Growth in Non-print Products Helps to Offset B-to-B Revenue Decline
Revenue growth in online, live events and data products helped to offset declines in business-to-business (b-to-b) magazine revenue in 2008, according to American Business Media’s (ABM) 2009 Media Financial Survey.
Among the 20 companies that participated in the survey, b-to-b revenue dropped 2.2 percent in 2008 versus 2007. Profitability declined even further: B-to-b media company contribution (revenue less operating expenses) dropped 7.8 percent. The 2008 revenue and profitability figures, however, remain above 2006 figures, due to large gains in 2007.
Despite the overall revenue decline in 2008, several key revenue categories showed significant gains, according to the study.
Online revenue showed the strongest growth, up 15.1 percent in 2008 over 2007, and rising at a compound annual growth rate (CAGR) of 26.8 percent from 2006 to 2008. Online display and search advertising, which accounts for more than 50-percent of total online revenue, gained 12.4 percent in 2008 and grew at a CAGR of 30.7 percent since 2006.
Trade shows, the third-largest revenue stream for b-to-b publishers, behind magazines and online, grew 4.3 percent in 2008, among those companies participating in the study, and at a CAGR of 25.4 percent from 2006 to 2008. Revenue from data and conferences also increased—7.0% and 9.9%, respectively. Custom publishing revenue has remained relatively flat.
Magazines were the weakest performers, showing an 8.4-percent decrease and a 3.9-percent decline on a CAGR basis over the three‐year period.
As for profit performance, all major b-to-b media company revenue categories—except for magazines—for participating publishers increased on a contribution basis in 2008 and across the three‐year period of 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 dropped 26.8 percent in 2008 versus 2007 and at a CAGR of 16.5 percent from 2006 to 2008.