B-to-B: Still Wait-And-See

Business-to-business ad spending, an important lagging indicator of the overall media economy, continues to be erratic and the industry's trade group Thursday downgraded its outlook for advertising growth for calendar 2003. On the bright side, American Business Media (ABM) still expects a surge in fourth quarter spending by business marketers to eke out a modest increase for business media outlets for the year.

"It won't be a hockey-stick escalation, but it should be enough to help us end the year up about 1 percent to 2 percent," said Gordon Hughes, president and chief executive officer of the ABM. Previously, the ABM was projecting a 2003 growth rate of as much as 3 percent, but following three consecutive months of erosion in business media budgets, that upper range now looks doubtful.

The rates of erosion among business marketers, however, appear to be stabilizing. Following a temporary and modest gain in ad spending and pages in June, B-to-B ad dollars and pages fell again in July, August and September. But September's 0.5 percent dip in ad dollars and 2.2 percent decline in ad pages was one of the most moderate cutbacks this year and is certainly a significant improvement from the steep rates of decline business media experienced during the height of the U.S. economic downturn.



Nonetheless, the B-to-B ad recovery appears to be an especially erratic one, according to estimates released Thursday by the Business Information Network (BIN), a venture of the ABM and TNS Media Intelligence/CMR. Seven of the 12 major B-to-B ad categories tracked by BIN cut back on ad pages in the business press in September, especially telecommunications (-21.1 percent), software (-15.5 percent) and computers (-13.8 percent).

While a relatively small piece of the overall advertising marketplace, B-to-B spending is considered an important indicator of the underlying health of marketing spending and it is believed that a genuine, sustained upturn in B-to-B ad budgets would signal a full economic recovery for Madison Avenue.

Business-to-Business Ad Pages, Dollar Trends

September '03 Third Quarter '03 1st 9 Months '03
Ad Pages -2.2% -5.2% No Change
Ad Dollars -0.5% -3.2% -3.8%

Source: Business Information Network, American Business Media, TNS Media Intelligence/CMR.
Next story loading loading..