BtoB Media Business - July 2008 - (Page 10)

SPECIAL REPORT Budgeting for a challenging ’09 B-to-b media executives look to digital media to help them through tough economic times By Marie Griffin A s leaders of business media companies approach the 2009 budgeting season, one adjective keeps coming up: challenging. ¶ “The b-to-b media industry will continue to be challenged,” said Neal Vitale, president-CEO of 1105 Media. The company originally budgeted for 4% to 5% aggregate growth this year over 2007. “We’re going to be down in single digits from budget for full-year 2008,” he said, “but up 1% to 2% from last year in total revenue.” To make its bottom-line budget, 1105 Media has already tightened spending, allowed vacant positions to remain unfilled and delayed deployment of some budgeted initiatives. “I don’t like what we are having to do to make budget this year,” Vitale said. “We are having to make cuts and to spend less in areas where we’d like to spend more.” “I’m not bullish on 2009,” Vitale added. “We will budget up in the low single digits off of 2008 revenue, which is not much different from what we did when we budgeted for this year.” been doing extremely well, President-CEO Kerry Gumas said. “As of the halfway point of 2008, we are slightly ahead of our budget on a revenue basis, which will put us ahead by about 11% year over year. We feel pretty confident we will hit our annual objectives for 2008, and from where we sit at the end of June in 2008, we will budget to be up somewhere in the 5% to 6% range in revenue in 2009.” Gumas said he’s still keeping an eye on inflationary trends in the economy. “If the economy continues to move in this direction, our forecast may wind up changing,” he said. “In any event, this is going to be one of the most challenging markets we’ve seen in a long time.” “We’re taking a very conservative view, to be perfectly direct,” said Jim Malkin, chairman-CEO of SourceMedia Inc., which serves the banking, credit, investment management and mortgage markets, as well as related technology businesses. “I am not expecting anything to get particularly better until the end of 2009. I would love to be proven wrong, but I don’t see anything going on in the market, with our clients or in the economy that suggests any upturn in sight.” If it weren’t for SourceMedia’s mortgage group, “our business would be flat to last year for 2008,” Malkin said. “With mortgages, we’re about 3% below where we were at the end of the first half of last year.” SourceMedia will budget flat to actual 2008 revenue for 2009, he said. As an antidote to economic forces beyond its control, SourceMedia has “completely revamped” its custom media efforts with a newly created central group, Malkin said. “We’ve had to change how our company approaches the clients. Custom media requires a significantly different sales process and training, and we have brought new people into our organization with experience doing this.” Economic unknowns In the four months prior to a presidential election, the U.S. economy will be filled with unknowns, with wars continuing in Afghanistan and Iraq, record high oil prices, financial institutions rocked by subprime mortgage losses and tumbling home values. Yet the economy will always go through up-and-down cycles, said Gordon T. Hughes II, president-CEO of American Business Media. Business media companies face a much greater long-term challenge today in transforming themselves—in every function and level—for the new ways the Internet enables business audiences to consume information and marketers to reach them. Controlling costs On the cost side of the equation, the 1105 Media team will be “looking at spending and staffing,” Vitale said. “With more online content, we’re looking at how we’re organized editorially. We’re looking at circulation. We’re looking at production. I don’t think there’s any area of our business where we’re not examining the spending. Obviously, we’ve been aggressively managing to deliver the bottom line.” Questex Media Group, by contrast, has 10 | Media Business | July 2008 | mediabusinessonline.com http://mediabusinessonline.com

Table of Contents for the Digital Edition of BtoB Media Business - July 2008

BtoB Media Business - July 2008
Contents
AABP Hands Out Editorial Excellence Awards
Greening Events Can Help Grow Revenue
In a Word, Budgeting for '09 Will be Challenging
Sales and Marketing
M and A
Online
Circulation
Production
People
Benchmarks
Confident Enough to Charge for Content

BtoB Media Business - July 2008