New Talent A Key To Expected Business Growth

According to the first annual Media Growth survey from investment banker The Jordan, Edmiston Group, and digital research company Econsultancy, the media and information industry is focused on growth. With responses from nearly 500 c-level executives across the media, information, marketing services and technology sectors, these executives are generally optimistic about the health of their markets coming out of the economic downturn, as 82% identified "organic growth" as the primary growth driver in the next 12 to 24 months.

The Media Growth Survey was created to capture senior media industry executives' outlook on growth opportunities and key challenges that face the industry in the months and years ahead.

As a tool for senior executives to improve business performance by identifying and ranking a number of industry trends, the organizations participating are primarily based in North America with the UK additionally represented.

  • 65% of respondents were from companies with less than $50 million in revenue
  • 26% were from companies with revenue between $50 million and $1 billion
  •  9% were from companies with more than $1 billion in revenue

A variety of business sectors are represented, including:

  • 44% of respondents were from companies in the B2B and B2C media sectors
  • 14% classified their companies as online media and technology
  • 13% as marketing services and technology companies
  • 8% as database and business information companies
  • 6% as software and technology companies

Media executives are generally optimistic about the health of their markets in the near term, as 82% identified "organic growth" as the primary growth driver in the next 12-24 months. Along the same lines, "Expansion of market share within existing markets" was a top-tier choice among senior executives, with a 70% response rate. Taken together, a majority of senior executives across the media industry have positive expectations for growth.

Growth Drivers (% of Respondents)

 

Anticipated Time Frame

Driver

1-2 Years

3-5 Years

Entering new vertical markets

36%

42%

Expansion into new geographic markets

41

43

Making an acquisition

35

47

Increased market share in existing markets

70

68

Organic growth

82

68

Launching new products/services

76

79

Source: Media Growth Survey, JEGI, Econsultancy, January 2011

Senior industry executives across all company sizes are struggling with competition from free/low-cost alternatives to their products/services, as well as innovations from traditional competitors. Larger revenue businesses, which are having a more difficult time than smaller, more nimble companies with the move from offline to online content, are also competing for business against such smaller companies with digitally based models. Few companies, regardless of size, are battling for growth with companies that are using low-cost labor.

Systemic Barriers to Growth (By revenue/company size; % of group respondents)

 

Company Size ($ x MM)

Barrier

<$10

$10-50

$50-250

>$250

Companies using low-cost labor

8%

8%

9%

10%

Smaller companies with digitally based models

12

17

36

45

Move from offline to online content

20

28

51

55

Competition from free/low cost alternative to products

35

41

40

51

Innovation from traditional competitors

47

40

35

34

Source: Media Growth Survey, JEGI, Econsultancy, January 2011

Ongoing developments across the media and technology sectors are seen as the most dominant trends in today's marketplace, as well as over the next three to five years. Gathering and analyzing data just edges the proliferation of devices/platforms for media consumption as the top trend through 2012. However, executives see the latter trend becoming increasingly important and topping all others by a significant margin, as they look out three to five years.

Respondents see the importance of social networks increasing over the next five years. Given the absence of social in their plans for growth, it is clear that leveraging this trend presents a significant challenge. Senior executives foresee global expansion and the globalization of their markets as a growing trend that will increasingly impact their companies over the next three to five years.

Trends Perceived as Having Most Impact on Companies Today (% of Respondents)

Trend

Impact in 1-2 Years

In 3-5 Years

Rise of data and analytics and how best to use them

46%

44

Use of multiple devices/platforms (digital)

44

54

Rise of social networks and their effect on marketing

32

41

Ability of users to access free or low cost content, data and information

23

16

Difficulty to target audience due to fragmentation

16

11

Globalization of markets

15

18

Outsourcing / off-shoring of staff/services

2

3

Source: Media Growth Survey, JEGI, Econsultancy, January 2011

The rise of data and analytics will have the most significant impact on media companies within the next two years concludes the report. And while respondents see social networks gaining importance over the long haul, just 32 percent say social media will have a significant impact on their business over the next 1-2 years.

Only 2 percent of executives say outsourcing or off-shoring will have a significant impact on their companies over the next two years, but acquiring and developing talent and new technologies are key areas of investment, according to the survey.

Internal obstacles vary by revenue and size. Small companies complain of the lack of capital and credit for expansion while larger companies are primarily concerned with a lack of talent in emerging areas.

Areas of Investment for Media Industry in Next 12-24 Mos:

  • New Product Development: 73%
  • New Talent: 63%
  • Talent Development: 48%
  • Infrastructure: 41%
  • Acquisitions: 38%
  • Overseas operations: 26%

Source: Media Growth Survey, JEGI, Econsultancy, January 2011

For additional information, please visit The Jordan Edminston Group here, or go here to access the PDF file for the report.

 

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