Management

B2B publishers bullish on 2011 budgets

By Sean Callahan

It's an enigma, a mystery, a paradox.

The uncertainty caused by the downgrade of the U.S.' debt, fear about the financial health of the European Union and the up-and-down stock market seems to portend a macroeconomic decline. Yet most b-to-b media executives—with the exception of those in the construction and real estate sectors—see their own markets as healthy and plan to budget accordingly.

One publishing executive, who spoke on condition of anonymity, summed up the mood among b-to-b media leaders. “I'm terrified of a double-dip recession,” he said, but added that he saw no signs of a slowdown in his industry and planned continued investment in all aspects of his business, including hiring new employees.

“Overall, I'd say we're pretty bullish—in spite of the economy,” said another media executive, Ken Moyes, president of EH Publishing, which publishes Modern Materials Handling through its Peerless Media subsidiary.

A recent survey from Duke University's Fuqua School of Business supports this approach of budgeting for growth. The CMO Survey, conducted online in August with 249 marketing executives responding, found that marketing budgets are expected to increase 9.1% over the next 12 months. Marketing hires are expected to increase 7.2% in the same time period.

“These results show that while executives feel the fear of all the doomsayers operating in financial markets, these same executives are reporting positive performance gains and are spending despite the negative news,” Christine Moorman, director of the survey, said in a statement.

“I conclude that these sources closer to company operations, especially in revenue- and demand-generating activities like marketing, are trying to tell us that market reactions over the past month may be grossly exaggerated.”

A broad future

Reed Business Information's Variety brand is representative of how b-to-b media operations are investing in a broad future, one that encompasses digital, events and data in addition to print.

Neil Stiles, president of the Variety Group, said the brand has committed to providing content via a broad array of devices. That means investing in Variety.com as well as versions of its content for email, smartphones and tablets. “Whenever you buy a subscription to Variety, you can access it whatever way you want it,” Stiles said.

Variety also continues to invest in events. “The conference business is a focus of our investment,” Stiles said. “Our conference business is growing at an alarming rate.” He said Variety plans to produce 25 conferences this year. “We did four in 2009,” he said.

Additionally, Variety continues to build its paid data business, acquiring research firm TVtracker in June. “It's a revenue stream with less cyclicality and more insulation from the economic ups and downs,” Stiles said.

Ed Fitzelle, managing director of Whitestone Communications, said almost all b-to-b media companies are pursuing a similar strategy of diversifying their income streams. “The successful businesses are the ones that are getting away from the old model where you had one dominant source of revenue, which was display advertising,” he said.

“Now, you're still depending on revenue that comes from marketing but moving away from print advertising [alone] and going after smaller revenue opportunities—but more of them. The revenue mix, instead of being one 800-pound gorilla and a lot of little monkeys, is one or two 200-pound gorillas and a lot of 50-pound monkeys.”

Peter Goldstone, president of Atlantic Media Co.'s Government Executive Media Group, may have the most ambitious investment plans in all of b-to-b media. “I was hired March 1 with a real focus to double the business at Government Executive, to focus on the purely b-to-b platform and to really accelerate its growth and double the business, top line and bottom line,” he said.

Goldstone said the Government Executive management team is developing a five-year growth plan. It will start with print and investing “six figures” in the redesign of Government Executive, beginning with the October issue, Goldstone said.

Next, Government Executive will rework its website and its digital approach. Currently, it has a horizontal approach to the federal market, covering news important to executives across Washington, D.C. The brand aims to expand its coverage by delving deeper into verticals, both by audience and by topic. “We're going to "niche the niche' in a lot of different ways,” Goldstone said. He added: “We're investing in content so we can ensure greater engagement with our audience. You can't do that on the cheap.”

Goldstone also plans to continue investing in the Government Business Council, a research business that also supports ad pages. “We are in major growth and investment mode,” he said.

Ziff Davis Enterprise, publisher of eWeek, is also investing in its business. Steve Weitzner, chairman-CEO, said he sees a renewed interest among tech marketers in online display advertising, and his company is working to create new formats for online branding. “From an investment standpoint, we've beefed up our programming staff, and they're spending more time on turning out new products,” he said.

Exceeding expectations

At EH Publishing, Moyes showed the ultimate confidence in b-to-b media last year when he acquired Peerless Media, a group of logistics brands formerly owned by Reed Business Information. “It's very, very solid,” Moyes said of Peerless Media's performance. “It has exceeded our expectations. Their revenues are up 15% or more from when we bought them.”

Moyes is continuing to invest in EH Publishing as a whole. The company has added 10 new positions this year, for a total of about 100 employees, and expects to add 10 to 15 more by December, he said. In addition to investing in digital programs, EH Publishing is expanding one of its trade shows, Worship Facilities Conference & Expo, by adding regional versions.

Bruce Morris, exec VP-managing director of SourceMedia Inc.'s professional services and technology group, said the stock market gyrations in the wake of Standard & Poor's downgrade of the U.S.' debt, haven't affected business. “We haven't seen any cancellations,” he said. “It's pretty much business as usual.” Morris added: “We continue to develop our nonadvertising revenue streams.” Specifically, his division has boosted its research business. The unit conducts research for marketers looking to learn more about their marketplaces. “The beauty of this business is that we're not cannibalizing advertising dollars,” Morris said.

The group is also spending more on creating custom content for marketers. For example, SourceMedia produces a quarterly magazine for TD Ameritrade.

CFE Media, another company comprised of former Reed Business Information publications, said its print revenue is up 15% this year on top of 20% growth in 2010. “Companies are coming back to marketing,” said Jim Langhenry, group publisher at CFE Media.

Langhenry said CFE has invested in more expensive paper for its publications, such as Consulting Specifying Engineer, and in boosting its editorial-to-advertising ratio. CFE is also creating a new event related to Consulting Specifying Engineer, which will debut in the fall. “Sponsorships are going very well,” Langhenry said.

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