SPENDING IN THE year ahead on trade media, including business-to-business magazines, e-media and trade shows, will continue the steady growth of recent years, led by continued, healthy corporate profits, a strong economy and double- digit growth in investment from ad categories including home furnishings and automotive, forecasters report.
Overall trade spending in 2007 will grow 6.1 percent to $25.13 billion, following 6-plus percent growth in both 2005 and 2006, reports Veronis Suhler Stevenson. Magazines will continue to reap the greatest share of b-to-b business, ringing up $9.44 billion worth of ads, a 3.6 percent improvement over this year. But print's share of total b-to-b business, encompassing ads and circulation, continues to slip, falling next year to 44.9 percent, compared to 46.4 percent this year and 55.1 percent five years back.
While magazines are performing better than they did five years ago, when they suffered a 15.8 percent decline in ad business and 5.4 percent loss in circulation income, they are not expected to see the 5 percent growth in ad business they enjoyed last year for the rest of this decade. Print will continue to lag as marketers divert their investment to media that provide "a more immediate and measurable" return on their investment, VSS says. Circulation income will continue to decline in 2007, falling 1.8 percent to $1.83 billion.
"The increasing power of Internet marketing will continue to put pressure on print advertising spending in trade publications, and circulation, both paid and controlled, will continue to erode as businesses turn to the Internet for up-to-the-minute news and information," VSS says.
Both e-media and trade shows and exhibitions will continue to grab a bigger share of b-to-b dollars. In 2007, total spending on e-media, including advertising and content, is expected to soar 24.9 percent to $2.99 billion compared to this year, VSS reports. E-media's share of b-to-b business next year will grow to 11.9 percent, up from 10.1 percent this year and just 3.5 percent five years ago. E-media advertising next year is projected to grow an astounding 23.7 percent to $2.41 billion, due to its relative affordability and its ROI measurability, VSS says.
With business travel recovering and the popularity of event-oriented face-to-face business opportunities exploding, trade shows/exhibitions is expected to gain 5.4 percent to $10.87 billion next year and reap 43.2 percent of total b-to-b business. By 2009, trade shows/exhibitions is projected to overtake magazines as the largest contributor to trade-media coffers.
"We are in the same business of providing business information to industry. We never varied from that mission. The delivery platforms are what have changed," says Gordon T. Hughes II, president, CEO of the trade group American Business Media, which next year projects 1.6 percent growth in trade magazine ad spending, 14 percent gains for e-media and 6 percent increase in spending on trade shows.
"With the strong economy, we're seeing expanded marketing budgets by b-to-b advertisers and vendors, but they're allocating more to e-media properties, trade shows and custom publishing and less to traditional trade magazine advertising," says Thomas Kemp, VSS managing director. The ex-CEO of trade publisher Penton Media says he's "bullish about b-to-b media generally, although not bullish about advertising in print trade media." That said, VSS projects compound annual growth of 2.9 percent between 2005 and 2010 for print, compared to a drop of 4.3 percent in spending between 2000 and 2005. "While it's not growing as fast as marketing budgets, most marketers still recognize the efficiency of print advertising in reach and frequency," Kemp says.
Next year, business and financial services, including banking, insurance and legal, is projected to overtake information technology/telecommunications as the largest print ad segment in terms of share, growing 7.1 percent to $1.06 billion and achieving a 12.8 percent share of business. Info technology/telecom, meanwhile, next year remains the largest category in terms of dollars, even as it is expected to decline 4.1 percent to $1.25 billion, its share falling to 12.3 percent from 13.1 percent this year.