Monday, May 11, 2009

Five Reasons to Temper Cheerfulness in B2B

The general rise in business confidence filled the pages of the Sunday newspapers business sections at the weekend. Share prices have risen in the last few weeks reflecting a growing mood that the worst is over. This is no time for media owners to breath a sigh of relief however.

Even if we accept that this is the bottom of the cycle, it will be at least a year before there is any recovery in the recruitment market. If display advertising recovers at all it will be slow and never to the levels we have previously seen. The demand for online solutions has not gone away and the the revenue models for thes businesses is for most media companies unproven, and even when it is proven its scale will be smaller than the old print model.

Incisive's Tim Weller was speculating at the FIPP conference that the days of the controlled circulation model are numbered, Rupert Murdoch has postulated that his business will move to paid content model (It is often unwise to bet against Murdoch - but surely this hope over experience) Thomson Reuters are veeling confident in their future, and the events model for the likes of UBM is not yet a busted flush and Reeds high value infomation model is dull but solid. But let nobody think that all is well.

Check you business out against these simple questions,
1) Does your business have a lot of debt?
2) Does your business rely on print advertising for more than 30% of its revenue?
3) Is your online revenue less than 25% of your total revenue?
4) Is your total revenue/employee less than £100k/year
5) Do you have the same proportion of your turnover as overhead as you had last year?

If you answer yes to all more than three questions then there is considerable pain yet to be felt.

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