• by Erik Sass  @eriksass1, May 5, 2009

Business-to-business media is seeing a rapid shift of advertising dollars to online platforms, according to Outsell Inc., a research consultancy serving the information industries. But a closer look at the numbers shows that, in part, the apparent shift is simply a dwindling away of print revenues, accompanied by moderate growth online. The unavoidable fact remains that overall B2B revenues have decreased since 2005.

The Outsell report, titled "Market Analysis: Leaders in the B2B Print to Electronic Revenue Shift," found that between 2003 and 2008, print revenue's share of total B2B revenue fell from 58.3% to 40% as online revenues jumped from 18% to 33.9% during the same period; the rest came from events, which have hovered around a quarter of total revenues.

The bulk of the shift happened between 2005 and 2007, when print declined from 53.1% to 44.1%, while online increased from 22.1% to 30.2%.

Taking a slightly longer view, however, the B2B marketplace has contracted during the last decade. Between 2000 and 2008, total B2B revenues declined $4.1 billion from $24.7 billion to $20.6 billion -- a drop of roughly 17%.

During the same period, digital revenues jumped from $2 billion to $7.3 billion -- a substantial increase that nonetheless failed to make up for losses on the print side, which tumbled from $15.7 billion to $8.2 billion between 2000 and 2008. The trend was still evident in the most recent figures, as overall revenues fell 2.5% from 2007-2008, with print declining $1.1. billion while online grew $1 billion.

Thus, a good part of the percentage shift from print to online simply reflects diminishing print revenues. If total revenues had remained stable at $24.7 billion, $6.9 billion in online revenues recorded for 2008 would equal about 27.9% of the total, rather than 33.9%. And while there is no question that the future of B2B media lies online, at this rate it's unlikely the industry will revisit the high watermark of 2000 anytime soon.

B2B has been confronted with the same dilemma faced by other print media, including consumer magazines and newspapers -- online, while a promising area for new revenue growth in its own right, has so far failed to offset much larger losses on the print side.

For example, Time Inc.'s online revenues grew $57 million from 2007-2008 to about $245 million, while total ad revenues fell 7%, from $4.95 to $4.6 billion -- a loss greater than all its online revenues. Similarly, from 2006-2008, newspapers' online revenues increased from $2.66 billion to $3.1 billion, while total revenues plunged from $49.3 billion to $37.8 billion -- a loss equal to roughly four times total online revenues in 2008.