Media company of the future
The revolution goes on “Paper is dead . . . long live paper!”
In most verticals, the severe decline in print following the recession has passed and is now entering a phase of long, slow, structural decline. Media companies must now manage print for profitability by finding ways to create a stronger value perception for both advertisers and users. Ideas which brands are contemplating include:
Creating higher quality issues, while driving scarcity through fewer brands and fewer, more expensive ad pages:
- Driving on-line users to exclusive content in print; right now it’s a one way street from magazines to digital which is only hastening print’s decline
- Experimentation with high tech enhancements such as augmented reality or QR codes that lead to related mobile experiences
- Leveraging sophisticated audience database technology (see below) and better economics of printing to offer highly customized print editions, creating more value for users and improved targeting for advertisers
“The media company of the future is a technology company.” In 2011 AMR published a white paper entitled “Media Company of the Future: the Revolution Goes On.”
We argued that successful media companies will have to embed deep customer understanding, collaboration and technology into their culture. Two years later, we observe how companies have transformed to meet these challenges; reshaping their organizations and adopting new technologies and business models.
Examples at MediaNext were plentiful:
- Painful and often drastic cuts of sales and editorial staff that could not adapt to selling or creating content in digital
- Investment in audience database technology, built in-house or with third parties such as Hallmark Data Systems. These systems allow companies to track user behavior and improve targeting of content and ads to drive CPM value, create more effective promotional campaigns and better cross sell to the user base
– Cygnus reportedly spent $5m over the past few years on technology upgrades which are so powerful, CEO, John French claims he has received offers to license them!
- Publishers see enormous growth potential in video. Howard Mittman, Vice President and Publisher of Wired, predicted in 10 years video will be their single biggest revenue stre
“Innovating to growth.” Companies are harnessing the power of technology, content and audience to find new ways to maintain relevance to users and attract advertisers:
Media is embracing native advertising and marketing solutions-type business models. AMR has sized the market for content marketing at $40bn, growing at 6%. Clearly this represents an opportunity for media companies, with their ability to create relevant content and deliver an engaged audience. The challenge is can media owners deliver these solutions with attractive margins, at scale and with the capability to measure RoI?- To tackle these issues, Hearst has templatized its native advertising platform to efficiently distribute advertiser content across channels and brands, yet maintain the appropriate context in each, while allowing advertisers monitor RoI in real time
– Praetorian has also created businesses (e.g., policegrantshelp.com) which help first responder departments find grant opportunities and improve their chances to win, effectively an on-line CRM solution
- Given the attractive economics and higher EBITDA multiples of events, publishers are seeking new revenue from conferences. Unfortunately, many fall into the trap of believing they have the makings of a good event merely because they have the requisite content, audience and brand. However, these assets may no longer be enough to build a sustainably profitable event
– It is critically important to identify specific underserved market niches or be the first to tackle an industry issue
- Format innovation is also long-overdue; traditional classroom settings and fishbowl networking venues are tired and can result in depleting renewals
To discuss how AMR can help your company develop growth strategies please contact Denzil Rankine.
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