And the good news? BtoBonline.com is reporting that business-to-business magazine profit margins were clobbered between 1999 and 2003. That’s no surprise. However, the extent of the drop in margins is: from 11% (of ad revenues) to .6% in 2003, according to new profitability report presented at the meeting of American Business Media prepared by The Jordan, Edmiston Group Inc.
During the five-year period covered by the report, the average b-to-b magazine’s ad revenue fell from $3.4 million to $2.8 million, and its EBITDA (earnings before interest, taxes, depreciation and amortization) plummeted from $505,000 to $24,000.
Any silver lining? Well, yes. It’s no longer 2003 and advertising in most business to business categories is rebounding. And, according to Jordan Ediston, a lot of overhead has been cut in the past four years so that when revenues increase, profit margins will be more robust than before.