Photon Group, in their annual results presentation today (Revenue up 94% to A$376m, Net Profit up 33% to A$21.7m – go to ASX to download FY2008 Annual Results) used three quotes to support their “media neutral, consumer driven “ strategy:
“The current agency model, producing marketing programs built around 30 second television ads, is no longer relevant for today’s business environment”
Tony Palmer, Chief Marketing Officer for Kimberly Clark
“Today almost every business and social activity is a form of media. An increasing proportion of our social interactions happen across media channels”
Ross Dawson, Chairman of Future Exploration Network
“We will spend our marketing funds where the consumer will be and that is changing rapidly”
Craig Herbison, General Manager, Brand and Communication for Vodafone Australia
The quote from me is taken from the introduction to our Future of Media Report 2008, which has been getting a fantastic amount of attention globally since its launch in July.
I have spoken and written before about how media is beginning to encompass almost everything in the economy (for example in my speech on Enterprise 2.0 at KMWorld in Silicon Valley last year). I think it’s worth reviewing the first paragraph of the Future of Media Report 2008 below. I believe this view is central to how media, business, and society will unfold over coming years.
We are entering the media economy. The traditional boundaries of the media and entertainment industry have become meaningless. Today almost every business and social activity is a form of media. An increasing proportion of our social interactions happen across media channels. Every organization is now a media entity, engaged in creating and disseminating messages among its staff, customers, and partners to achieve business objectives. As the physical economy becomes marginalized and economic value becomes centered on the virtual, media encompasses almost everything.
One of the issues that I am increasingly shifting my attention to is how smaller developed economies compete in an intensely connected global economy. For example, in different sectors Ireland, Finland, Israel, and Singapore have had significant success in shifting their economic structure. While the large economies of US, Japan, and Western Europe as well as the emerging BRIC giants face their own issues, there are a particular set of challenges for smaller countries or regions. In addition to the general drivers of economic success in a hyper-connected world, there are a range of specific issues within industries, particularly in the media and technology sectors.
The Department of Innovation, Industry and Regional Development in the Australian state of Victoria recently commissioned an independent review of the screen industry in the state, which goes through to a proposed vision for the future of the industry in the state. Beyond this specific initiatives will be established. The review was performed by consulting firm Nous Group, and I was an ‘Expert Advisor’ on the review. The Screen Industy value chain (as below) on page 14 of the report was developed based on some of my thinking, including my Future of Media Strategic Framework.
The Victorian Screen Industry Review can be downloaded, and makes for some very interesting reading.
Below is a summary of the key trends identified in the report across sectors, followed by five key issues raised by the report.
I have said for many years that the best way to understand Google is as an advertising aggregator (I would argue that even with its diversification over the last few years). Building on its successful search engine, it has sold ads that are served both on its search results, and also on a broad array of non-Google sites, initially through its AdSense program. It has for some years also sold advertising for delivery on radio, television, and newspapers. This was described in our Future of Media Strategic Framework which appeared in the Future of Media Report 2006.
Back in March I was interviewed by the ABC’s Media Report program about Google and Microsoft’s bid for Yahoo! at the time. While some of the interview topics are a bit dated now, much of it is still relevant, including my description of Google’s role in the media landscape. I’ll expand on this in another post soon.
You can read the transcript on the ABC site and below (note that there are some errors in the transcript).
Antony Funnell: Now let’s stay with search engines for a little bit longer, and look at the business manoeuvrings of some of the big players. Google last week announced it’s beefing up its presence in Australia with a new headquarters, and it’s seeking to grow in a whole range of areas. It’s also announced that it’s successfully acquired internet advertising firm DoubleClick.
Meanwhile, in another online universe, Microsoft appears to be still actively stalking the second-tier search engine company Yahoo. What’s it all about? Well let’s ask Ross Dawson. Ross is a communication strategy consultant and chairman of the Future Exploration Network.
Ross Dawson: It’s important to understand that Google is not just a search engine, and that it is in fact, more than anything else, an aggregator of advertising. What it does is it goes to advertisers and says, ‘We can present information about you, not just on our own search engine, but also on many, many other websites’.
Media Trends+Strategy magazine (click on the link to access the magazine in interactive format) includes a piece titled Media: The State of Play – Expert Analysis which features edited interviews with a variety of participants in the media space, including John Sintras, CEO of Starcom, Belinda Rowe, CEO of ZenithOptimedia, Collin Segelov, Executive Director of the Australian Association of National Advertisers, and myself.
My interview is below. You can also read it and the other interviews by going to the magazine from the link above – my interview is on page 30.
Further context on some of my comments is available from the Seven Driving Forces of Media and Creating the Future of Advertising.
What does the ongoing consolidation In the industry mean for marketers?
The first thing to understand is that the most powerful broad trend in media is fragmentation and while mass media remains, it is becoming a smaller and smaller proportion of the overall media landscape. So within that context, what we see is that there is consolidation within particular segments and in some of the larger players. We have seen more and more cross media ownership as regulation has eased. One of the implications for marketers is that they are increasingly being offered media packages across different segments from the same owner. This is obviously not a new trend, but as we get more and more cross media ownership, more and more marketers are being presented with these offers to access an audience through a multiplicity of different channels. From a marketers or media buyer perspective , these can only be judged on their individual merits. It really needs to be driven by the media buyer as to what is the appropriate set of media channels to reach their audience with the right message, and that may or may not tally with what is being offered by some of the larger media owners.