Business press study

STARCH INFORMATION SOURCES STUDY 1996 – 2004 EXECUTIVE SUMMARY

We acknowledge the financial support of the Government of Canada through the Canada Magazine Fund for this project.

Prepared for: Canadian Business Press 4195 Dundas Street West, Suite 346 Toronto, ON M8X 1Y4

April 23, 2004

CONTENTS

Page Background ..............................................................................................

1

How The Studies Were Conducted ..........................................................

1

Industrial/Professional Markets Covered.................................................

1

Information Sources Measured ................................................................

2

Executive Summary Key Findings ............................................................................................ 3, 4 Internet Growth By Market Sector ..........................................................

5

Rating and Ranking of Business Publications .........................................

6

Top Three Information Sources By Market (2004) .................................

7

Top Three Markets By Information Source (2004) .................................

8

Importance of Canadian Business Publications .......................................

9

Summary .................................................................................................. 10, 11

Starch Information Sources Study

Background:

The first Information Sources Study was conducted by Starch Research in Canada in 1996. The objective was to determine the role the business press played in the communication of business information to key purchase decision makers. Additionally, the study was designed to measure the usefulness of all media that buyers might use.

The study also sought to explore how the various media and information sources were employed in very different industries and professions.

The follow up studies in 2000 and 2004 revealed a lot about the role of Business Publications during a period when the Internet experienced explosive growth.

How The Studies Were Conducted: *

Direct mail to random sample of business decision makers.

*

Lists were supplied by 47 CBP member publishers covering seven business/professional categories.

*

Respondents were qualified as “involved in developing specifications, selecting suppliers or approving expenditures in the purchase of products or services for your company or business�.

Industrial/Professional Markets Covered: *

The participating business/professional categories covered in all three studies were: Manufacturing, Retail, Automotive & Trucking, Resources & Construction and Information Technology. Agriculture was added in 2000 and the Medical Market in 2004.

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Starch Information Sources Study

Information Sources Measured: *

Respondents were asked to rate the usefulness of 14 sources of business information covering all major media and forms of marketing communication. The order of presentation was rotated through two questionnaire versions.

Direct mail General Business Publications (Canadian Business, Report on Business, etc…)

Conventions/Seminars General Interest Consumer Magazines (Reader’s Digest, etc…)

Specialized Business Publications or Newspapers Dealing with Your Industry Radio Business Directories The Internet Daily Newspapers Network Television Salespeople Newsmagazines (Time, Maclean’s, etc…)

Specialty Television Trade Shows

*

Additional questions probed whether there were information needs unique to the Canadian market and the importance of having Canadian business publications reporting on the particular industry.

*

Results for each study are reported on sample bases of: 2004 – 1,239 respondents 2000 – 1,279 respondents 1996 – 1,950 respondents

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Starch Information Sources Study

EXECUTIVE SUMMARY Key Findings: Across seven diverse industrial/professional sectors and fourteen different media and information sources, there are seven principal sources that are highly valued and relied upon by business decision makers. Six of these are easily identified as traditional business-to-business media while the seventh, the Internet, has emerged in recent years as a vital and valued information source.

Over the course of eight years (1996 – 2004) and three landmark Information Sources studies, Business Publications rank first as the most useful source of information on products and services purchased. In fact Business Publications have gained significant ground in recent years over Trade Shows, the second ranked information source in all three studies.

More significantly, Business Publications have gained additional ground over the third ranked information source, Salespeople. % Reporting Very Useful 1996

2004 Rank

2000

2004

66%

66%

69%

1

Specialized Business Publications

2

Trade Shows

60

60

56

3

Salespeople

58

55

50

The percentage rating Business Publications “Very Useful” increased from 6 percentage points over Trade Shows in 1996 to 13 percentage points above in 2004.

Similarly, the 8 percentage point increase that Business Publications held over Salespeople in 1996 climbed dramatically to 19 percentage points higher in 2004.

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Starch Information Sources Study

Two economic factors are likely at play here: i)

The high cost of Trade Show participation for exhibitors and visitors alike in a business environment of austerity.

ii)

The ever increasing cost of personal sales calls (upwards of ____ per call) coupled with increasingly hard to reach customers. A prime example is the percent of “noncallable” physicians in the medical profession (currently about ___% of all Doctors).

In 1996, the Internet was barely on the horizon. It had a Usefulness Rating of only 22%, and an average rating of 3.6 out of 10. It ranked 8th or below in all business categories except Information Technology which had not only already adopted the technology but contributed to its rapid growth in business and industry. % Reporting Very Useful 2004 Rank

1996

2000

2004

22%

53%

53%

4

Internet

5

Conventions/Seminars

49

49

50

6

Direct Mail

32

35

35

7

Business Directories

35

31

29

The Internet leapfrogged Conventions/Seminars, Direct Mail and Business Directories in usefulness to business decision makers. The Internet’s speed and immediacy have likely been the cause of some of the decline experienced by business directories.

It is noteworthy at least directionally that the relative Usefulness of the Internet remained at 53% between 2000 and 2004. In this same period Business Publications moved its Usefulness rating from 66% to 69%.

Business Publications remain the clear leader and appears to be a medium that complements the Internet. Business publications are responsible for creating a significant amount of website traffic. Savvy industrial marketers use their traditional high frequency publication advertising to promote their web sites.

Likewise, web search engines direct traffic back to magazine content that is posted on the Internet, or indeed to the web sites of the business publications themselves.

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Internet Growth By Market Sector: % Rating “Very Useful” and Ranking (out of 14) 1996 (Rank)

2000

(Rank)

2004

(Rank)

53%

(4)

82%

(1)

83%

(1)

Retail

13

(12)

32

(6)

46

(4)

Automotive & Trucking

9

(14)

38

(6)

46

(4)

Manufacturing

18

(8)

55

(4)

57

(3)

Resources & Construction

15

(8)

56

(5)

59

(3)

Agriculture

n/a

n/a

27

(9)

Medical

n/a

n/a

32

(5)

Information Technology

The IT sector naturally places the highest value on the Internet. Other sectors however have been quick to adapt to the technology and the Internet’s usefulness. While the nature of Retail requires much face-to-face contact, the Internet went from 13% to 46% over 8 years. The pattern in Automotive & Trucking has been similar, increasing from 9% to 46% in the same period.

Manufacturing and Resources & Construction shared similar patterns of growth as they use the Internet to source suppliers, leads and tenders. Between 1996 and 2004, Manufacturing ratings of Internet Usefulness climbed from 18% to 57%. Resources & Construction went from 15% to 59%.

The most noteworthy part of this is that the bulk of Internet growth occurred between 1996 and 2000, with very limited growth over the past four years.

While Internet usage will continue to evolve in certain sectors, it appears to have reached a plateau and found its niche with business decision makers.

Part of its success has been the way that marketers have used business publication advertising to generate web site traffic.

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Starch Information Sources Study

Rating and Ranking of Business Publications:

Business Publications Industry

Very Useful

Average

78%

7.5

1

Resources & Construction

73

7.4

1

Information Technology

72

7.1

2 (after Internet)

Automotive & Trucking

65

7.0

1

Retail

66

6.9

Medical Profession

63

6.9

3 (after Salespeople & Trade shows) 1

Manufacturing

60

6.7

1

Agriculture

Rank

While Usefulness ratings vary according to the type of industry, Business Publications are the most useful information source in five out of seven markets measured. They are second only to Internet in the Information and Technology sector.

In Retail, a sector requiring significant face-to-face dealings, Business Publications follow high cost low frequency alternatives, Salespeople and Trade Shows.

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Starch Information Sources Study

Top Three Information Sources By Market (2004):

Business Publications rank highly in all sectors and support other marketing communication initiatives.

Manufacturing Business Publications Salespeople Trade Shows

Automotive & Trucking Business Publications Salespeople Trade Shows

Resources & Construction Business Publications Salespeople Trade Shows

Medical Business Publications Conventions/Seminars Direct Mail

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Very Useful

Avg.

60% 57 61

6.7 6.6 6.5

Very Useful

Avg.

65% 51 48

7.0 6.1 5.9

Very Useful

Avg.

73% 60 59

7.4 6.7 6.5

Very Useful

Avg.

63% 69 32

6.9 6.8 5.1

Retail Salespeople Trade Shows Business Publications

Information Technology Internet Business Publications Trade Shows

Agriculture Business Publications Trade Shows Radio

Very Useful

Avg.

69% 68 66

7.2 7.0 6.9

Very Useful

Avg.

83% 72 63

8.0 7.1 6.8

Very Useful

Avg.

78% 60 44

7.5 6.7 6.6

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Starch Information Sources Study

Top Three Markets By Information Sources (2004):

The other traditional forms of business-to-business communication have varying degrees of usefulness across industry groups. No single medium performs across all industry sectors like Business Publications.

Direct Mail Medical Automotive & Trucking Agriculture

(Rank)

Internet

(Rank)

(3) (5) (5)

Information Technology Manufacturing Resources & Construction

(1) (3) (3)

Salespeople Retail Manufacturing Automotive & Trucking

Business Directories (1) (2) (2)

Conventions/Seminars Medical Information Technology Agriculture

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Manufacturing Automotive & Trucking Resources & Construction

(6) (7) (7)

Trade Shows (2) (4) (4)

Retail Agriculture Resources & Construction

(2) (3) (3)

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Starch Information Sources Study

IMPORTANCE OF CANADIAN BUSINESS PUBLICATIONS

HAVE INFORMATION NEEDS UNIQUE TO THE CANADIAN MARKET 60 50

54

52 43

43

40

40 30

39

33

30 20 10 0 T o ta l

R e ta il

In fo rm a tio n

M e d ic a l

T e c h n o lo g y

IMPORTANCE OF HAVING A CANADIAN BUSINESS OR PROFESSIONAL PUBLICATION 100 90 80 70 60 50 40 30 20 10 0

86

Total

79

Manufacturing

85

Retail

87

88

Automotiv e &

Information

Resources &

Trucking

Technology

Construction

82

92

Medical

88

Agriculture

Forty-three percent of business decision makers have information needs that are unique to the Canadian market. Eighty-six percent of decision makers claim it is important to have Canadian business publications in their industry/profession.

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Starch Information Sources Study

Summary: *

Business Publications continue to be the most useful source of information among business decision makers.

*

The nearest competitors to business publications are Salespeople and Trade Shows. They are both extremely high cost and low frequency alternatives. Both often have a very limited reach among the many decision makers in companies.

*

No other medium reaches the vast numbers of buying influences in a single company. High frequency, high retention levels and routing lists within companies mean business publications reach the multiple buying influences that exist in a single company.

*

Business Publications are the logical base buy in any business-to-business marketing communication program.

*

-

highly targeted to buyers in virtually every industrial/professional sector

-

low cost per thousand reach

-

high quality credible environment to showcase products and services.

-

retention of issues for reference creates multiple ad exposure opportunities

-

business publications are the only medium with the customer every working day (and often taken home)

-

pass along and routing means readership is generally three times greater than circulation.

Business Publications are the original source of most inquiries and sales. Beyond business reply cards, business publication ads carry fax numbers, 1-800 numbers, e-mail addresses and website addresses. Ads in business publications are the reason these inquiry mechanisms are so successful for advertisers.

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Starch Information Sources Study

*

Business Publications complement all other marketing activities. As the base media buy with the broadest coverage, it supports sales force activity, promotes trade shows, drives website traffic, and promotes conferences/seminars.

*

Business Publications are the main medium for creating brand awareness. The only medium where product benefits can be presented in detail.

*

Relevant high quality editorial environments create a credible context for advertisers. Readers are interested and involved and advertisers benefit from that relationship and trust.

*

Business Publication reading requires the undivided attention of the reader. This results in more concentration and better ad recall than other media can provide.

*

As the lowest cost, highest frequency and highest reach medium available to business-to-business advertisers, business publications offer the best return on the media investment.

*

Business Publications are the original source of the inquiries that generate sales.

This is why 86% of business buyers claim Canadian Business Publications are important in their industry/profession.

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