Print Products: Magazines Aren't Dead Yet

For those in the trenches of business-to-business publishing, it certainly isn't news that in the past few years print has suffered as more and more focus has shifted to the Web.

In 2007, advertising revenue for B-to-B magazines was down 2 percent, compared with the year before, according to Gordon Hughes, president and CEO of American Business Media. And more recently, what seems to be additional dire news is thatMinOnline reported that overall ad pages for the month of May were down 4.97 percent, compared with the same period last year.

Even so, the numbers don't tell the whole story.

It's an undeniable fact that print advertising has diminished considerably, forcing many companies to rethink and realign their business models by putting more emphasis on face-to-face, the Web and other information sources where revenues are more robust.

At the same time, many of the declines are in certain market sectors — not across the board — and most agree that without magazines, companies would be hard-pressed to have successful events and online products in the first place.

The trick seems to be finding the right mix.

Charles McCurdy, chairman and CEO of Apprise Media, parent company of Canon Communications, said his company has found success by serving a particular sector — advanced manufacturing — in an effective way through a combination of print, online and face-to-face.

"As in most B-to-B sectors, magazines are still widely read and relied upon, and a large majority of advertising dollars are directed to them," McCurdy said. "E-media still provides a distinct minority of ad revenue, but is where we see a very high level of growth and innovation. Tradeshows play a vital role in the media mix and are our largest sector."

Neal Vitale, president and CEO of 1105 Media, said, "There's no magic number for us, we just want a balance of media." The company's portfolio is 40 percent print, 40 percent events and the rest online and other revenue streams, he added.

"We have print activities that are very strong this year," Vitale said. "We have online that's very strong, we have events that are very strong and we have problems in every one of those areas. I find it's very much market by market, product by product."

For Access Intelligence, the key to growth has been its high-value information services, which makes up 48 percent of the company's revenue. The rest of Access' subscription-based portfolio is magazines, 28 percent; events, 21 percent; and online, 3 percent. The non-subscription-based mix is substantially different with 54 percent magazines, 40 percent events and 6 percent online. Don Pazour, Access president and CEO, said, while magazine ad revenue may have dipped, it remains an important component of the B-to-B landscape. "There are still profitable magazines, and magazines provide excellent databases of readers that relate to magazine brands," Pazour said.

In addition, as companies continue to shift resources online, the margin on flat print revenue improves as editorial, sales and audience development staffs are used to build online extensions of the print brands, he added.

Without magazines, McCurdy said, B-to-B media companies wouldn't have portfolios. "They'd have no brands, no content-creation capability, no audience-generating capability, no sales relationships," he added.

Scott Mozarsky, executive vice president and COO of United Business Media, agreed, but with the caveat that the need for a magazine in a portfolio depends on the audiences the company serves and the audiences the company's customers are targeting.

"If a company wants to provide a complete set of offerings to an audience that is still consuming print, print is necessary to be successful," Mozarsky said. "This enables companies to have an integrated product portfolio that can serve all the needs of its customers."

Questex Media has figured out the balance with its American Salon magazine, which topped min's charts for ad page growth at 38 percent last year. It also has growing events and e-media revenue, according to Kerry Gumas, the company's president and CEO.

"We believe that in B-to-B, customers, advertisers and readers have been clear about indicating their preference for multiple media channels and that a reliance on any single media platform is, for that reason, a less effective business strategy," Gumas said.

Still, even with magazine ad revenue declining, a shift to online ads has yet to turn into a cash cow for companies. Hughes pointed out that if a print ad costs a dollar, chances are the same ad online will go for 25 cents — though that could change in the future. "Digital is a $4.5 billion industry, and it's growing at 20 percent (a year)," he added. "It could surpass print in 2011."

There is a pot of gold at the end of the B-to-B media rainbow: face-to-face events. According to Hal Greenberg, managing director of private equity firm Veronis Suhler Stevenson, owner of Advanstar Communications, face-to-face has an annual growth rate of nearly 6 percent.

"Financially, the event business can offer better margins and growth rates than print publishing, and great shareholder returns," Gumas said.

Pazour added, "Face-to-face is valuable in a dramatically shifting media environment because, while technology offers interesting alternatives to magazines and other information products, pressing flesh has not yet been disinter mediated by the Internet."