The modern media business is sometimes cast as a battle where the breakneck growth of internet media is killing off the old media dinosaurs.
The truth is somewhat different. The internet is transforming the way all media owners do business, from delivering television over the internet to carrying video on a newspaper website. It is even changing the way that advertising is sold.
"Everything is becoming digital," says Nick Emery, chief strategy officer for WPP's pooled buying resource Group M. "Traditional media will lose out, but not necessarily traditional media owners, as they might be getting revenue from different areas." He says the survivors from the old media world will be the ones that can use their brand name across different platforms.
Old and new media have converged so heavily that some would even question if the term traditional media is relevant. Dominic Carter, trading director at News International, says he is "not even sure what it means in this day and age". "We're a media company that happens to be in newspapers, not a newspaper company that happens to be in media," he says.
Newspapers' legacy
Consumers are not abandoning traditional media - there is plenty of research to show that the internet has supplemented rather than replaced traditional media consumption. Although newspaper circulations have fallen 14% over the past five years, according to ABC figures for the paid-for daily sector, there are still millions of copies sold - or given away - every day.
Television industry marketing body Thinkbox even has research suggesting that households with digital television recorders, which allow consumers to time-shift viewing, actually watch more television and, since they do not always bother fast-forwarding the ads, are exposed to more commercials as a result.
Yet marketing budgets are finite and many advertisers are pulling money from traditional outlets and investing it online. Dave Brennan, research and strategy director at Thinkbox, says television advertising is better value than ever before because viewing impacts are at a historic high. "It's down to the way air time is bought, traded and sold," Brennan says.
Thinkbox has also carried out a study with the Internet Advertising Bureau to show that people are often watching TV and surfing the internet at the same time and television commercials can prompt online purchases. However, Tom Smith, head of consumer futures for Europe, the Middle East and Africa at media agency Universal McCann, counters: "This means they're less engaged and it's more background, low attention viewing than high-quality appointment-to-view watching."
Digital channels
ITV, Channel 4 and Five have responded to the changing world by creating digital channels, building websites with video-on-demand services and developing internet protocol television (IPTV). Rupert Howell, ITV's managing director of brand and commercial, says the company has invested heavily in its digital future, with the launch of ITV.com, the roll-out of ultra-local TV service ITV Local, which relies largely on user-generated content, and the purchase of social networking site Friends Reunited. "You could argue we were slow on the uptake but ITV.com now has six million unique users per month and video views are up 350% year on year so we're catching up and overtaking others," Howell says.
As well as the traditional 30-second spot, broadcasters are selling sponsorships and advertiser-funded programming such as ITV's recent collaboration with Pedigree for Dog Rescue. Group M's Emery says the development of IPTV to offer more targeted advertising is particularly interesting. "If you live at number 47, your best friend is at number 51 on the same street and you are both watching Coronation Street but you have different habits and fashions, then you could receive a different message," he says.
Newspapers have also embraced the digital age with multimedia websites offering 24-hour news, video, audio and blogs. News International's Carter says the Dream Team fantasy football game and Bingo on the Sun's website are particularly popular and bring in subscription revenue for the company. The Financial Times was until recently one of the few newspapers charging for content on its website but moved to a hybrid model earlier this year, with access to a number of free articles per month on an ad-funded basis. Jon Slade, global online and strategic advertising sales director for the paper, says the business has a multimedia strategy that includes the newspaper and magazines such as How to Spend It, the website and Financial Times-branded events. "We have an integrated newsroom, which we're very proud of, and an integrated sales force," Slade says.
Most media companies have reorganised their sales teams in response to the changing advertising climate. Rather than have teams that operate in a silo selling print or online products separately, it is now more common to have teams dedicated to serving different agencies or advertisers and selling across the entire product range.
Technology is also changing the way advertising is bought and sold with online marketplaces such as Media Equals springing up to automate the process. Gary Goodman, managing director of Media Equals, says the service is already being used by media owners such as BBC Magazines and CBS Outdoor as well as agencies such as Aegis, Starcom and Initiative. "It benefits agencies because it makes it a more efficient way for them to buy media and it is a benefit to media owners because they can move time away from back office trading and focus on selling," Goodman says.
The media industry is highly innovative, whether in the new digital space or among the so-called traditional players. Far from new media killing off old media, it seems the distinctions between the two are blurring.
Weblinks
