Revenue shift: An inflection point for B2B publishers

Business-to-business publishers have struggled mightily over the past decade to decrease their reliance on print revenues, but the transition has not been easy. The margins and incentives for selling in the digital space were never enough to drive wholesale change in the way B2B publishers approached the market. While everyone knew the transition to digital was happening, the fact was that print still drove the majority of revenues for many B2B publishers. So sales teams continued to milk it.

The recession changed all that, because it took the legs out from under print advertising. American Business Media recently announced that B2B print revenues fell 24 percent in 2009, to $7.5 billion from $9.9 billion in 2008. According to ABM, print accounted for just under 36 percent of all B2B revenues, trailing trade shows ($9.4 billion, or 45 percent) but still ahead of digital revenues ($4 billion, or 19.1 percent). Last week, Folio offered a slightly different perspective, generating some headlines by citing survey results indicating that print will drop below 50 percent of B2B publishers’ total revenues this year for the first time.

Larger publishers seem to have made the transition more quickly. Last year, market research firm Outsell surveyed “the top 44” B2B publishers and found that print revenues made up just 40 percent of their aggregate revenues.

IDG, a leading technology publisher, made the “crossover” in 2008, when online revenues surpassed print revenues for the first time. The current split at the tech publisher is about 50% online, 35% print and 15% from events – quite a change from 2002, when 86 percent of revenue from IDG publications came from print. I worked at IDG from 2004-2006, during what was arguably the most difficult part of their transition, both culturally and fiscally. It was not pretty, but the company is now viewed as a shining example of a B2B publishes that “gets” digital.

IDG’s digital transition has been led not by online display advertising, but by the wild success of its lead-generation business. It has also continued to diversify –  creating its own vertical ad network, for example – while continuing a sometimes painful restructuring of the organization to align with its Web-centric approach.

Compared to some B2B publishers, particularly in the tech space, IDG was actually behind in adopting a “Web-first” business philosophy. But it made a successful transition because it combined innovative thinking with some hard decisions about the makeup of its organization. For other B2B publishers that have continued to lag in their transition, the current advertising landscape underscores what most have known for some time: It’s time to give up the print binky and develop a more balanced revenue mix. Your future depends on it.

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