January 2009 - Column: The Media Report

Direct Marketing is the Future of Advertising
By Jack Myers

It is long overdue for media companies to focus on how they can wean themselves off their addiction to advertising revenues and begin capturing the nearly 25 percent of corporate marketing budgets they rarely touch-direct marketing. Media companies need to convince investors they have the management team in place that can develop and implement a coherent and intelligent vision for the future-a future in which they will be forced to be less dependent on advertising revenues.
Thus, media companies must develop and implement a new vision if they are to survive.

For years, the signs have been on the wall. Traditional media companies have had plenty of opportunities to invest in business models that would have prepared them for these tough times. I’m not referring to digital investments, which, of course, are an important part of future growth opportunities. Ambitious digital plans have been rolled out, but traditional ad-dependent business models have been anchor-bolted onto them. The focus should have been on identifying core assets that have viable commerce-based brand extensions and on shedding those assets that remain dependent on commoditized supply-and-demand market fluctuations.

Every network television series needs to be reviewed for its long-term brand vitality-not based on ratings, but based on direct marketing, database and electronic retailing revenue potential. Every section of every newspaper and magazine; every personality on every radio station and every format within a radio company…all need to be analyzed as direct marketing and commerce opportunities.

For major media companies, there is less time than they realize to reinvent their business models. If media companies want to survive for the next 15 years, they must act quickly to alter their current business paradigm and present a coherent future-looking vision that will appeal to both marketers and investors. They must cure themselves of their advertising addiction.

Jack Myers advises media companies, marketers and agencies on economic trends and revenue-generation models. He can be reached at [email protected].

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