The U.S. B2B media and information industry saw a slow start to the first half of 2016, inching up 2.7 percent to $14.7 billion, compared to $14.3 billion in the first half of 2015, thanks to slowdowns in some key verticals, market uncertainties surrounding the presidential election, Brexit, and continued market corrections with digital advertising.
B2B media is shifting from product-based approaches (magazines, websites, newsletters events) to service-based (marketing services, account-based marketing, custom event). The challenge for publishers is scaling a services business and being able to adapt to the “next big thing.”
Events continues to be the largest overall revenue stream (by a wide margin) but growth is relatively flat, posting just a 2 percent gain to $6.38 billion in the first six months of 20016. Much like media advertising, events are becoming much more of a metrics-driven endeavor, with sponsors and exhibitors demanding hard ROI for their dollars. Oversaturation in expos and conferences is also giving rise to new types of events, such as hosted buyer (where a single event sponsor pays to meet with qualified buyers), executive forums and custom conferences.
Digital advertising and marketing saw a 7.9 percent gain to $3.8 billion in the first half of 2016—far outpacing either events or print advertising but also representing the first time growth has been less than double digit percentage points in several years. However, the first half of 2016 also represents the first time that digital advertising totaled more than print advertising for two consecutive fiscal quarters.
While desktop digital advertising represents just 19 percent of the IAB’s $27.5 billion estimate for the first half of 2016 (the IAB also says desktop digital fell 7 percent in that same period), it continues to account for the majority of digital advertising dollars for B2B publishers.
And while many publishers are cutting print from their portfolios, for others it remains a controlled contraction. As digital budgets go up, print budgets go down and for many publishers, print is still the largest overall revenue stream. Neither are most small to mid-sized B2B advertisers clamoring for new solutions as well. As one digital media executive recently told Connectiv, “We’re going to prepare for the new ad units and put them in our media kits but will anyone take them out? We can’t get our people to buy interstitials, which are the most high impact ad units on our websites. We’ve proven that they’re better. Our gallery ads do 2 percent clickthroughs and a rectangle does 0.2 percent and people still don’t buy galleries. I feel like we’re moving people from print to Web still. I’d love to do new types of units but it doesn’t pay to be too far ahead of advertisers. Product development goes into the product, not the advertising.”
However, a focus on “traditional” digital advertising is being penalized by the investment community and marketing services and data-driven advertising will be the cornerstone of digital growth going forward. Programmatic buying is starting to emerge and while it remains stigmatized (with good reason) as a way of advertisers just driving down price, publishers holding firm on pricing in private marketplaces are starting to see pay-offs in both efficiency and targeting.
While print advertising remains the largest revenue stream for smaller publishers and those serving more traditional industries, the rate of print contraction is starting to pick up again. Print advertising in B2B dropped 7.1 percent to $2.91 billion in the first half of 2016, according to IMS. Of the 22 verticals tracked by IMS, 19 saw declines. The three bucking the downward trend included Transportation (up 0.18 percent), Healthcare (up 2.5 percent) and Agriculture, which saw a whopping 17 percent gain. For a monthly breakdown of print advertising performance in the first half of 2016, click here.
In the 2015 Connectiv Census, Connectiv members said that by 2020, paid content (including individual subscriptions, corporate subscriptions, Data/Business Information/Paid content) will be the second largest revenue stream after events (thanks in large part to publishers seeking an alternative to the challenges in media advertising). While paid content and subscription revenue are not fast growth revenue streams, the volume of publishers developing subscription revenue as well as research and information services drove paid content revenue up 10 percent in the first half of 2016 to $1.61 billion.
BIN Report: January-June 2016 Versus January-June 2015
Category 1H 2016 1H 2015 % Change
Events $6.38 $6.26 2.0%
Digital $3.80 $3.52 7.9%
Print $2.91 $3.13 (7.1%)
Data $1.61 $1.47 10%
Total: $14.7 $14.38 2.7%
Dollars in billions
The BIN report combines data from several sources. Event revenue is supplied by CEIR; print advertising data is provided by publishing service bureau IMS. Data on B2B digital advertising is estimated by Connectiv based on information provided by the IAB. The data component of the BIN report is comprised of Connectiv estimates.