Business magazines are the second fastest growing advertising medium, according to figures published by the Periodical Publishers Association (PPA). Fuelled in the main by a massive increase in titles (44 per cent since 1987), the strength of the sector looks set for a further boost as more launches are forecast.
This should be good news for advertisers, as it presents them with an even greater choice and, it is claimed, better targeting.
However, a look at many business-to-business campaigns shows that advertisers are relying less on traditional trade media to carry their messages. National press, radio, television and online are increasingly the formats they are turning to.
Advertisers attribute this shift to two main factors: their need to communicate with a more extensive set of audiences and the fact that business people have become busier and so harder to reach in the workplace.
A few years ago, textbook wisdom taught that successful business-to-business advertising recognised the existence of a triumvirate of key players in the buying process: the decision-maker, specifier and influencer. Now advertisers acknowledge that the buying model is more sophisticated and that it varies significantly from sector to sector. For example, when considering decision-makers, advertisers are being forced to distinguish between someone who can decide on strategy and policy changes and someone whose authority only extends to implementation decisions.
The IT industry, which is both the largest and the fastest growing source of business advertising, is possibly one of the most complex. For example, Microsoft identifies five main target audiences, but has to contend with the fact that the relevant job titles vary considerably from one company to another, depending on the size and type of business.
Microsoft director of marketing services Shaun Orpen says: “The decision maker can be anybody from the managing director in a small company to the IT director in a larger company, possibly even the marketing director. In addition, there can be a crossover in roles such as the IT director who is also a consumer at the weekend.”
In fact, the consumer is frequently overlooked as a target group, claims Circus Communications associate partner Sophie Webster. Circus recently launched a corporate advertising campaign for technology solutions company NCR. A secondary objective of the campaign was creating awareness of NCR as a brand among end-user groups.
“Technology now forms so much of the interface between company and customer that in the future it may become a factor in the consumer’s choice of supplier, such as bank or retailer. Consumers may need to know who NCR is,” explains Webster. For this reason, a significant portion of the media budget was dedicated to consumer media. Less than 0.5 per cent was spent on trade press.
There was, says Webster, a good reason for this. NCR wanted to target very senior decision makers, such as chief executives, a group which the industry recognises as one of the most difficult to reach. Circus, therefore, wanted to target people when they are outside their office environment to maximise its chances of being seen. Because it believed the trade press would only deliver the message within the work environment, this route was considered to be less effective. The solution was a mix of local outdoor sites close to target companies’ offices, national press and TV.
Vicky Robinson, press buying manager at media agency New PHD, agrees with the strategy. “It’s good to hit people at as many points as possible, so it’s useful to think in terms of what they are doing during the course of the day, only part of which may be spent in the office. Advertisers are wary of relying on trade press only, as they want to think they are reaching as many people as possible.”
But could this be just an excuse to ask advertisers for ever-increasing budgets? “There is obviously an element of wastage,” concedes Robinson. “However, people know that it is no longer enough to rely on a single channel if you are trying to reach a wide audience.”
Database marketing may be the answer. NCR’s target audience of just 18 companies in 35 locations in the UK originally persuaded Circus that the solution was a highly targeted campaign, where prospects would be named individuals with known media behaviour. The result would have been a perfectly targeted, one-to-one media campaign, with messages carefully placed to hit each individual as selectively as possible in the right newspaper, the right local radio station and the right poster sites passed en route to work.
The vision is compelling but, sadly, proved unworkable. However, it gives a good indication of how advertisers may soon reap the benefits of both wider media and better targeting without overloading their budgets.
Already some advertisers are questioning the future of trade magazines. The PPA is keen to fight back by demonstrating their high readership levels. Research conducted by NOP for the association in 1996 found that 95 per cent of business and professional people read the publications relevant to their sector, an average of four per person. In addition, 68 per cent regard business magazines as the most important source of information on their industry.
PPA deputy chief executive Peter Dear points out that advertisers should also consider the influence that business magazines have on their readership. “Although business magazines are now one of many ways of getting to an audience, they are still an extremely important one because they have very strong brand values. If an ad appears in a business magazine it is imbued with the credibility and authority that the title has with its target audience.”
Andrea Cusack, marketing manager for small or medium enterprises (SMEs) UK and Ireland at Dell Computers, agrees that the choice of medium is a key part of the message. “Our main media are the national and PC press. The PC press is important because the magazines regularly review our products and it is extremely powerful to have our call to action in the same publication as the testimonial.”
But Cusack believes that the national press is not an ideal route to SMEs as it is still not sufficiently IT literate. “It’s certainly not a closed door,” she admits. “National newspapers have a tremendous opportunity to add value by educating their readers in how to use and benefit from IT. Where they do, we are definitely more interested, but they still must have the right circulation value.”
However, measuring and comparing circulation value is not as easy as many advertisers would wish. “Generally speaking, smaller titles don’t have the data,” points out New PHD’s Robinson. “Research is often skewed and you have to rely on personal contacts who can identify the best titles to be in.”
Another obstacle is that many controlled circulation titles have good data on who they are mailing to, but less on who actually reads the title and what their perceptions are. Many advertisers feel that the only solution is to conduct their own research. For this reason, the PPA has been working closely with the Audit Bureau of Circulations (ABC) to raise the profile of its independent business media audits. The results have been positive and ABC believes that 55 per cent of the business magazine market has so far been covered. And the pressure is on for trade titles to co-operate: research conducted by NOP for the PPA shows that a quarter of advertisers claim to boycott unaudited titles.
The fact remains, however, that publishers are nervous about the growing interest in other media. According to the PPA, 84 per cent of business publishers believe that an expenditure shift away from advertising will be one of the most significant factors affecting their future profitability. As a result, many have extended into areas such as exhibitions and online marketing, and are selling integrated communications packages often under the original magazine brand.
The PPA’s Dear believes that this is what advertisers are looking for. “Our research shows that advertisers are very supportive of these product clusters,” he says.
One of the biggest growth areas has been electronic publishing. According to the PPA, nearly half of publishers produced electronic products in 1996, and this is forecast to rise to 64 per cent in 2001.
Dell’s experience supports this. Up to 30 per cent of Dell’s global revenue is currently generated through online marketing, but Cusack insists that there will always be a role for traditional media. “The two are very closely linked. Our research shows that people will still read a PC magazine before going to the Internet.”
However, both Cusack and Microsoft’s Orpen agree that innovation in the use of media and better understanding of the target are key to staying ahead of the game. “Lots of companies want these people’s time, not just our competitors,” says Orpen, “so we have to focus on what to do to get our voice heard over everyone else’s.”
So does this mean that there is only a limited future for the trade press? “Absolutely not,” retorts Orpen. “If people read trade press, then we need to be there. The challenge is balancing it with other media.”