Seven Founding Principles of the Future Media Industry: Principle #2
Every major media company, agency and leading national advertiser is seeking solutions for emerging and very serious threats, as underlined by the dire economic forecasts published last week by MyersBizNet . In times of accelerating change and marketplace chaos, companies that fail to aggressively adapt are likely to be passed by competitors who respond forcefully to meet the challenges of the future. Rather than buying and selling impressions and Nielsen rating points, agencies and media sellers need to define a clear and immediate strategy for reinventing their business development and marketing communications. They must identify, advance, implement and effectively communicate business development programs to generate incremental and scalable revenues.
Legacy media companies are under attack as new business models built on expanded supply, programmatic systems, procurement requirements, and new metrics are gaining traction and critical mass. With varying degrees of bravado, investment and reorganization, they are advancing into an unknown future with shields raised and swords unsheathed. They are charging forward, blinded by a digital sun in their eyes, hoping to sustain their traditional hold on the future and slay whatever dragons may appear. To date, this has been an effective strategy: audiences, marketers and Wall St. are following behind. Ahead in the not too distant future, however, are unseen heights to scale, turbulence to survive, and perilous cliffs from which a fall could be fatal.
Are media companies, content producers, agencies, research providers and marketers responding with sufficient speed and vision to the changing media ecosystem? Media companies are trying, building and reacting. But are they truly preparing for the collapse of foundational business models that have served the media industry for more than half a century and are no longer reliable for sustainable growth.
While several media companies, agencies and marketers are responding aggressively to the growing reality of these threats, few if any are prepared for the probability of a free-fall collapse of legacy business models. While corporate leaders from the big media companies, agencies and hot digital players introduce innovative business offers, tests, collaboratives, tools and new organizational structures, there is no evidence that more than a handful of them are truly prepared to confront and survive the dangers that lie ahead. The winners and losers for the next several decades will be decided based on their decisions in the next 48-months, the aggressiveness and determination with which they make and act upon their decisions, and how visionary they prove to be.
Traditional media investments will be focused on achieving greater cost efficiencies and capitalizing on the shift in supply/demand dynamics. Fundamentally, the primary purpose of these budgets will remain yesterday's goals of awareness, reach, frequency and cost efficiencies, with automated/programmatic systems being the primary tool for more effective implementation, resulting in downward pricing pressure on media suppliers.
Principle #2 of the Seven Founding Principles of the Future Media Industry is that below-the-line promotional budgets are the future of above-the-line media companies.
Marketers will shift tomorrow's budget share to media partners that are most able and willing to develop and implement promotional, shopper marketing and brand-centric programs. As technology is put in place to manage transactional planning and buying, media agencies will shift their creative and human resources to enhanced relationships with those media partners that offer scale, quality content, valued audiences, multi-platform media integration and measurement, promotional resources, and specialized teams to service and support these initiatives.
Media companies, marketers and agencies, to maintain and grow market share, need to invest today in tomorrow's growth opportunities and business models. They need to proactively identify and develop incremental and scalable revenue sources accompanied by a restructuring of their organizations to support these new business models.
Read Principle #1 of theSeven Founding Principles of the Future Media Industry: Marketers Will Continue to Desire Premium High Quality TV and Video Content .