• by Karlene Lukovitz , August 4, 2009

By undermining the financial viability of traditional media, marketers are jeopardizing the only viable means currently available for reaching mass audiences.

That's the core premise of "The CMO's Dilemma: Can You Reach the Masses Without Mass Media?," a new white paper co-authored by John Rose and Neal Zuckerman of The Boston Consulting Group. Rose and Zuckerman argue that it's critical that marketers, agencies and media companies start addressing the issues surrounding this dilemma together.

The current shifting of advertising dollars to new types of media and below-the-line marketing channels such as PR, events and in-store promotions represents a fundamental structural change rather than a cyclical ebb tied to the economy, say the authors.

"If traditional media companies think the advertising dollars will return when the economy rebounds, they're kidding themselves in a dangerous way," Rose, senior partner at BCG, tells Marketing Daily. The high fixed costs built into their current business models mean that they cannot withstand even a relatively small absolute decline in their share of advertising revenue. "Cost-cutting may have bought them some time," but to survive, they will have to build new business models that embrace cross-company partnerships, as well as integrate media channels, he says.

Advertisers have shifted enough of their spending to threaten traditional media companies' economic viability, but not enough to create alternatives that approach the effectiveness of television, newspapers and magazines at providing national advertisers with broad demographics and massive reach -- and strong alternatives won't be available for at least the next several years, Rose says.

Underlying all of this is the reality that CMOs' ability to create marketing strategies reflecting optimal mixes of traditional and digital media and below-the-line channels is severely hampered because of a vacuum of integrated media planning and measurement solutions, Rose and Zuckerman maintain. Instead of integrated solutions that enable them to determine the effects of shifting budget dollars among media, CMOs are pitched "unique" sets of solutions for each channel, while agencies have by and large responded by creating specialty divisions.

However, CMOs are beginning to ask the questions needed to arrive at new solutions, according to the authors.

These include:

What are our goals and targeted customer base for each traditional and new marketing channel, what specific activities will best help us reach customers, and how should we measure their success?

How do we allocate dollars across increasingly overlapping marketing activities and create an integrated cross-media strategy that recognizes each channel's value?

How do we work with agencies and other partners to put our media strategies together?

Will our media mix changes contribute to the elimination of traditional media and what, if anything, can or should we do about this?

"None of us can fully answer these questions until advertisers, agencies and media companies collectively recognize that the crisis in mass media is a marketing challenge, too," Rose and Zuckerman conclude.

However, they say that traditional media companies need to work with advertisers and agencies to develop sustainable, relevant business models; that advertisers need better support from agencies to leverage opportunities; and that large advertisers should be considering developing select in-house capabilities to fill the gaps in their needs.