Media Providers Weigh Growth Options as Marketing World Changes

As marketers debate where to spend their advertising dollars, media space providers are watching technology improvements and changes in consumer behavior closely. Disruption in the traditional media business model has executives planning new strategies to remain competitive in 2011 and beyond. These strategies will likely affect how and where marketers seek to allocate their media spending.

Media executives have identified the following top growth initiatives in the next 1–2 years:

  • Organic growth 82%
  • Launching new products/​services 76%
  • Expansion of market share within existing markets 70%

However, this growth won’t be easy to achieve. Senior managers of smaller companies, those with less than $10 million in revenue, are watching out for innovation from traditional competitors (47%) and competition from free/​low cost providers (35%). About half of the largest operators, those with more than $250 million in revenue, also fear the low-​cost competitors as well as the challenges of moving content online (55%) and competition from digitally-​based operators (45%).

Over half of media companies with revenues exceeding $50 million identify a lack of talent in emerging areas as a top internal barrier to company growth. This talent shortage may explain why 42% of all media businesses are looking at making acquisitions either this year or next. Acquisitions may buy them a place at the digital table. Not surprisingly, 81% of the largest firms are looking for acquisition candidates. A significant portion of these acquisitions (48%) will be in the price range of $10 million or less. As media companies look for acquisitions and growth vehicles, they say the following trends are most important:

  • Rise of data and analytics and how to use them 46%
  • Proliferation of multiple device/​platforms such as smart phones, tablets, and mobile computing 44%
  • Rise of social networks 32%

Regarding the low ranking of social networks, the study authors comment, “[i]t appears that, thus far, social media is a disruptor without a clear path to a significant revenue stream.” In any case, as transitions in the media industry play out, marketers will be choosing the options that provide them with the best audience reach for the best price.

[Source: Media Growth Trends. Issues and Opportunities. Jordan, Edmiston Group, Inc. and Econsultancy. January 2011. Web. 21 Feb. 2011] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.