Marketers Discover Media Ownership Adds Compelling Economic Value

PART 8: Major Trends Impacting Media, Agencies and Marketers 2010-2012

Smart marketers are expanding their brand franchises into media enterprises. Retailers from Wal-mart to local bars, convenience stores and gas stations are generating revenues from expanded digital media networks. Shopping malls are servicing shoppers with mobile experiences and promotional apps. For every BudTV failure, there are a dozen marketers implementing sustainable and successful media initiatives, many of which generate non-endemic advertising and promotional revenues and economic value.

Johnson & Johnson owns BabyCenter (www.babycenter.com). Coca-Cola owns and operates its own Digital Network, 28 electronic billboards in 27 markets; the Coke Rewards program is managed as a promotional marketing business; and Coke has at least six mobile apps including Spin the Coke Bottle.Hasbro is launching its new HUBTV Channel in partnership with Discovery Communications. The Pepsi Refresh (www.refresheverything.com) campaign includes an integrated website with detailed background information on hundreds of cause related initiatives in multiple categories: health, arts & culture, food & shelter, the Planet, neighborhoods and education. While P&G has been exiting ownership of television soap operas, they are investing heavily around the globe in media properties including quarterly beauty magazine Rouge, the People's Choice Awards, Home Made Simple www.homemadesimple.com, PetSide www.petside.com in association with NBC, plus mobile apps for Pampers (Hello Baby and My Baby Registry), Tide (Tide Stain Brain), Pringles (Pringoals), Crest (Yuck Mouth), SK-II Korea (Mobile Skincare Counseling). Whole Foods delivers extensive healthy lifestyle media content at its website (www.wholefoodsmarket.com), through multiple blogs, a Facebook fan page and almost a hundred Twitter accounts.

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These are just a small sampling of marketers who are developing, implementing and managing consumer-facing media properties. Sports teams and leagues are recognized and valued more as media companies than consumer marketing franchises. The Yes Network, NFL Network, MLB Network, NBA Network and the expanding array of sports media personify the opportunities inherent in extending valuable brands into media assets. Popular music groups and media companies like Endemoland Fremantle recognize that their long-term economic viability depends on their ability to build sustainable media brands with experiential and merchandising extensions.

Retailers have always monetized (or at least partially funded) their catalogs, circulars and in-store media as revenue-generating media properties, which is why marketers' trade promotion spending continues to represent nearly 25% of their total communications investments – a projected $175 billion in 2012.

As marketers have been expanding their media assets and social media initiatives, they have been discovering a valuable "barter" opportunity with their retail partners. Instead of demanding cash for valuable in-store media real estate and slotting rights, some retailers are quietly and cautiously accepting like-value in marketers' own media offerings. While marketers have been reluctant to integrate retail messaging into their own sites and media properties in fear of regulatory and competitive conflicts, the value of these properties and their potential value to retailers will eventually overcome the obstacles.

Similarly, media companies in search of enhanced partnerships with marketers will enter into cross-promotional programs, exchanging value-for-value with marketers that can deliver large audiences through media assets.

Marketers' investments in media-directed promotions, events and sponsorships, which were once almost exclusively sports and big event focused, are projected by Jack MyersMedia Business Reportto increase 22% annually between 2010 and 2012 to more than $18 billion. Marketers' custom publishing investments, which peaked at $21.5 billion in 2008 are still projected to generate more than $16 billion in 2012.  Marketers' investments in branded entertainment will increase from $3.4 billion in 2004 to a projected $9.3 billion in 2012, according to Jack MyersMedia Business Report. Event and experiential marketing, which will represent nearly $18 billionof marketers' expenditures this year, have traditionally been approached as a series of one-off consumer outreach initiatives. Now they are being reconsidered as renewable and sustainable media properties that can often be partially or completely self-funding. As mobile scanning capabilities in the U.S. become as developed as they are already in several Asian and European countries, both retailers and brand marketers will invest in building direct marketing, couponing and promotional apps that are designed to drive traffic and generate real-time response.

With consumers living in a mash up of apps, blogs, RSS feeds, links, text messages, tweets, self-generated content, social networks and location-based promotion, strong media brands will extend off the screen and page into merchandise and consumer services, while strong product and service brands will morph into media properties. Progressive media companies and marketers will become indistinguishable and undifferentiated. A worthwhile read on this topic is "Every Company is a Media Company" by Tom Foremski.  Foremski accurately points out "When every company is a media company this changes more than just a company's PR/communications department -- it changes nearly every aspect of an organization." He adds, "'Every company is a media company' is the most important business transformation of our times because every company is affected. It is also a massive business opportunity for so many businesses."