The thriving trade magazine sector is at the centre of a new round of take-overs and mergers, with private equity group Apax last week reportedly seeking to buy EMAP’s business-to-business division for £1.3bn.
EMAP is considering selling or demerging all its assets and analysts say its business publishing division is its strongest offering, with the £1.3bn price tag larger than its magazine segment worth £900m and £400m radio arm.
The B2B unit, which includes specialist magazines such as Nursing Times, Drapers and Broadcast and runs lucrative conferences and events, is considered to be the star performer at EMAP, acccounting for nearly half of the group’s profits last year.
The approach from Apax attests to the rude health of B2B media and comes after a spate of mergers and acquisitions across the sector. This year Apax-owned Incisive Media bought VNU Business Publications, ALM and Global Technology forum while Informa purchased Datamonitor. More recently, Reuters was bought by Thomson in a $17bn (£8.4bn) deal.
B2B media has bounced back after it was hit by the growth of online job search sites at the turn of the century. The sector lost revenue from the recruitment pages of its print magazines and was forced to come up with alternative ways of securing earnings.
Head of business media and communications director at the Periodical Publishers Association (PPA) Fay Delavault says business media companies these days do not think of themselves just as print on paper publishers although it is still an integral part of many business media providers’ business models. Advertisers and sponsors can now reach their audiences through print, online and face-to-face mediums. This new model also encompasses paid-for content including subscription, pay-per-view and licensing.
Delavault thinks this approach will guarantee the continuous innovation of business media alongside the development of additional revenue streams. “It’s the balance of content, communities and commerce along with the benefit of a trusted brand and heritage,” she says. In 2005, the PPA valued the business media sector to be worth £17bn and now estimates it to be closer to £20bn.
She says there has never been so much financial interest in the sector before and it doesn’t seem to be tailing off.
Future UK chief executive Robert Price says the future for B2B media is bright and there is a lot to be done in spite of the overall economic climate. “The market is expanding because of the way we can deliver the content via online as well as through print media. B2B is more mature in this area than business to consumer media (B2C) at this stage so it has less challenges to face,” he says.
From publishers to media providers
B2B titles have also taken advantage of the trust and communities related to their brands by expanding their product portfolio even further than online and allowing themselves to become business media providers rather than just publishers. These strategies include conferences and specific research tools catering for their communities such as the ones CMPi developed for the GP readership of Pulse. Reed Business Information has also created virtual tours of commercial property through Estates Gazette interactive while Incisive Media’s Accountancy Age now broadcasts web-streamed TV from its own studios.
MediaCom press manager Max Stephenson says the media agency created a specialist business division at the end of last year that specialises in B2B clients in the UK and internationally. He says: “The sector used to be a sleeping giant but it has woken up in recent years and become a very active and powerful force for advertisers. It is an integrated platform that allows advertisers to develop a closer relationship with their clients.”
Numis Securities media analyst Lorna Tilbian says one of the main drivers within the B2B industry is the corporate cycle rather than the consumer spend. In fact, the B2B sector has been one of the company’s preferred areas of investment for some time because of the “favourable health of its corporate budgets” and the company’s belief that the structural challenges facing B2B are less severe than those facing B2C media.