Economic Recovery Jeopardized by Advertising and Media Industry Struggles. JackMyers Think Tank

The advertising business, arguably the core foundation of capitalism and certainly the lifeblood of the media industry, is facing the greatest challenge in its history. Systems, infrastructures, irrelevant currencies and research, traditional business models and outdated relationships, passive executives, and unrealistic investor demands are locking media companies into a transactional commodity ad business with downward spiraling pricing pressures, constantly renegotiated contracts, and little investment in true return-on-investment metrics. There are far too few lasting partnerships between media and advertisers based on long-term shared business needs and interests. This reality, if not reversed quickly, is potentially the most destructive economic force the media economy faces in the foreseeable future. If marketers are unable to effectively communicate with consumers, the long-term trickle-down impact on the overall economy will be startling.

Except for a few innovative companies, the media industry remains entrenched in dangerously outdated business-to-business relationships that have been surprisingly unresponsive to the impact of digital technology on consumers' exposure to media and advertising. There are solutions, and small steps are being taken by some media, advertising and entertainment companies - those that are investing in innovation and visionary models for rebuilding their relationships for the future.

Relationships are the future of the advertising and media business. It sounds self-evident, but it's not. In fact, while relationships among individuals in the advertising business have been strong and lasting, traditional business models between media companies and marketers rely primarily on transactional commoditized pricing and audience-delivery negotiations. In recent years, some marketing elements, advanced research capabilities and value-added components have been layered-on -- and companies like ESPN and Meredith Publishing have broken the organizational mold. But these are nuances in a highly rigid and resistant community that depends on continuity and tradition, and most breaks from tradition are overly moderated and are not scalable. This must change.

As I have written for the past decade about what I call the "Relationship Age", I've realized that many companies recognize the need for change but are at an impasse in their efforts to build new relationship models without significant added costs and without deconstructing their existing businesses.

Even today, when it is more apparent than ever how imperative it is that traditional relationships be reinvented, most companies continue to pay lip service to change, generate press releases with short-term offerings that are innovative only on the surface, and hire visible but often powerless executives as change agents. They take baby steps when giant leaps are called for.

Study the relationships among media sellers, marketers and agencies and they remain largely unchanged for the past five decades. More than 80 percent of every dollar spent on advertising buys a pre-determined number of ad impressions among a target audience. The deals are virtually interchangeable from media company to company and even medium to medium. While media and marketers have had sustained relationships for years, there is little loyalty and it is extremely rare that CEOs - or even senior marketing executives -- are ever engaged with each other except for charity events, golf games and short-term deals. This has to change if media companies are to survive and if advertising is to continue to drive business and a successful capitalist economy positively and responsively forward.

I have dedicated my career to this belief and to the companies that are committed to building new solutions for the digital future. I'm committing to putting into practice the three decades of experience I've had forecasting, supporting and leading early stage developments in the media, advertising and entertainment businesses. I will be working with companies to explore how I can contribute to their equity value by fostering and facilitating relationships, intelligent collaboration, partnerships and investments. Through my commentaries and publishing resources, I will continue to take strong advocacy positions on industry values, my vision of the future, and my passion for this business and its people.

Only a handful of media companies have made the investments in organizational resources required to support building long-term partnerships with marketers. And vice versa. Most media companies today are being confronted by the reality of underperformance and unachievable growth requirements. Digital media companies will under-perform ad-revenue expectations if they continue to define themselves with outdated values, metrics and marketing initiatives that are undifferentiated from those of traditional transaction-based mass media.

How can I contribute to changing this paradigm? Over the past 30 years, I have worked with many of America's leading corporations, primarily in the media industry but also including General Motors, Coca-Cola, Sears Roebuck, Saks Fifth Avenue, Neiman-Marcus, TJ Maxx, Reebok, Campbell Soup and other iconic brands. My role has been simple and focused: define the business-to-business relationships among media, advertising companies and marketers, and build new economic models that reflect my visionary perspective of the future. My frustration has been the abject and stubborn refusal of most media companies and their agencies - as well as many marketers -- to bend from traditional business relationships.

For three decades I have been among the most active and vocal advocates for introducing new business models into the relationships among media, marketers and agencies. I've written three books about relationships; conceived and implemented an advertiser-supported programming initiative with a consortium of ten advertisers to research a studio-based economic model for TV programming; packaged cable networks into a single media buy in a test for Kraft and other advertisers; and served as lead consultant for Aegis on the decision to launch Carat in North America (recommending David Verklin as CEO).

I designed the model for General Motors' first dedicated media buying and planning units, GM Mediaworks and Planworks, working with GM executives Phil Guarascio, Michael Browner and Betsy Lazar. I created one of the first dedicated media units for Campbell Soup within the Foote Cone & Belding agency, bought broadcast media for Saks Fifth Avenue, Neiman Marcus and TJ Maxx, and I hosted the first Forums on the Future of Interactive Television beginning in 1998. I've worked in television sales and marketing; digital publishing; out-of-home, print and radio media; event and youth marketing, plus advertising-sponsored and branded entertainment.

My extensive experience, my access to "C" level suites and innovative emerging companies, my intimate knowledge of many of the world's leading media companies, my decades of industry leadership, and my powerful voice in the community with more than 20,000 readers of my daily report, uniquely qualify me to facilitate the development and implementation of, and generate support for, the expansion of innovative business models that will enable the media and advertising business to remain healthy and vital for decades ahead. I will work with media companies, agencies, studios, investors and emerging digital companies to develop new organizational models, create innovative and future-looking revenue-building strategies, and advance marketing initiatives that drive industry acceptance.

Read expanded coverage on this topic at www.JackMyersThinkTank.com. To comment, read more on this topic, or request information, e-mail jm@jackmyers.com