Recommendations, Strategies and How to Implement New Plans to Grow Your Business

BIA Advisory Services along with its The Kelsey Group division featured over 30 speakers at the “Winning Media Strategies 2009” conference held, May 20-22 2009 in Washington D.C.

For those of you who missed the event, it is available on-demand. Speakers covered a range of topics all on the theme of how traditional media should transform their business models to address cyclical and secular changes in the media ecosystem. To be competitive, traditional media companies must become very focused on seeing and understanding the implications of fast evolving audience and advertiser attitudes and behaviors. Companies must redefine themselves as multiplatform media services.

While we cannot do justice to the richness of three days of speakers, we can offer ten take-aways that we feel have profound implications on how traditional media will operate and which ones will succeed. Of course, not all attempts to enter and expand in this new media marketplace will be successful. The time to move into these areas is immediate, or as one football coach coined it, “The future is now!”

1. Consumers are drastically changing their media consumption habits. Consumers have “platform promiscuity,” and now control when-and-where they consume media. Where there was only one screen providing information and entertainment (TV), there are now four screens (TV, PC, Mobile, and additional devices such as iPhone and Personal Navigation Devices). Be aware, it is not just the younger demographic groups that are making these dramatic changes, it is a broad spectrum audience shift. The pattern showing itself in the market is technology leads, audiences eventually aggregate, later still advertisers begin to follow. Last in line are the traditional media companies. It is past time to transform your business models to encompass the new media where your audiences and advertisers already are!
2. In this new media ecosystem, outlets will learn a lot about their users, and that information is very valuable. Analytics, metrics, return on investment, and fast response time are driving advertising decisions. These data-driven services are becoming must-haves from the perspective of advertisers. Knowing who you’re serving and what their behaviors are can be tied directly to economic outcomes for the advertiser and the programmer. Audience databases can be augmented by linking with other databases to extend profiles and create even more value in targeting and tracking behaviors. Maintenance of those databases and capitalizing on that information will be a very important key to success.
3. The recent economic downturn has exacerbated shifts in local media. Local small and medium businesses (SMBs) are forced to reevaluate every dollar of their spending, including the advertising dollars they have been investing in local media for many years. Once the economy comes out of this present downturn, local businesses WILL NOT return to their advertising spending levels and choices of previous years. Instead, they will shift their dollars away from traditional media. This is not a business cycle issue, this is a secular change in the local media ecosystem.
4. All traditional media will see revenue decreases in the next few years. To stay even or grow, they’ll need to transform their operations into viable digital businesses. Overall spending on local media will decrease from $155 billion in 2008 to $144 billion in 2013. Digital media advertising is where the growth will be occurring. Traditional media companies need to think like start-ups, working closely with their technical staffs and businesses strategists so they can sort out what can actually be done and what makes business sense. Fast growing Web 2.0 companies like YouTube attract huge followings but do not generate profits. When planning your transformative strategies, remember: a social phenomenon is not necessarily a business success. Unless you can monetize your audience successfully, it is not a business model.
5. Traditional media are well positioned to transform their operations and move strongly into the digital arena. In many case, the opportunities in the local market are theirs to lose. It is a huge uphill barrier for new entrants. But that is not stopping them and lack of market leadership or effective competitive response from traditional media companies just makes it easier for the start-ups. Traditional media companies have brand names, community ties and a sales force in these local markets. They also have local content that is highly desirable by local consumers, whether it is news, weather, and other local information. While the consequences of failing are huge in today’s economy, the consequences of not experimenting, innovating, and adapting to the new media ecosystem are even worse. To minimize the risks of failing, it is important to partner with other companies that want to work with these traditional media outlets.
6. Traditional media must transform quickly. It is increasingly easy to mount competing video outlets by other players in the local marketplace. Local television stations may only have a few years before they face real competition for reach and advertising revenues from these new local video alternatives. Increasing penetration of broadband data services; streaming audio and video; mobile data plans; easier to use home and now automobile local area networking; and content services “over the top” using Internet rather than satellite, cable or broadcast delivery is becoming the norm. Don’t count on your traditional distribution channel as a barrier to entry in your market. Everyone is going to get “bypassed” by the Internet.
7. Digital sales efforts require focus, whether handled by traditional sales forces, or specialists. If they are sold as part of a package with traditional services, these sales staffs can reposition themselves as “consultative” by their customers, rather than opportunistic. Make your sales offers in the marketplace unique and fight commodity pricing. By having your local sales force sell traditional and new media along with promotions, events and other marketing support, you can be unique. Focus on your clients’ business problems and come to them with solutions for what they need rather than what you have.
8. Traditional media sales forces must develop expertise in all media platforms, understand their clients’ businesses and develop effective solutions. Sales managers must be given bandwidth to focus on the wide array of products or they will lose. Media planning and buying is becoming a complex, multidimensional equation to solve. Training is necessary to make these sales forces successful.
9. The transformation to digital must be embraced by the entire organization, from the Boards of Directors to the salespeople on the street. There has to be a commitment in terms of devoting staff, money, sustained management focus and TIME!!! As one panelist mentioned, and many times later referred to it, it has to be “a business, not a hobby.” Develop your strategies, commit to a business plan and execute in the marketplace.
10. Successful digital operations are launched by those with strong commitments and a PASSION TO SUCCEED. We heard several examples of local media successfully introducing new programs to reach their local communities in many different ways. Some are emphasizing their online products/services first and working backwards with their traditional media platforms. Others are entering this arena with several niche strategies, and when combined are quite successful

Other contributing bloggers were:
Posted by:
Mark R. Fratrik, Vice President, BIA Advisory Services
Peter Krasilovsky, Vice President and Program Director, The Kelsey Group

Tweet this!

Tags: digital media advertising, multiplatform media, New Media, new media ecosystem, traditional media

No Comment