Print Revenue Highest, But Digital Driving Growth For B-to-Bs

According to the FOLIO 2014 B-to-B CEO Survey, print advertising accounted for 52.5% of total revenue last year, higher than it was in 2010 at 52.4%. That's actually more surprising when you look at what's been expected from print advertising on a year-by-year basis, says the report.

In each of the last five surveys, respondents have underestimated the following year's revenue from print. Last year, for example, the group thought print advertising would make up 49.5% of total revenue in 2014, three percentage points less than what it turned out to be. The gap between expectation and reality has run anywhere from less than 1% to more than 6% since 2010, but always lower.

Digital media, while growing, has seen the opposite effect. B-to-B media CEOs are consistently overrating its revenue potential; last year, by 3.7%.

Organization Revenue Sources (% of Revenue)

 

Company Size/% of Revenue/Year

Revenue Source

< $5M/ %Revenue

$5M+/ %Revenue

 

2013

Est 2014

2013

Est 2014

Print advertising

55.1%

51.9%

48.3%

46.6%

Digital Media

13.3

13.9

18.4

19.6

Events

9.6

11.2

16.1

15.6

Marketing services

6.4

7.0

15.6

6.1

Paid subscriptions

5.5

5.9

5.1

5.6

Data/market information

3.4

3.8

4.8

5.2

Other

6.7

6.4

1.8

1.3

Source: FOLIO, May 2014

8% of those surveyed invested $500,000 or more in technology last year, while 44% crossed the $25,000-mark, both 5-year highs. Just 9% didn't make significant investments in tech. A majority of those investment dollars are aimed at bolstering digital media capabilities through upgrades to websites, CMSs, webinars, social media and video, claims the report. And, a quarter of the CEOs surveyed say they're planning to add digital media staff in 2014.

It's a different story with print. Respondents' companies will not make anything more than a minimal investment in print products this year. A quarter of them will shift resources away from ink and paper, says the report.

Digital's growth potential has been consistently and overwhelmingly labeled the fastest growing part of respondents' businesses since 2010. Digital media has also been the most profitable piece of business over that period, reliably generating margins above 16%.

Not surprisingly, CEOs are expecting digital media to continue driving growth in 2014. More respondents are expecting increased revenue there than from any other source, but their enthusiasm has been tempered. Revenue forecasts are close to 3% lower than they were last year. There's evidence B-to-B media company CEOs are now turning to a new golden goose: live events, says the report.

As a percentage of total revenue, event earnings have tickedup 2% in each of the last two years, even though expectations have called for less than half of that growth (events made up 12.2% of total revenue in 2014). One-third of respondents also claimed live shows as one of their fastest-growing business segments last year, only trailing digital media. Profit margins have been above 17% since 2011.

Companies have more events on the way, says the report. Of changes anticipated for 2014, 46% of respondents say they're planning on launching a new event, up from 32% last year and almost double the next most commonly anticipated change, the launch of a digital startup.

Additions to event staffs highlight the emphasis even further, with a quarter of the companies surveyed planning to add event professionals in 2014, with a third of the respondents calling creating live events one of their top 3 priorities for the year, says the report.

According to a new series of questions aimed at tablet and mobile publishing for the 2014 survey, companies have rolled out a responsive design site, a dedicated mobile site,or both, with the crowd evenly split between two main options: 39% have opted for responsive design; 36% have developed sites specifically for mobile.

There's a significant difference in mobile strategy between companies generating at least $5 million in revenue and those falling below that threshold though. Mobile adoption is almost universal for large publishers now (only 7% say they haven't opted for a responsive or mobile site yet), while more than 40% of smaller publishers have stuck with desktop-only sites to this point.

Looking ahead, 85% of the CEOs surveyed think they're headed for revenue increases in the next 12 months, another 5-year high, compared with just 12% who think earnings will stay flat and 1% who believe they're headed for a downturn, says the report.

Finally, companies are looking to spend as well, with 69% saying they'll add staffers in 2014, a high point compared with previous surveys.

More information about this report, prepared by Michael Rondon for FOLIO, may be found here.

 

 

 

 

 

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