Revealing ‘revenue per user’ trends for B-to-B brands

Back when business-to-business media was a synonym for “trade press” – that is, for print magazines – it was pretty easy to evaluate performance. After all, everyone was in essentially the same line of work. ABM used to produce benchmark studies on profitability for magazines based on total ad revenue, subscription fees, circulation categories, paper and printing costs, and the like. But now the trade press is many different things. Specialty newsletters, trade shows, web sites, mobile apps, conferences, webinars, white papers and of course, still, print magazines all represent business models that defy easy comparison across platforms and media.

One attempt at a common metric for comparison is “revenue per user.” Using the latest data from ABM’s Managing Profits research, it is possible to look at b-to-b brands and analyze the revenue per user metrics across a swath of the industry.

To get at the “user,” we basically added together average monthly print circulation, average monthly website unique visitors and annual event attendee totals. That total represents a brand’s total user base. For 56 brands surveyed in depth, we divided total brand revenue by number of users.

Based on a sum of all revenue and all users across all brands, the average revenue per user in 2012 is $22.97. We also calculated revenue per user for each of the 56 brands individually; the median revenue per user is $31.39. The explanation for the disparity is that a couple of the very highest revenue brands have very low revenue per user, so they bring down the average.

To consider the effect of brand size (i.e., total annual revenue) on revenue per user, we divided the 56 brands into five groups, or quintiles, of 11 brands each (12 in the middle group). From the lowest revenue companies (in the first quintile) to the highest (in the fifth), here is how the revenue per user figures break out:

RPU

All 56 Brands

1st Quintile

2nd Quintile

3rd Quintile

4th Quintile

5th Quintile

Average

$22.97

$7.98

$26.05

$19.15

$30.20

$22.92

Median

$31.39

$9.97

$25.32

$36.07

$32.85

$106.55

The only clear conclusion is that the smallest revenue brands display much lower revenue per user than the other brands – about 50 percent to 66 percent lower, roughly speaking, in the $8 to $10 per user range. For the other quintiles, there is a lot of noise in the data, but revenue per user in the $23 to $28 range is a reasonable rough benchmark, to a first approximation.

The 56 brands analyzed can be considered by primary revenue stream, that is, by the percent of revenue deriving from print, digital and event operations. If more than 50 percent of revenue derives from one of these three streams, then that defines the brand. In this research, there were 34 print brands, 13 digital brands, and 9 event brands. Here is how those revenue per user figures break out:

RPU

All 56 Brands

Print Brands

Digital Brands

Event Brands

Average

$22.97

$24.23

$15.40

$78.71

Median

$31.39

$27.23

$20.49

$508.82

The print revenue per user figures are very close to those for the total survey, because print brands dominate the sample. The data suggests, though, that digital brands deliver lower revenue per user than print brands, following the common wisdom of “print dollars, digital dimes, mobile pennies.” And the data suggests (on a very small sample size) that event brands deliver a much higher revenue per user. Considering the deep engagement of trade show and conference attendees compared with the short attention spans of magazine and website browsers, that too seems to make sense; and it is in line with ABM’s BIN data revealing the huge contribution that event revenue makes to the size of the industry. This research sample, however, did not emphasize event brands.

By Michael Moran Alterio

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