Condé Nast, Meredith, Time Warner and Time Magazines, Martha Stewart Living Omnimedia, Hearst Publishing, Clear Channel, Universal McCann… the list of media companies is growing that are redefining their core business propositions to focus on multi-dimensional marketing platforms and shifting their focus away from traditional advertising and media buying/selling. In this week's subscriber-only Jack Myers Media Business Report, (visit www.jackmyers.com), I shared the economics of why the recent management changes at Hearst, Condé Nast, and Time Warner are positive and demonstrate important industry leadership.
In just the past few weeks, veteran Condé Nast executive David Carey departed to lead Hearst Publishing. Then Condé Nast CEO Chuck Townsend announced a major re-focusing of his business that literally redefined the role of the magazine for publishers, editors, consumers and advertisers. And yesterday, it was announced that former Meredith Publishing president Jack Griffin would assume the presidency of Time Inc. Magazines, replacing Ann Moore.
In each case, the management shift has reflected a move away from traditional media. The organizations involved are making a clear commitment to de-emphasizing their dependence on advertising revenues and increasing their abilities to target "below-the-line" budgets including direct marketing, consumer sales promotion, trade promotion, event, social media, conversational marketing, cause related and even search marketing budgets.
Thanks to digital opportunities, traditional media companies can target and capture a growing share of marketers' non-advertising investments, which represent more than two-thirds of all marketing budgets. A detailed review and forecast of marketer's investments conducted by Jack Myers Media Business Reportestablishes the importance of hedging against continued erosion of advertising spending. The growing supply of digital offerings and the resulting negative impact on traditional media pricing will take a progressive toll on all media.
While traditional media, especially television, can depend on annual growth in the low single digits over the next few years, the long term vitality of the business will depend on creative refocusing of priorities. Based on the recent moves by the leading lights in the magazine publishing business, similar actions can be expected at other media companies as well.
Read Jack's weekly commentary at www.jackmyersthinktank.com andhttp://www.huffingtonpost.com/jack-myers. Jack Myers' full commentary on this topic, including relevant economic data, is available to corporate subscribers of Jack Myers Media Business Report.