Monday, January 28, 2008

Is Trade Publishing a Canary in a Coal Mine?

Is Trade Publishing a Canary in a Coal Mine?
Posted by Jeremy Greenfield
I had lunch on Monday with the Steve Cohn (EIC of min), and the editor, publisher, and president of a very big, very well-known, and very old gentleman's magazine at a restaurant in the McGraw-Hill building. Of course, we talked about their magazine, the Giants game, and consumer-side gossip. But one topic of conversation that kept on coming up was the state of trade publishing in 2008. We talked first about BusinessWeek and the plight of the weekly in general. Then we talked about M&A in the B2B space, and then, finally, the topic of whether trade advertising would be strong in 2008.

Alan Greenspan famously said while chairman of the Federal Reserve that he need only look at the price of scrap metal to determine where the economy was headed. The scrap metal business is a commodity based on several commodities: essentially, the profit that scrap outfits make is dependent on the price of various metals around the world as well as the price of oil, electricity, and various other commodities. Therefore, price of scrap can be a good indicator for the economy as a whole-scrap goes up, economy doing well, scrap goes down, who knows. (I got this from The New Yorker . . . see John Seabrook's article "American Scrap" (abstract) in the 1/14 issue for more. You should also read Ken Auletta's "The Search Party" (complete article) in the same issue-it's about Google's lobbying efforts in Washington.)

Like scrap, trade publishing can be a good indicator of how the economy as a whole is doing. When I look at our exclusive min's b2b Boxscores and see that the building and construction category is down as a whole about 10%, well, that indicates something to me. Just for fun, I'll give you a quick run down of how all of our categories are doing (change is in ad pages year-to-date through November 2007, Source: IMS/The Auditor, except Business/Horizontal, which is provided by min):

Advertising & Marketing: +1.66% (A strong year in advertising has bolstered some of the big books in this category)

Automotive: -2.32% (More on this category in this week's min's b2b)

Banking & Finance: -.60% (Something tells me that some books in this category will be hit hard in 2008)

For the roundup of the rest of our categories, click below . . .

Broadcast Video: -19.5% (This category has been hit hard by cable network carrier saturation. More in this week's min's b2b)

Building & Construction: -9.46% (This one's obvious . . . and is being bolstered by commercial construction)

Business/Horizontal (Jan-Dec, Source: min): -9.13% (More on this category in this week's min's b2b)

Computing: -22.96% (But, in related news, most of the books here are just killing online . . . so I hear)

Developers Technical: -3.77% (Some books in this category are seeing a resurgence in print)

Electronic: -8.54% (Internet)

Engineering & Manufacturing:-6.88% (This year's decline is part of a long-term trend in this industry-not as much in the way it markets: the big boys are still holding their own)

Fashion & Design: -7.22%(While the graphics/design books are doing well, the fashion trades aren't as much)

Food: Retail:-2.22%(While life has been tough on the supermarket industry this year, the convenience store/petroleum industry has benefited from high gas prices and innovations in basic business practices and store services)

Food: Service/Restaurants: +.82 (A few books that have had several bad years in a row are coming back)

Food: Processing: +3.66 (More on this category in this week's min's b2b)

Government: -10.54% (Gov IT books are computing books this year)

Healthcare: -3.32 (Pharm)

Pharmaceutical: -5.16% (Pharm)

Telecommunications: -12.40% (Wireless books are hard hit in 2007)

Transportation: -9.76% (Oil prices and Pacific port overcrowding have squeezed Pacific and air marketing budgets-Gulf is up)

Travel/Lodging/Hospitality: -3.29% (Travel agent books are bringing an otherwise healthy category down)

OVERALL: The min's b2b index of 300+ trades is down 8.17% in ad pages through November 2007. I smell gas.

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