CFO Publishing over the next few years,
but something we need to get right,” he
said of acquisitions.
Serving the technology sector, International Data Group has long grappled
with the same issues now facing more traditional b-to-b media companies, specifically: coping with declining print revenue
and ramping up events and digital marketing offerings.
“Print continues to be a
challenge, but we budgeted
it to be down more than it
is, so that’s a good thing,”
said IDG CEO Bob Carrigan.
At the same time, online
spending is increasing,
which is critical for IDG’s
enterprise group in the
U.S., which generates more
than 60% of its revenue from digital. “
Online is really very much back on track.
Last year, online moved down into a single-digit growth rate, which was a bad
year. This year, it’s soaring again,” said
Carrigan, who noted that IDG’s events are
growing, too.
IDG is also investing in many innovative programs in search of new revenue
streams. The company has developed
Amplify, a social media ad unit, and has
rebranded its corporate sales unit as
Strategic Marketing Services. It also helps
technology marketers monitor and react
to social media conversations. In the paid-content arena, it introduced the CIO Executive Council, a paid membership group.
Carrigan still has concerns about the
future, in particular the threat of defla-
tion. “It’s a challenge for customers to
raise prices,” he said. “It puts pressure on
every one of their supply-chain partners,
including media companies that do busi-
ness with them.”
Many more traditional b-to-b media
companies are becoming more like IDG
and increasingly relying on digital rev-
enue to fuel their businesses. Advantage
Business Media is a case in point.
Advantage focuses on the manufactur-
ing sector and has seen its print revenue fall.
“We budgeted down 10% last year, but we
were down about 3%. So
the decline has really
slowed,” said Advantage
CEO Richard Reiff. “At some
point, we think it will stop
dropping and flatten out.
I’m not one to believe that
print is going away, but it
will be smaller.”
On the other hand, digi-
tal revenue is currently
booming at Advantage. Reiff said that so
far digital sales for its new fiscal year,
which began July 1, are about 60% ahead
of last year’s pace. “We expect to be a
50/50 company—50% digital and 50%
print—by June 30, 2011, on an annual ba-
sis,” he said. ;
“At some point, we
think [print revenue]
will stop dropping and
flatten out. I’m not
one to believe that
print is going away,
but it will be smaller.”
Richard Reiff, Advantage CEO
Fragile recovery has publishers wary
Most b-to-b media companies have bounced back this year after a dismal 2009. The consensus is that digi- tal and event revenues are up, and the bleeding of
print revenue has been staunched.
But a number of media executives view the nascent recovery as extremely fragile, and they harbor concerns about the
global economy: Open The New York Timesand there’s Paul
Krugman warning about a potential depression. Look at the
Dow Jones industrial average and see that it plunged more
than 10% in the second quarter. And consider the
Conference Board’s Consumer Confidence Index, which tumbled almost 10 points in June.
It’s enough to make publishers worry about what a double-dip recession could do to the businesses they’ve worked hard
to reconstruct.
Scott McCafferty, founder of WTWH Media, which
publishes Design World, cataloged some of the lingering eco-
nomic difficulties: “Bank lending is too tight. Unemployment
is still high. There’s overall market volatility.”
“It concerns me a great deal,” said Tim Fixmer, president
of Stamats Business Media, which publishes Buildings,
about the health of the broader economy. “It has a psycholog-
ical impact on our advertisers, who are already edgy about
their industry segments. The composite indices have been
fluctuating in recent weeks, and any downward trend can
cause businesspeople to freeze at the switch. This freezes the
dollars needed to fund our ad-based media models.”
“We’re concerned about the manufacturing sector,” said
Richard Reiff, CEO of Advantage Business Media, “but the
people we deal with are right now spending and trying to stay
in the game. If there’s more trouble, I’m afraid they may back
off again and go dark.”
Don Pazour, CEO of Access Intelligence, is concerned that
consumer sentiment might negatively affect the markets his
company serves. “My worry and/or hope revolves around con-
sumer spending and confidence—and when housing will pick
up sufficiently and joblessness will drop sufficiently that the
consumer again begins to put some oomph in the economy,”
he said. “We are in various markets—print and cable media,
satellite, aviation and defense, chemical, energy, etc.—all of
which have somewhat different characteristics, but all of
which benefit from a robust U.S. economy.”
Even publishers in sectors considered somewhat sheltered
from economic fluctuations are worried about another down-
turn. Charles McCurdy, CEO of Canon Communications, said:
“Canon’s core sector served is medical manufacturing, which
continues to show less cyclicality than many sectors. That
said, capacity expansion does drive marketing spend, and a
dramatic retightening of credit in North America and Europe
could slow down our business.” —S.C.
