The answer to the question posed in the headline is obvious – it’s all about the money.
B2B publishers’ print ads are increasingly scarce real estate as their magazine circulations fall, and while forecasts do show digital advertising will cover that shortfall to an extent, it’s far from a guarantor of success for the industry.
And yet B2B endeavours are demonstrably very successful for the publishers who can grow them to scale. For instance, the publisher of the Daily Mail DMGT sees around three-quarters of its overall revenue coming from its B2B side – primarily its business intelligence and events side.
How we got here
UK B2B print magazine performance has fallen 1.74 percent year on year across all titles, as compiled by the Audit Bureau of Circulation, from roughly 6,378,000 print editions sold to 6,266,000. That’s a total loss around of 111,000 print editions year on year, and that’s a trend that’s been continuing for a while now.
The PPA’s last available estimate forecasted that from 2011 – 2013 the total contribution print would make to B2B publishers’ revenue would fall from 59.4 percent to 52 percent. That’s a trend that’s likely to have continued even PwC estimates that overall CAGR for the industry is set to grow consistently (driven largely by the US, admittedly).
So it looks like a lot of those UK-based B2B publishers who are seeing their print revenue falling are relying on digital growth to supplant it. That’s supported by PwC, although they also note that: “only directory advertising will have majority digital revenue in 2019”:
And the ABC figures do note some modest growth in the number of web and digital editions for UK B2B publishers: There are currently 49 publishers in the UK who report their digital edition circulation, for instance, and while the most successful (Bauer’s ‘AM’) has a circulation of nearly 1,000 (no YOY comparison available since it’s only recently been added to the ABCs) the average across all the digital editions is only 1,980.
While the number of B2B publishers who report their web traffic is still relatively low, those numbers are modest too.
The brilliance of B2B marketing
Globally, by 2020 the B2B ecommerce market will be twice as large as the B2C market — $6.7 trillion vs. $3.2 trillion — according to research provider Frost & Sullivan. The company predicts that China will emerge as the largest online B2B market with $2.1 trillion in sales by 2020.
B2B publishers also have more twice the ecommerce conversion rate at B2C publishers now – 7.3 percent for B2B publishers as opposed to 3 percent for B2C.
However, PwC indicates that trade shows and events are set to become even more important for B2B publishers globally – and there’s no reason to suggest that the big British B2B publishers won’t be taking advantage of that.
Which is something we’ve previously seen at DMGT, for instance. In the first quarter of 2015, its events division’s revenue grew 14 percent – notably the only section of the business that matched forecasts for the quarter from analysts Exane BNP Paribas – while event sales actually increased 23 percent to £47 million. And its more recent results suggest its B2B events and information are still compensating for its media revenue slowdown.
In terms of revenue diversification, TMB has previously argued that B2B publishers have a real opportunity to capitalise on the business information game:
“Back in 2012, David Carey of Hearst told the Economist it takes ‘five or six revenue streams’ to make a publishing business successful. A business like [Polytika Insight] is founded on that diversity of product, but really only has one obvious revenue stream – subscriptions.
In this sense, PI is more like a consulting firm than a publishing firm; the value of access, analysis and insight is baked into the company’s DNA. And that’s a media model lesson that deserves to be reported more widely.”
In addition to comments by the CEO of IDG Communications Worldwide Michael Friedenberg, who said in an interview with FIPP:
“What we’re focused on right now is moving from conventional web strategy to mobile, social, data-driven web strategy. The market focus is on brands versus audiences and what we call brand-specific revenue streams versus marketing services revenue streams.
“I’m happy to say that 51 per cent of our overall revenue is now coming from marketing services or revenues that aren’t brand-attributable. So we’re doing a really nice job of broadening out our portfolio and monetising our capabilities.”
As with the rest of the publishing industry, the B2B market is being squeezed. But it also has enormous potential to trade off the expertise of its journalists, writers and analysts to become more viable than ever in a world where accurate information is ever-more vital.