Revenue Diversification Remains Challenging for B2B Publishers

folio-b2b-publishers-revenue-source-in-2011-may2012.jpgB2B publishers, particularly smaller publishers with less than $5M in annual revenues, are having trouble diversifying their revenue sources away from print advertising, finds FOLIO: magazine [pdf] in its annual B2B CEO survey released in May 2012. Print advertising was the dominant source of revenue for the smaller publishers, at 59% share, with only e-media (13%) also accounting for a double-digit share of revenues. Among larger publishers (more than $5M in revenues), print advertising accounted for a comparatively smaller share, yet remained dominant at 47% of revenues, ahead of e-media (17%) and events (14%). The share of large publishers’ revenues accounted for by e-media actually fell 2% points from 2010, while print advertising’s share among smaller publishers grew 2% points.

E-Media Grows Fastest

Data from the survey indicates that print advertising may account for the lion’s share of B2B publishers’ revenues, but e-media is the fastest-growing part of their business. 51% of the smaller publishers said that online grew fastest for them in 2011, more than double those who said print advertising grew fastest (25%), and almost triple those who indicated events to be the most rapidly growing (18%).

Among larger publishers, an impressive 73% said that online grew fastest, while 40% pointed to events and 16% to print advertising.

Outlook is Overwhelmingly Favorable

The majority of small and large publishers expect their revenue to increase this year, at 74% and 86%, respectively. In fact, 46% of smaller publishers forecast a revenue increase of at least 10%, compared to 29% of their larger counterparts.

In terms of anticipated sources of increased revenue, online media takes top billing among both small and large publishers, at 65% and 86% of respondents, respectively. Smaller publishers are more likely than larger publishers to expect increased revenues from new print advertisers (57% vs. 46%), while the larger publishers are much more likely to predict increased revenues from events (56% vs. 24%).

According to an April 2012 forecast from Veronis Suhler Stevenson, B2B media revenues will grow 5.5% this year.

Other Findings:

  • 14% of the smaller publishers said they were not profitable in 2011, compared to 4% of the larger publishers. A plurality of the former group said their profits were either 10-14% or 5-9% (both at 19%), while a plurality of the latter group said their profits were 10-14% (24%).
  • Online was the most commonly-cited profitable source among small publishers, by 17.4%. Slightly more large publishers saw events as profitable than online (21.2% vs. 20.4%).
  • 27% of the small publishers said they invested $10-25,000 in new technology in 2011, while 35% spent less than $10,000. Among the larger publishers, 53% said they invested more than $100,000 in new technology.
  • Computer hardware/software was the biggest technological investment for the largest proportion of small (35%) and large (24%) publishers.
  • Sales (33%) is the area most commonly slated for hiring among small publishers, while marketing (45%) is the leading area among large publishers.
  • Increasing profitability (47%) and revenue growth (46%) are roughly on par among small publishers when it comes to identifying their top 3 priorities for this year, with revenue growth slightly more popular than profitability among large publishers (58% vs. 53%).

About the Data: The survey sample of 1,000 was selected by FOLIO: and Readex Research from all of FOLIO:’s domestic subscribers with executive management job titles who classified their company’s primary focus as either B2B publishing or a mix of B2B and consumer publishing on the FOLIO: subscription form. Data was collected via mail survey from February 2, 2012 to March 8, 2012. The survey was closed for tabulation with 275 usable responses. Results were filtered to include only those 234 respondents who indicated their organization is involved in B2B publishing.