Reports offer good news, bad news for b-to-b media
By Sean Callahan
B-to-b spending on interactive marketing will more than double in the next five years, jumping from $2.3 billion in 2009 to $4.8 billion in 2014.
That’s the conclusion of “B2B US Interactive Marketing Forecast, 2009-2014,” a report released last week by Forrester Research.
The question is: How much of that interactive spending increase can b-to-b media companies convert into revenue? The Forrester report offers some good news and some bad news for publishers.
The bad news is that paid search accounted for almost 70% of b-to-b online spending last year and will continue near that mark moving forward, according to Forrester. Most of that money will continue to flow to large search engines such as Google and Bing.
The potential good news is Forrester anticipates that online display advertising spending will increase modestly this year, and this arena is one where b-to-b media companies have the ability to generate revenue. “Even with a short-term spending decline in 2009, display advertising will grow faster than any other established interactive category … from 2009 to 2014,” Forrester analyst Michael Greene wrote in the report.
Research firm Outsell released a study on Monday that also offers some good news and bad for b-to-b media companies. For instance, the “Annual Advertising and Marketing Study, 2010,” relates this good news: Total b-to-b marketing and advertising spending will reach $129 billion this year, a slight gain of 0.75% compared with 2009’s dismal performance.
The potentially bad news is that most of this growth will stem from increases in b-to-b interactive spending, which is anticipated to grow 9.2% to $51.5 billion this year. This is only potentially bad news, because some b-to-b media companies may be positioned to generate some revenue from this increase.
For instance, Outsell calculates that b-to-b marketers will spend $26 billion on their company Web sites this year and says b-to-b media companies can generate revenue from this spending.
“We advise publishers to compete to reclaim these [company Web site] dollars by providing marketing services to advertisers and offering more value than the companies get from their own staffs and third-party service providers. Publishers now have, or should have, more expertise than all but the largest advertisers have in both cross-media campaigns and the new online marketing methods and metrics,” Outsell’s Chuck Richard and Sheila King wrote in the report.
Additionally, some areas of interactive spending anticipated to grow are those in which b-to-b media companies have expertise. For example, spending on webinars is anticipated to grow 26% this year. Similarly, spending on virtual trade shows is forecast to grow 11.8%.
While most of the growth in b-to-b marketing spending is in the interactive arena, print and in-person events are showing signs of renewed strength. Although print overall will decline 3.2% this year to $41.0 billion—led down by newspaper display advertising (-7.1%) and print directories (-10.1%)—b-to-b spending on print magazines will increase 1.0%, Outsell predicts.
In-person events spending is projected to fall 1.7% this year to $26.4 billion, with trade shows dipping 1.7% and conferences declining 2.8%.
In more good news for b-to-b media, the Outsell study indicates that b-to-b marketers are believers in the effectiveness of integrated media. Almost two in five (38.6%) of b-to-b marketers said a single media format by itself was “extremely or somewhat effective.” By comparison, 72.5% said multiple formats together were “extremely or somewhat effective.”
Based on these findings, Outsell advises b-to-b publishers to think twice before giving up on print or face-to-face events. “Decisions to abandon the traditional media of print and events build in a loss of effectiveness and ROI for advertisers that will lead them to pay less for the one media offering than the cross-media offering,” the report said.