NBC Entertainment co-chairman Ben Silverman predicts the economic downturn will cause a "rush to premium content by advertisers." He believes "the NBC Universal model of "leveraging specific pieces of content with specific advertisers… to reach specific audiences and creating platforms for worldwide exploitation" is the best strategy for growth as marketers reduce and refocus their ad budgets.
"In TV today," Silverman commented at last week's Monaco Media Forumin Monte Carlo,
"it's difficult to manage an advertising downturn, but we're developing other businesses." He warned that advertising sales teams must adjust and bring the "siloed" nature of different businesses together by developing "bespoke ideas" and embracing the resources required to push them forward.
News Corp. Europe and Asia CEO James Murdoch, also speaking at the Publicis, Googleand Monacosponsored forum, argued for organizational transformation and long-term commitment to strategic investments.
"People underestimate the importance organizational transformation can have," he commented. "The sharpness of the [economic] experience today causes you to get a handle on your base. It's an urgent priority to get the organization fit."
In considering future acquisitions, Murdoch suggested a go-slow strategy. "We cannot predict today the opportunities that will emerge. There will be real pressure and consolidation. Opportunities will come up in the next two years that might not be available today. Things will be possible we never thought would be possible." Murdoch's short-term strategy is to "push for share… move faster than the competitors… and push our advantages organically where we have them. But we want to be flexible and prepared to respond. Companies that have thrived are those that accelerate the pace of change."
Internet expansion could be a risk because of the explosion of inventory, Murdoch believes. The solution is to develop more assets around "communities of interest -- the core audiences you want to engage with -- and ramp up customer engagement in a big way. If we don't understand how to reach out to customers and be more data driven, we cede the ground to others," he said.
"I hope we never reach the day when emotions can be put through an algorithm," argued Publicis Groupe Chairman Maurice Levy, who delivered the event's closing keynote. "Data is good for reassuring advertisers that people are receiving and relating to messages, but you cannot use "mathematics and clicks to measure the emotional aspects of communications."
Paris-based Publicis, the second largest advertising and marketing agency holding company in the world, is moving from a "communications services" company dependent on hourly fees to a business model that emphasizes value creation beyond communications, said Levy. "We're changing our business model to get more value for services we are providing and to share in our clients' success." He pointed to the Denuo unit of Starcom Mediavest Group as an example of the company's embrace of a new strategy for generating growth by providing intellectual capital in exchange for equity in emerging companies.
In its third year, the Monaco Media Forum was considerably more subdued this year as attendees focused more on monetization and strategies for a recessionary economy than on the euphoric enthusiasm that accompanied the rise of the Internet economy. Since last year's Forum, media and agency valuations have declined precipitously and several attendees and speakers warned of continued ad-spending declines and industry consolidation in 2009. While several entrepreneurs touted their innovative VC-funded efforts, a few of which were very well received (most notably news aggregation service DayLife –www.daylife.com ) the focus was less on deal-making and more on survival strategies. Several registered attendees failed to show up, using cutbacks in travel allowances and the need to stay "close to the office" as their excuse.
Arguably, those who attended gained advantages, intelligence and potential business opportunities. While the MMF could do more to attract senior media, agency and marketing executives and hold them throughout the two-and-a-half day conference, the content was generally thoughtful and relevant. Jack Myers led a panel
focused on projected streaming video economics for 2009, featuring Henrique de Castro, Managing Director European Sales for Google; Nancy Cruickshank, CEO, VideoJug; Dina Kaplan, COO, blip.tv; Mike Volpi, CEO, Joost, and Dan Scheinman, General Manager, Cisco Media Solution. Cisco announced plans to launch an online video platform in 2009. His Serene Highness Prince Albert of Monaco hosted the event and presented his annual MMF Media Prize to Stanford Professor Lawrence Lessig, who developed Creative Commons as an alternative to restrictive copyright protection laws.
Peer-to-peer file sharing of content has increased since the Supreme Court declared it illegal, Lessig pointed out. Prohibition of alcohol failed in the 1920s because it made otherwise law abiding citizens into criminals. Similarly, file sharing now renders a whole generation criminals. "A new architecture of business is required," Lessig recommended.
Jack Myers publishes Jack MyersMedia Business Report and www.jackmyers.com, and provides market strategy advisory services. He can be contacted at jm@jackmyers.com