BtoB Media Business - December 2007 - (Page 8)

COVER STORY VERTICAL OUTLOOK W P AGRICULTURE 2007 YTD pages: 15,407.2 2006 YTD pages: 15,527.6 % change: -0.78% Bright spots: Online media spending is rising as more farmers get broadband service. The demand for ethanol is boosting prices for soybeans as well as corn. Challenges: Print advertising revenue is stagnant as marketers step up their online spending. Rising oil prices affect farmers’ costs. As the U.S. economy heads into 2008 on a sluggish note, b-to-b media companies will have to cater more closely to their customers’ needs to ensure revenue streams keep flowing ith the economy showing signs of slowing down, companies are expected to be more selective about where they put their marketing dollars in the new year. That means business publishers will be bearing down and concentrating more on two areas that are seeing increased marketing spending: online and events. ¶ Another trend that is expected to accelerate in 2008—the offering of integrated marketing packages. ¶ And while b-to-b print revenue overall continues to erode, the medium still has its place, especially with certain audiences. AUTOMOTIVE 2007 YTD pages: 15,036.4 2006 YTD pages: 15,183.2 % change: -0.97% Bright spots: While overall car sales are declining, large automotive advertisers have maintained their spending levels with business publishers. Financial services companies and insurers are also running large volumes of advertising. Challenges: With sales of new cars expected to remain on the sluggish side, business publishers have to cultivate advertisers targeting more niche sectors of the business. rint advertising has been essentially flat in the agriculture sector even though leading publishers say their revenues are up. The reason: Marketers are investing more of their budgets online. The agricultural community lagged in Internet adoption because broadband service had not reached many rural areas, but farmers are catching up quickly as high-speed service becomes available. This, in turn, has opened the floodgates on suppliers’ pent-up desire for digital programs. “We’re seeing print dwindling, but digital revenues are growing,” said Cliff Becker, VP-publishing director at Vance Publishing’s Food 360 protein division. “Print will continue to be important, but more money is going to digital because advertisers are looking for programs that are more creative, innovative and diverse.” “Print metrics capture only part of what’s going on,” said Steve Custer, exec VP-publisher of Farm Journal Media. “Our online and events businesses are exploding.” With “no accurate measurement” available for digital and events spending across the marketplace, he added, he cannot quantify the magnitude of the shift. Ironically, advertising pages are slipping at a time when most farmers are doing better than they have in two or three years. The use of ethanol as an alternative fuel “is dramatically increasing corn prices,” Custer said, adding that the number of acres planted in corn increased 16% from 2006 to 2007. Meanwhile, “bean prices are sky high” because fewer acres were cultivated in soybeans. The wild card for 2008 is oil prices, Becker said. If fuel costs keep rising, it will have a big impact because farmers rely so heavily on petroleum-based fuels in their operations. Projecting print advertising for next year, Custer predicted ad pages will be up somewhat, while Becker said, “They’ll probably be a few ticks down.” —Marie Griffin W ith new car sales continuing at a sluggish pace, b-to-b media companies serving the automotive industry are putting more emphasis on used-car sales and parts and services, as well as cultivating other sectors that are keyed into automotive markets. “The volume of the Big Three automakers has been waning the last 18 months,” said Larry Schlagheck, advertising director of Automotive News. “And when they’re not bringing in money, there’s less marketing dollars to spend.” (Automotive News, like Media Business, is published by Crain Communications Inc.) Sales of new vehicles are expected to total about 16.1 million units this year, down from 16.5 million in 2006 and nearly 17 million in 2005, according to the Automotive News Data Center. B-to-b publishers serving automotive markets have to find other sources of revenue, Schlagheck said, pointing to used cars and parts and services. Despite the challenges, he said he has not seen a reduction in advertising spending among large buyers. Print revenue, he said, is expected to be flat this year compared with 2006, while online revenue is expected to grow 40%. It’s a slightly better outlook at Bobit Business Media, whose automotive portfolio includes Automotive Fleet, Business Fleet, Government Fleet and the recently launched Work Truck. With less exposure to new car sales, print revenue for the portfolio is expected to grow 5% this year while online revenue is expected to increase 80%, said Sherb Brown, VP-group publisher. “The commercial market for truck sales is strong,” he said. Bigticket advertisers targeting automotive markets are also picking up some of the slack, he added. “Financial and insurance [advertising] is very strong, and their spending more than makes up for a decrease from the automotive manufacturers.” —Matthew Schwartz NOTE: Ad page data supplied by Inquiry Management Systems (IMS), unless otherwise noted. Year-to-date figures are through November. 8 | Media Business | December 2007 | mediabusinessonline.com http://mediabusinessonline.com

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BtoB Media Business - December 2007 Contents Upfront Vertical Outlook Resource Guide Sales & Marketing M&A Events Production Online Circulation People Benchmarks Endnote

BtoB Media Business - December 2007

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