Two studies: Marketers will boost digital ad budgets

In the first quarter of 2013, ABM polled 74 marketers about their expectations for future B-to-B advertising. Separately, Forrester Research polled 56 marketers in the third quarter of 2013 on the same topic. The results showed some deep parallels. Here are some responses to similar questions posed in the ABM research, called The Value of B-to-B, and the Forrester research, called Q3 2013 North American B2B Marketing Budget Online Survey, reported in a white paper called Focus B2B Marketing Budget Gains On Business Outcomes To Succeed In 2014. The Business Marketing Association (BMA) was a partner in both studies.

MARKETER BUDGETS ON THE RISE

Both research projects asked marketers to estimate their future budgets:

ABM Value of B-to-B Marketer Budget Expectations

Forrester Research Marketer Budget Expectations

Both surveys show that ad budgets are on the rise. The later research shows a smaller forecasted rise, so the trendline is for continuing growth in marketer budgets, although perhaps at a decelerating pace.

DIGITAL SPENDING A PRIORITY

The two studies also asked marketers about their priorities for future spending, that is, detailing areas in which they expect to increase and decrease spending:

ABM Value of B-to-B Marketer Focus Areas

Forrester Research Marketer Focus Areas

Here too we see similar trends: Digital ad budgets are on the rise across the board. More marketers plan to decrease their traditional print advertising than plan to increase it.

One major difference: Forrester found little support for face-to-face events (30 percent plan to decrease spending vs 21 percent planning an increase), while ABM found much more support for events (only 9 percent planning to spend less, with 38 percent planning to spend more).

RESEARCH FIRM FORRESTER URGES MORE SPENDING ON RESEARCH

One major “key takeaway” not supported by either research study: Forrester emphasizes that “CMOs must focus budget choices on customer engagement,” including “thought leadership.” Deep into the report, Forrester explains this takeaway: “Forrester believes that the survey reflects more conservative responses than we will see play out in practice.” Unsupported by its own results, then, Forrester advises CMOs to prioritize regional shows over national, to optimize digital and social, and to focus content creation on thought leadership.

“Thought leadership” means “CMOs will need to concentrate content marketing efforts on independent customer-centered research.” Or in other words, independent research firm Forrester advises CMOs to spend more on independent research, based on no actual research.

In related news, McDonalds top execs urge consumers to eat more hamburgers. Also, Rolling Stone Magazine says “Like a Rolling Stone” is the greatest song of all time.

By Michael Moran Alterio

SIIA/ABM joins appeal of recent Postal Service rate hike

D14-1-28-LeDucraft postal reform legislation would dramatically increase rates for mailers

by David LeDuc, Senior Director, Public Policy, SIIA

Jan. 28, 2014 – As reported in late 2013, SIIA/ABM and other companies throughout the business media world were very disappointed that the Postal Regulatory Commission (PRC) announced its approval of an exigent rate increase of 4.3 percent, which combined with the previously approved CPI increase of 1.7 percent equals a 6.0 percent rate increase.

On Thursday, January 23, 2014, SIIA/ABM joined with a broad coalition of postal customers and suppliers in filing an appeal to overturn the PRC exigent rate increase. The appeal is sponsored by companies and mailer groups that represent every major class of mail and the majority of mail volume. The PRC justified the rate hike as an emergency measure to offset losses the 2007-2009 recession inflicted on the USPS. However, it is argued that the main cause of the Postal Service’s losses in recent years is the public’s increased use of the internet instead of mail, coupled with the continued inefficiency of postal service operations. The legislation as it exists was designed to prevent the Postal Service from recovering this kind of loss through above-inflation rate increases.

On the legislative front, SIIA/ABM has been working on its own, and with other mailing groups, over the last three years to pass postal legislation that will “right-size” the postal service, guard against service standard degradation, enact needed reforms and protect the current CPI-based postal rate-cap. SIIA/ABM has also been working alongside other stakeholders representing classes of mail the postal service has deemed not to meet attributable costs in order to oppose any additional rate increases of such.

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World trends suggest Internet ads will outsell magazines and newspapers by 2015

In its latest World Magazine Trends report, worldwide magazine media association FIPP emphasizes the shift from print to digital as one of the most important revenue trends. FIPP estimates that worldwide ad revenue from digital sources currently outpaces that from print newspapers. And FIPP predicts that, globally, “Internet advertising will increase its share of the ad market from 18.4 percent in 2012 to 24.6 percent in 2015 … exceeding the combined total of newspaper and magazine advertising.” That’s for a combined worldwide media market that includes subscription and advertising revenue for print, digital and events with an aggregate size over $500 billion U.S. dollars.

The data on worldwide print vs digital b-to-b ad revenue over time shows illustrates this trend:

global print and digital ad revenue 2008-2015
*in millions of 2012 U.S. dollars.

FIPP estimates that b-to-b ad sales generally make up about 20 percent of a $100 billion global magazine market. That business-to-business market is centered in Western Europe, North America, and, to a lesser extent, Asia and the Pacific, as illustrated in this chart of market share by region:

global print and digital ad revenue market breakdown by region

FIPP World Magazine Trends 2013-14FIPP’s data dives deeply into specifics on 50-plus countries, with U.S. b-to-b data supplied by ABM. The report is available online and in print, and as a courtesy to ABM and SIIA, members can purchase the report with a 20 percent discount. For more information on FIPP World Magazine Trends 2013-14, contact FIPP’s Helen Bland by email at helen@fipp.com, and mention that you are an SIIA member.

By Michael Moran Alterio

High renewal rates offer data products resiliency vs recessions

One of the strengths of the business information segment is that business consumers of data products usually need access to data on a recurring basis, and they need the most current information available. That sets business information services as prime sources of recurring revenue for publishers of the service. Success in obtaining that recurring revenue can be measured through renewal rate, and data services are exemplified by high renewal rates. Data customers come to rely on data services and see them as essential tools; even in depressed economies, renewal rates show remarkable resiliency.

Looking at two research projects conducted independently by ABM and InfoCommerce last year, respondents offered benchmark results in line with these ideas, in the form of high renewal rates and long duration subscriptions. Surveying ABM members with significant data business, the research found 80 percent to 81 percent renewal rates on a unit basis, and 82 percent to 85 percent renewal rates on a dollar basis.

InfoCommerce’s research broke renewal down by company size. Almost a quarter of large companies (over $5 million in annual data revenue) reported renewal rates in the 85 percent to 89 percent range; 35 percent reported renewals in the 90 percent to 94 percent range; and 29 percent reported renewal rates in the 95 percent to 100 percent range. That means 86 percent of large companies report renewal rates of 85+ percent. For companies under $1 million in annual sales, 80 percent of small companies reported renewal rates in the 85+ percent range.

This benchmark result – that typical renewal rates for data products usually top 80 percent, and often edge even higher – is a point of congruence between the ABM and InfoCommerce research.

InfoCommerce also reports that the average life of a subscription is two to three years, and that may be an underestimate. If a subscribing employee leaves a company and his or her replacement purchases the data product, it may register as new subscription, although the company continues to use the service.

The hallmark of business information products is that they are resistant – albeit not immune – to tough economic circumstances. While marketers and vendors may perceive advertising budgets as fat to be trimmed as needed, or see events as luxuries that can be cancelled, data products are more commonly viewed as essential tools that are crucial to core business interests. Moreover, for that reason, as business conditions improve after a recession, data consumers tend to return relatively quickly to products that they had dropped when times were tougher.

For more information on this research and on trends in business information, download ABM’s free white paper, to be released at the end of the month, here.

By Michael Moran Alterio

Beyond the white paper: content marketing that truly engages

When trade publishers think of marketing services and creating content for clients first thoughts are often custom newsletters, white papers and webinars. But, have you considered video? What about an app? And do you truly know the role of each of your content pieces and how it pushes a sale down the funnel?

During a recent ABM event, business-to-business marketers and agencies met with publishers to discuss the best types of content and how they help the ultimate goal of making a sale.

It’s no surprise that newsletters (and other content that require registration) lead the content marketing mix, noted Kevin Nalty, b-to-b marketing consultant, at the ABM and ISBM Brand Consortium last month. Nearly all of business-to-business marketers use content marketing for lead generation and almost half of b-to-b marketers choose lead gen as the number one goal.

“But is it fair to measure leads alone?” asked Nalty.

What about measuring how well you educate? How well you inspire? How well you entertain? These measurements, while not as concrete as leads, can also push a sale down the funnel, explained Nalty.
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Content aggregators? Definitely foes!

I went to our Executive Forum keynote, where Dan Roth, head of LinkedIn’s content strategy, talked about the ways publishers can work with LinkedIn to grow their audiences and gain exposure among business professionals. His keynote was titled, “LinkedIn: Friend AND Foe?”

I was curious going into the session, hoping to hear what LinkedIn is planning next. I thought it was exciting to think that LinkedIn was branching out from networking and job hunting to content, especially since Roth’s background is as a great writer – Roth got his start reporting at Forbes and Wired, and then became managing editor at Fortune.com.

But the takeaways I got from his keynote evoked current trends that actually devalue the work he himself used to do. Here’s my take on what he said:

• As business media evolves, the conversations about the events of the day are as valuable as the primary reporting of the events. “The reader sees himself as equal in authority to the author of the article,” Roth said. LinkedIn is hoping to leverage more reader-generated content as LinkedIn users engage in conversations about, say, articles from content publishing companies. Note that LinkedIn members contribute this valuable content for free.

• LinkedIn is soliciting engaging essays from “influencers” and “thought leaders,” big names like Jack Welch, Richard Branson, Bill Gates and T. Boone Pickens. All of whom contribute their words for free. Oh, sorry, I mean for exposure and metrics around who is reading their insights. But these influencers see value in it.

• LinkedIn also loves it when publishers use their “InShare” buttons to send metrics about readers back to LinkedIn, and where LinkedIn users are having conversations … in LinkedIn groups and in their content feeds that they share with other users. Again, LinkedIn does not pay publishers for any of this.

• LinkedIn is launching a new feature, now in beta, where publishers can give LinkedIn their full RSS feed, as much content as they want, to run on publisher LinkedIn pages. Publishers can also accessorize these pages with photos, graphics, and other content. In exchange for letting publishers put their content on LinkedIn, publishers get detailed metrics on who is viewing, using, and talking about the publishers’ content. No money changes hands, of course. And due to privacy considerations, odds are LinkedIn will not share the actual profiles of readers. So no lead gen opportunities there.

So what are the great content initiatives at LinkedIn? Get important people to contribute content for free. Get users to comment and converse on this content for free. And get publishers to contribute content for free. Use this content to bring users to LinkedIn every day.
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