Digital to drive b-to-b media growth
By Sean Callahan
VSS Structured Capital Funds
The b-to-b media sector is destined for growth again, according to Veronis Suhler Stevenson's “Communications Industry Forecast” released last week. The report anticipates that the b-to-b media sector will experience a 5.6% compound annual growth rate (CAGR) to $33.29 billion between 2010 and 2015. The sector only grew at a 0.1% CAGR between 2005 and 2010. VSS forecast that e-media, which grew at a 15.6% CAGR between 2005 and 2010, will continue to drive the growth of b-to-b media for the next five years. Hal Greenberg, partner of VSS Structured Capital Funds, spoke with Digital Directions about how e-media is changing b-to-b media.
Digital Directions: B-to-b media is back on the growth path. What is driving this?
Hal Greenberg: It's back on a growth path, but it depends upon what part you're looking at. Certainly, (print) advertising, which had a decent year actually in 2011, in the longer term will still be under considerable stress. But the whole of b-to-b media should grow. Things like the iPad and the tablets will actually be a driving influence. It's still in transition, but the more things are read in tablet form, it will be more interactive than a one-way magazine would be. You'll start to get more creative approaches to advertising broadly speaking than you might if you had just a print property. When you look at things that are online today, there's a lot of video that was obviously never there with a print product.
DD: How has the growth of digital impacted b-to-b media?
Greenberg: If you look at an advertiser like, say, Caterpillar, when you go back a decade or so ago, the only way of reaching their clients was with magazines, trade shows and other kinds of events. That was formulaic for many years. But with the whole advent of the Web, Caterpillar said to itself, “I can reach my customers, and my dealers and the customers of my dealers directly through the Web.” A lot of money has been spent by the Caterpillars of this world on their own website and marketing. Their advertising and promotional dollars are necessarily going down. It's been rejiggered, and a lot of it is being spent in-house, on their website, on lead generation.
DD: To what degree do you see Facebook, LinkedIn and Twitter as threats to traditional b-to-b media.
Greenberg: The question being asked is how do I reach my customer? What's the most effective way? One of the ways is through Facebook, LinkedIn, Twitter and social media. Again it's the allocation of those dollars. When you look at how a company spends money on advertising and marketing promotion, it's been rejiggered and it continues to be rejiggered. There's no one framework that one can point to and say, “Only this works, or this works the best.”