Media's Beachfront Property Values are Growing Again as Digital Pennies Become Digital Dollars - Jack Myers

By Jack Myers Jack Myers ThinkTank Archives

Later this month Jack Myers Media Business Report will be publishing the 2010-2012 Media and Advertising Trends Report (www.myersreport.com). The report focuses on the renewed confidence in and recognition of the importance of traditional media real estate by investors, marketers, media content creators and distributors, agencies and regulators.

In 2010, the advertising business has proven to be a leading economic indicator, reversing the five decade pattern during which media and advertising lagged the general economy by an average six months. Although the media industry has suffered through almost two decades of erosion, a sell off of once-precious real estate, a dramatic decline of valuations and multiples, and regulatory destruction and bankruptcies, the economic future is reasonably bright. Myers new Media and Advertising Industry Economic Health Report (www.myersreport.com), due to be released in December, shows that the next decade will be far more robust than the past one for media, advertising and marketing companies. Total marketing expenditures, which grew only 7% between 2000 and 2010, is forecast by Myers to grow 23.4% between 2010 and 2020 on the strength of digital expansion and integration. (Reports will be available exclusively to Jack Myers Media Business Report corporate underwriters. For information visit www.myersreport.com.)

While many traditional media companies will struggle and there will be inevitable consolidation in the digital universe, investors and advertisers who have been questioning the foundations of a multi-trillion dollar segment of the global economy can look to the future with a positive perspective.

A renewed confidence in the fundamental strengths of the media business is translating into a rediscovery of the values inherent in television media, radio, out-of-home and, to a lesser extent, print media. In the great recession of 2009, marketers once again learned the importance to their bottom lines of advertising and gained a renewed respect for its impact. The regulatory environment has shifted to prop up the broadcasting and cable business. After a decade of decline, the valuations of traditional media companies are -- for the most part – slowly growing. After decades of cost-cutting, companies are shifting to a growth mentality. The power of procurement officers, who have been dictating purchasing decisions based on cost controls rather than R-O-I and comparative value, is suddenly on the wane as chief marketing officers are arming themselves with new return-on-investment proof of performance data and as marketers integrate their marketing and sales functions.

Retransmission consent, R-O-I measurement tools, technology and systems advances, the confusing mumbo-jumbo of new media offerings and failed experiments, subscription revenues and other forces are causing regulators, advertisers and investors to the conclusion that the media beachfront property they have been shunning has greater inherent value than many new over-hyped media advances.

Media developments such as online video, social media and mobile are maturing and traditional media companies and marketers are defining strategies to successfully integrate these new tools into their traditional business objectives and measureable R-O-I goals.

Slowly, through integration, digital dimes are becoming digital quarters and on their way to becoming digital dollars.

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