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New Talent A Key To Expected Business Growth
by Jack Loechner, Thursday, February 3, 2011 8:15 AM
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 $1 billion in revenue
A variety of business sectors are represented, including:
- 44% of respondents were from companies in the B2B and B2C media sectors
- 14%
classified their companies as online media and technology
- 13% as marketing services and technology companies
- 8% as database and business information companies
- 6% as software
and technology companies
Media executives are generally optimistic about the health of their markets in the near term, as 82% identified "organic growth" as the primary
growth driver in the next 12-24 months. Along the same lines, "Expansion of market share within existing markets" was a top-tier choice among senior executives, with a 70% response rate.
Taken together, a majority of senior executives across the media industry have positive expectations for growth.
Growth Drivers (% of Respondents)
Anticipated Time FrameDriver1-2
Years3-5 Years Entering new vertical markets 36% 42% Expansion into new geographic markets 41 43 Making an acquisition 35 47 Increased market share in existing markets 70 68 Organic growth 82
68 Launching new products/services 76
79
Source: Media Growth Survey, JEGI, Econsultancy, January 2011
Senior industry executives across all company sizes are struggling with competition from free/low-cost alternatives to their products/services, as well as innovations from
traditional competitors. Larger revenue businesses, which are having a more difficult time than smaller, more nimble companies with the move from offline to online content, are also competing for
business against such smaller companies with digitally based models. Few companies, regardless of size, are battling for growth with companies that are using low-cost labor.
Systemic Barriers to Growth (By revenue/company size; % of group respondents)
Company Size ($ 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)
TrendImpact in 1-2 YearsIn 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.