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Published: September 9, 2008 at 06:02 AM GMT
Last Updated: September 9, 2008 at 06:02 AM GMT
For more than five decades, the media industry has thrived on internal competition. Demand for advertising inventory across the media landscape has been so strong and sustained that media companies could thrive simply by battling each other for share of available ad budgets. The internecine struggles and competition among media companies that have been the hallmark of more than five decades of media industry growth need to be ended now. Internal warfare that pits network against network, station against station, magazine against magazine, cable against broadcast, radio against newspaper, TV against radio, worked in an age when demand outstripped supply and media costs could continue to rise even in the face of fragmentation. But traditional competitive models are no longer working and will ultimately lead to total commoditization and a Wal-Mart effect throughout the industry.
The battle for competitive share-of-voice has accelerated beyond any marketer's experience and the battle among media suppliers for share-of-market has intensified beyond any media seller's ability to compete solely based on traditional models - unless that seller is the absolute low-cost provider. Traditional business models and traditional relationships based on audience delivery and cost-per-thousand metrics, while still viable, cannot be relied upon to deliver the growth investors demand. A media world increasingly dominated by ad networks, search engines, buy/sell exchanges, and an over-abundance of distressed inventory is a procurement officer's dream. As technology takes hold of media buyer/seller relationships, procurement and optimization will rule. Only the low-cost providers and the strongest differentiated brands will thrive in this new world.
As the resulting competitive lines shift, sales organizations need to focus less on battling their closest competitors and more on building relevant and differentiated values, services and capabilities. Media companies, to maintain investor and advertiser confidence, must demonstrate vision for growth rather than competence at corporate warfare. Content owners need to develop new revenue-generating business models to demonstrate their value to both marketers and investors.
In the next several months in this column I will share new strategies for building media company equity value and for defining the fundamental business models that can drive media values ahead.
About Jack Myers: For more than two decades, Jack Myers has been the media industry's leading analyst, researcher and advisor on relationships among marketers, agencies and media sellers, providing business development services and custom insights on relationship best practices to more than 200 marketers, agencies, media companies and industry service providers. Jack can be reached at firstname.lastname@example.org
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