B-to-B Publishing Has Sunk Into Death Spiral
It's way past the time to walk away from print.
04/14/2008 -16:51 PM
Things are awful and getting worse.
That's my conclusion about b-to-b publishing, as yet another company takes drastic measures after finding it can't carry an absurd debt load in a recessionary economy.
In an e-mail to employees, Penton CEO John French announced a company-wide salary and hiring freeze. He also requested ideas on cutting costs. John also "asked for a complete reforecast from all of our product managers, including a restated revenue forecast and a projected expense forecast for the remainder of 2008." That process should be completed by the end of the month, at which time John promised to report back to the staff "on our findings." [SEE RELATED: Penton Media Announces Hiring, Salary Freeze, Company-Wide Revenue Reforecasting]
Penton's announcement comes in the wake of a slew of bad news in our industry. And when I add up these events, I see catastrophe.
I don't want to sound too dramatic, but I've gone from being worried to being worried sick. Much of b-to-b publishing, weighed down by the twin albatrosses of junk bonds and rising print costs, has sunk into a death spiral.
Consider the news of the past few days:
- Northstar Travel Media announced yesterday that it's for sale. Boston Ventures, the private equity company that bought Northstar from Reed Elsevier in 2001, has apparently had enough. The Northstar sale will take place in a particularly tough environment. There's already a ton of b-to-b properties on the market—including Reed Business Information, the U.S. b-to-b unit of Reed Elsevier.
- Among the b-to-b companies languishing on the shelf is Ziff Davis Media. Late last year, Ziff managed to sell its most valuable properties. This week the new owner of those properties, Ziff Davis Enterprises, announced companywide layoffs. It's also worth noting that both Ziff Davis Media and ZDE have recently gone back on the promise to cease the unethical use of in-edit advertising—a sure sign of desperation and idiocy.
- Earlier this week Nielsen Business Media announced another series of layoffs. It's still unclear just how many jobs were cut in this round. But news reports put the total loss of jobs at the former VNU at around 4,000 in the past year. Over at Penton, there are some exceptions to the hiring freeze.
Penton's New Media Group will be spared, because, as John noted, "these activities are critical to our revenue growth plans for both the near and long-term future." (Disclosure: I've consulted on several projects for the group.)
That shouldn't surprise anyone.
The giant publishers—and many of the smaller ones too—are in the exact same position. Their revenue is falling while their print expenses are rising. Choking on debt, all they can do is exit the game entirely or cut expenses and double their bets on new media.
There's simply no other way out. But there is another way out for the editors, salespeople and designers of b-to-b: You can walk away from print.
And it's way, way, way past the time you did so.
RELATED LINKS
--
Folio: Contributor
COMMENTS/DISCUSS: 14
Post Comment / Discuss This Blog - Info/Rules
Top article!
Submitted by Private Frazer on Tue, 04/15/2008 - 04:19.And I get accused of being negative! (http://privatefraser.wordpress.com/) I agree with almost every word of this piece
Self inflicted wounds?
Submitted by Josh Gordon on Tue, 04/15/2008 - 08:46.I agree with your analysis of the trend. But there is tremendous revenue potential in the online advertising world for for B to B brands. Why is B to B online revenue going elsewhere? Go the IAB website where every quarter racks up another record of revenue growth. The money is there and some publishers are finding it.
Question
Submitted by Anonymous on Tue, 04/15/2008 - 11:31.So you tell editors such as myself to get out of B2B print. But where do we go, especially in this economy? It's easy to say -- not easy to do.
Trade Shows: The White Knight
Submitted by Carl Pugh on Tue, 04/15/2008 - 13:36.While print media continues its decade-long decline, and online media contributes only modestly for most B-to-B publishers, it is good old fashioned trade shows that consistently deliver significant top and bottom line contributions. Why? Think vertical Google in 3-D. A buyer can physically see and touch everything and everyone they need to in a very short time. By definition, trade shows provide highly filtered search results for a given marketplace. What’s more, people are inherently gregarious. As technology allows us to work and live in greater isolation, face-to-face becomes ever more important. Think you’ve missed the boat because there are already too many events in your space? Take a closer look. In 25 years of launching dozens of shows I have never launched into a “virgin”market. There is always room for a better focused, better timed, better located, better run event.
Next steps??
Submitted by ExitDoorsAreLocked on Tue, 04/15/2008 - 14:05.I've been trying to get out of B2B, but employers are looking for the nonextistent (employees with super-specific work histories), and are are unwilling to train or realize that someone who's got a wealth of experience and transferrable skillsets can prove just as valuable as Mr/Ms. right employee.
Gimme a break!
Submitted by Anonymous on Tue, 04/15/2008 - 14:20.HELLO?! This is just some negative guy's opinion! Some companies plan well to work through a recession. . . . .B2B media is not going to disappear! The sky is not falling!
Thanks for making it worse...
Submitted by Anonymous on Tue, 04/15/2008 - 15:44.It's this type of stuff that makes the situation worse. So, when TV was invented did radio die? We're evolving and going through some pains to do so - just like newspapers and tv are due to the web. Get over it and on with it - and stop the negative and unconstuctive stuff...it's a waste of time.
B-to-B will rise again
Submitted by Al on Tue, 04/15/2008 - 15:58.Let's not overeact. This is a downturn. Of course advertising has fallen. And, of course, costs need to be cut when revenues fall. Most US magazines are already overstaffed compared to their international competitors anyway.
Saying that B-to-B is dead is ridiculous. It is like diagnosing TB just because someone coughs. In two years time we will be celebrating record print and online ad revenues.
PS Who says print costs are rising? Our printers have agreed to cut their rates by 15% this year to reflect their increased efficiency.
This is not a downturn it is a structural shift.
Submitted by John Failla on Tue, 04/15/2008 - 18:08.Marketers search for more measurable ROI and their ability to realize them in face to face events and emedia are the driver. Economic downturns are simply accelerating the shift. If you haven't read Carl Pugh's comments above read them. If you have read them, read them again. Near term sustainable B2B media profits are in face to face media.
Chicken Little...The Sky's Not Falling
Submitted by Anonymous on Tue, 04/15/2008 - 21:42.Let's not get carried away. Your own email newsletter reported in the April 1st edition that national magazine ad sales were up 7.6% in 2007. BtB was down 4% and regional titles were off 1.6%. I would guess that these figures did not include magazine interactive sales. So I guess you want us to believe that in the last 2 weeks we've gone from an up year (or marginally off in the case of BtB) to head for the exits because print is dead. Make up your mind...
Response to comments
Submitted by Paul Conley on Wed, 04/16/2008 - 08:34.Thanks for the comments to this post. But I must say that I'm disappointed by the reactions. While some folks seem to have actually read what I wrote, others clearly have not. In particular, the people who have posted comments anonymously seem to have misunderstood. I did not say "B2B is dead." Nor did I say that "Print is dead." What I said is that "much of b-to-b publishing, weighed down by the twin albatrosses of junk bonds and rising print costs, has sunk into a death spiral." That is clearly true. In those rare instances when we can actually see the balance sheets from a B2B publisher, what we see is a debt load that cannot be carried in the present economy.
Of course the B2B industry will survive. Remarkably, the industry will survive despite the shockingly high numbers of people in the field who can't read, can't think and don't understand finance.
But it's also clear that much of the industry won't survive. Some of it has already disappeared -- and these are the early days of the decline. We'll see bankrupt companies. We'll see shuttered magazines.
But it's nonsense to suggest that pointing out the problems of debt finance in B2B publishing is "making things worse." More importantly, when I see someone hide behind an anonymous post and complain about negativity, I see a behavior that is at odds with the very nature of B2B publishing. Looking at a business -- its strengths, weaknesses, future and past -- is what we do. And attaching our names to what we write is the key to our credibility.
B-to-B to the Bone
Submitted by Mark A Newman on Wed, 04/16/2008 - 14:08.Paul, I took your advice and got the hell out of trade/B-to-B...when I was laid off a week a half before Christmas 2005 after the two mags I worked for merged to a single publication. "Should I go ahead and update my resume?" I asked as soon as the new venture was announced. "No, no, no, there's plenty of work for everyone," I was told. Yeah, right. I'm now in consumer publishing and while it's not perfect it's the most secure job I've had since leaving the non-profit publishing world (prior to my B-to-B follies). I have seen the worst management on both the business and the editorial side take place in B-to-B publishing---Editors in Chief who strut around the offices like they're Anna Wintour II despite a total audience of 12,000, to group publishers who pick favorites among their magazine titles while worthy, important, and dynamic titles are left to wither on the vine and eventually die, to top managers who never in their life have written a story or sold an ad suddenly at the helm of the ship! And don't even get me started on the human resource professionals who are clueless as to what their jobs really are, and finally, the less said about some of the sociopaths who find their way to B-to-B books with the social graces of a Manson family member, the better! While I would never say never in terms of returning to trade/B-to-B publishing, I don't see it happening!
Small publishers succeed where giants fall
Submitted by Anonymous on Wed, 04/16/2008 - 15:51.Using, Penton, Reed Business US, VNU, & even Hanley-Wood as examples of B-2-B publishing is just flat wrong, each company has taken a portfolio view of their business and in turn deserted the communities that built their enterprise. In their desperate attempts to convert communities to lower expense electronic media they have ignored the fundamental need of their audiences and the limitations of the audiences access to electronic media. PDA and mobile technologies are useful if you are delivering need-to-know information not nice-to-know information. There is a one hell of a learning curve experienced in many fields and B-2-B publishing is often the only source of technical information.
Agree
Submitted by Jim Thompson on Mon, 04/21/2008 - 16:57.I am in the basic pulp and paper industry and have been for over 30 years. My comments for many years have been that in the long run, the pulp and paper industry consists of packaging and tissue. If it involves print on paper, it is bound to become a niche market. This is proving true in so many ways. I did not find the comments from those above to be any different than they are in the basic paper industry. Many are in denial because they are afraid. I did find Mr. Pugh comments very interesting. Trade shows have been dying in the pulp and paper industry for nearly twenty years now. Attendance is abysmal. So, what have I done? I started some pulp and paper online publications, one of them nearly 7 years old. I am not trying to slyly get advertising for free in this venue, but if you want to look at them go to www.globalpapermoney.com and www.nipimpressions.com. They are very widely read within our industry worldwide and they are now available in twelve languages--try that with print.
FOLIO: PRIME SPONSORS
