Traditional media ads survive, despite e-marketing

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By: Wise Marketer Staff |

Posted on February 20, 2003

Despite the popularity of advertising through interactive TV, wireless services and pay-per-view systems, there is much evidence that branded content in traditional media can continue to be a major driver of retail demand, according to the annual 'Media Trends' report from Braun Consulting.

Despite a mass of past predictions that the age of print is nearing its end, and that electronic content delivery channels are the way of the future, retail demand is still being driven by branded content in the more traditional media.

"Of course, the threat of the internet has not disappeared. As consumers grow more elusive, media companies must evolve their ability to leverage new communication channels to create and distribute content in a form that's tailored and convenient for their target market," notes Bart Lombardi, vice president for Braun Consulting. "That, in turn, requires a deeper understanding of customers, and these are real challenges for many firms."

One to one communication
Braun's report, Media Trends: 2003 and Beyond, predicts that media companies will clear the distribution hurdle using what it calls a "hub and spoke" acquisition strategy, allowing them to improve the volume and quality of the content they provide, while expanding their ability to tailor the content and distribution methods to individual customer preferences.

By offering narrower and deeper subject matter to specific consumer segments across multiple channels, media companies will be able to maximise the value of their best customers and prospects.

And, as an increasing number of delivery technologies develop, providing customers with the right content at the right time will create competitive advantages for the more advanced and technologically aware media firms.

Skipping the adverts
Meanwhile, as advertisers continue to bombard consumers, technologies such as digital video recorders are helping consumers bypass traditional advertising altogether (see Dec. 5th, 2002), forcing media companies to re-examine their existing revenue models.

According to Braun, media companies will be forced to explore content-based revenue models as television advertising becomes less effective. "Media firms know they can't remain dependent on traditional advertisements to fuel their business plans," explained Lombardi. "As consumers become more willing to pay for convenience, subscription-based revenue models and interactive advertising are evolving."

Smart filtering
In the future, consumers will increasingly be given the ability to tailor commercial content to their own needs and interests. Digital delivery of information will help drive this trend, and digital content libraries are likely to expand significantly in the coming years, according to Braun.

At the same time, media companies will rely on ever-evolving 'smart filters' to deliver more tailored content to each consumer, using detailed analysis of all available customer information (from loyalty programmes, sales data, marketing results, and customer service events) to target product and service offers.

Key trends
Based on its analysis of leading media companies, Braun expects these key trends to have the greatest impact on retail demand during 2003:

  • Media consolidation will continue - with an emphasis on "hub and spoke" strategies. The media industry will continue to pursue targeted mergers and acquisitions that achieve synergy between content creation abilities and distribution technologies.
  • Subscription-based business models will grow - as traditional advertising-based models contract. As the number of adverts to which consumers are exposed overwhelms them, the growth of new content channels and technologies will cause traditional advertising's effectiveness to suffer.
  • Interactive television services will change the revenue model for cable and satellite providers. As consumers begin to avoid television commercials by using digital video recorders and on-demand applications, there will be a movement from traditional 'spot' advertising on television to interactive advertising, product placement, and virtual 'in-programme' advertising.
  • Data privacy legislation will reshape marketing efforts. Companies that rely on non-permission based direct marketing tactics will have to rethink that strategy. With current legislative efforts underway to regulate or prohibit non-opt-in marketing tactics, media companies are being progressively forced to develop their own customer data sources (instead of purchasing data from other sources en-mass).
  • Consumer choice will become the driving force in content delivery. The days of passively receiving the newspaper on the doorstep as the sole source of information are long gone, according to Braun. The age of 'viewer choice' has arrived, with the combination of three complementary trends: recommendation technologies (which use consumer preferences and habits to recommend content), digital content libraries, and geography-independent delivery of content through technologies such as satellite and broadband internet.
  • Personalised products and services will be offered, rather than one-size-fits-all bundles. As media firms start to utilise analytical tools to understand customer preferences, standardised service bundles (such as video, voice and data) will not be sufficient to attract and retain customers.

Many media organisations are already developing technologies and integrating traditional and new communication channels in an effort to capture increasingly elusive consumers.

Ultimately, however, providing consumers with these tailored offerings will depend on the ability to understand and segment customers in ways that have never before been seen in the mass-marketing arena.

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