The media world is rapidly shifting. Running a media company is more difficult than ever. In his recent post, “Why Brands Will Start Buying Media Companies,” Joe Pulizzi identifies one of the core challenges that media companies face as a need to please two distinct groups: their marketing customers (brands and advertisers) and their audiences. Keeping both groups equally happy often puts media companies in a precarious situation.
If marketing customers are the veins of the media company and advertising revenue the lifeblood, then the audience must certainly be the heart—for without the heart, the blood stops flowing. Media company executives understand that their audiences are their biggest asset, but their marketing customers keep the lights on.
As customer needs change and audiences are inundated with content competing for their attention, media companies find themselves caught in the middle of a balancing act—introducing new products and custom services to grow revenue, while milking audiences for every drop of engagement without crossing the invisible line that drives away loyal subscribers. All the while, the industry at large is questioning media companies’ ability to survive the shift.
The fact is that the digital world introduces amazing new opportunities for media companies if they can find ways to overcome the obstacles. I started this year by taking a deep dive into the challenges media companies face today and boiled it down to these key issues:
- Marketing customers today are less willing to pay for “eyeballs” and instead prefer performance-based models that generate actionable data, causing media companies to rethink the ways in which they engage with their audiences.
- This shift requires media companies to develop new teams within their organizations whose primary role is scrubbing files, assembling spreadsheets and manually tracking data—a far cry from their core competency as media and content pros.
- Performance media profit margins are significantly smaller than those of the old impression-based models, especially once they factor in the resources involved with getting audience data into their customers’ systems. “Dollars to dimes” as the saying goes.
- Every day brand marketers get closer to becoming media companies themselves, creating their own content and building their own audiences—and painting a very uncertain picture for the future of the media business.
Check out this video that summarizes exactly what media companies are experiencing and identifies a way to navigate the changing landscape and capture the opportunity of the digital world.