The Urgency Conundrum: Battling Economic Forces While Building for the Future

In December 1862 President Abraham Lincoln wrote in his second annual message to CongressquotThe dogmas of the quiet past are inadequate to the stormy present The occasion is piled high with difficulty and we must rise with the occasion As our case is new so must we think anew and act anew We must disenthrall ourselves and then we shall save our countryquotNearly 150 years later Lincoln39s words are equally relevant not only to the state of the nation but to the state of the media and advertising business It39s perhaps inappropriate to compare the trials and tribulations of the media industry with the confronting realities faced by Presidentelect Barack Obama and those of President Lincoln during the Civil War But we cannot help but connect Presidential actions and decisions to our own daytoday challenges The quotdogmas of the quiet pastquot that offer comfort to media and advertising executives will be proven inadequate to the stormy present and future we face The media and advertising business is struggling with both a cyclical economic downturn and a systemic overhaul of the industrySupply and demand economics are shifting from a marketplace with a history of great demand and limited supply to an oversupplied market with shriveling demand Audience reach can be aggregated through myriad media sources at steadily declining costsperthousand The idea that marketers will increase ad spending in economically depressed times is as outdated as the idea that Americans will go further into debt to sustain their lifestyles and spending patterns And while marketers might very well rely on traditional media in troubled times what happens as advertising executives approach next year39s budget decisions with their businesses still in a free fall Where will they turnMarketers and media companies are troubled and faced with a conundrum How do you deal with the realities of a depressed economy and falling sales How can management both meet shortterm revenue demands and invest in the future How do we quotdisenthrall ourselvesquot from the models and business demands of the past when we depend on these models for our daytoday survival And how can we possibly invest in new strategies and approaches when there is not sufficient budget to support the barest minimum of what we require daytoday to meet our most basic goalsManagers must define and implement two separate and distinct strategies First and foremost is to identify the survival tactics required to maintain revenues and profitability for the next 24 to 36 months At the same time you must design a vision for the future and begin putting in place the foundation on which to build that vision Companies emerge from recessions with visionary products and services that meet their customers39 future needs not with products and services that meet the needs and business models of the past Yet you cannot escape the reality that investing in the future is unlikely to be justified in the current economy So the fundamental question is how can your business invest in the future when you cannot sufficiently invest in meeting your immediate business requirements There are a few answers First reevaluate your immediate business goals Whose goals are they amp8211 those of management and customers or those of Wall Street If your company39s goals are being defined by Wall Street reassess them and if they are unrealistic in the face of the economic downturn redefine them and be as conservative as possible Build your 24month business plan around dedication to meeting the core shortterm business needs of your most important customers What are the core assets and tools required to deliver on your customers39 needs Prioritize these assets and analyze their costs in the context of their value Which of these core assets are also consistent with your longterm business vision and therefore should be maintained and which can be reduced or eliminated Do you have a longterm vision What new investments can be made that both contribute to your shortterm goals and serve as building blocks for your future Do you have the dualmanagement team in place to maximize immediate revenues and to put in place the foundation for your future The skills and competencies are usually very different Are you investing in costsaving and revenuegenerating technology and partnerships that can support shortterm sales goals and enable you to shift resources to longterm strategic needs For at least two decades I have asked the same question of executives quotHow much of your business today is built around traditional media pricing and research models vs how much of your business is based on innovation ideation and differentiationquot The typical response 90 vs 10 has been consistent for the past 20years and remains true even today The 9010 model is acceptable for media and marketers who follow the WalMart model of every day low pricing but even the dynamics around a sustained focus on traditional business rules are changing amp8211 with increased dependence on technology to deliver cost efficiencies And traditional models are no longer acceptable for companies that seek to generate premium value for their products and services Immediate investment with partners that represent the future amp8211 partners such as TiVo and a handful of others amp8211 will prepare you for 2011 and beyond If your longterm vision is to shift from 9010 to 5050 or 6040 you need custom solutions that enable you to transition from here to there whilesuccessfully managing through this depressed economyJack Myers consults with media companies agencies and marketers on defining business solutions and implementing visionary business models He can be contacted at jmjackmyerscom

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The Urgency Conundrum: Battling Economic Forces While Building for the Future

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