I spent a great part Friday evening with a marketing executive from one of the leading South African blue chip companies. It was an evening an employee of a media owner or media agency would truly envy. I was particularly intrigued that he has evidence of over 2000% ROI in his digital advertising campaigns for which he spent an insignificant amount that is certainly less than a loading fee for any print ad or 45’ spot on TV off peak (non-prime spots).
Despite this change, he advised that though they ultimately still have the upper hand and are easily saving their bosses money with less spend on traditional media campaigns, traditional media houses are battling to provide returns that are closely associated with their medium. Strangely, though, he said that working for a media owner or media agency still provides great benefits for any employee in this sector, particularly those who are astute in digital technology, and this should be linked to how much money clients are throwing down the drain with no measurable return in traditional media advertising.
I’m personally of the view that media shareholders are most certainly not happy with cost of their operations and this could easily explain the stripping of traditional media houses core assets for outsourced alternatives.
The discussion highlighted a fact that now is common cause for any media owner: to simply wish the digital age away. It won’t be long before we see the mighty fall, and unfortunately it won’t be the result of Protection of State Information Bill. One can’t ignore efforts by some of media house’s executives that caution that the situation is not as bad as it’s portrayed.
Unfortunatel,y the industry operations aspect cannot and will not survive on wisdom alone; a new breed of executives is required, those that are willing to combine both wisdom and innovative technology. These are the executives that understand their relationship with technology extends beyond receiving their emails on smartphones, received via corporate packages.
The reality is that the new consumer is not necessarily impressed by executive ability to receive and reply to email via their smartphones; the digital age is way beyond that phase. New media is gaining ground at a pace that cannot be ignored by any realistic traditional media executive, or simply be browsed via their smartphone and while they convince themselves that SA is lagging behind the rest of world, and forgetting that the consumer is a role player in this global world.
I would not be surprised to see further resignations in the coming months, as most executives will dread having to report further on losses of audience, circulation and ultimately revenue.
I’m of the view that it will take a seriously brave executive to have a similar report presented to any shareholders at the next meeting still highlighting loses as in the past three to four years and how they have consolidated operations. Using the recession as an argument will no longer hold weight, despite the fact that we are rumoured to be headed to another recession thanks to the EU financial crisis.
Now, what any traditional media house ought to ask in this tough economic climate is: how deep are their pockets to save the future of their establishment and accelerate efforts in the digital era? And just a word of advice here: transfer of content to e-editions format does not speak of innovation and means nothing if these tools don’t lead to a new revenue stream and is tantamount to what I would phrase as eDumping.
And the sooner traditional media houses realises their sins are deadly to their survival, the sooner industry can stop the downward spiral.
Here are my seven deadly sins:
- Recession was not an indicator that traditional media houses are now in recovery mode, but an opportunity to align the industry with future digital trends and a consequence of business sticking temporarily to what they know;
- Content sources and the newsroom is the most credible asset in the business but becomes a non-core asset if their time is spent on the desk and searching Reuters for breaking stories;
- Outsourcing and reducing spend, only assist to manage operational cost but does not necessarily result in increased revenue;
- Transfer of content to web and mobi sites does not and will not equate to innovation but rather speaks to additional access;
- Online and mobi presence means nothing if you can’t maximise and create a lucrative revenue stream;
- Realise and accept that content ever created by the group is itself currency and potential source of revenue in the digital era;
- Subscriptions to the digital platform are only necessary once one has established or efficiently transferred their loyal base.
Follow Tshepo Moletsane on Twitter @mobisoul