-quarter.
Tradeshows were hurt by declines in exhibit space sales and attendee revenue to their conference components, ABM reported.
A recent analysis from Outsell also confirms the shift from print to online revenues.
About the survey: The ABM Media Financial Survey covers the three-year period from 2006-2008, as well as Q407 and 2008, and provides the findings of the "Total B2B Media Company," which comprises data from 20 B2B media companies that responded to the survey, including a mix of large, medium and small companies. Data was compiled by Bay Sherman & Craig, LLP/Media Consulting Group. The Jordan, Edmiston Group, Inc. (JEGI) helped create the new survey, analyzed the results, and produced the final report.
