It sounds dramatic to declare "The End of Advertising As We Know It," but the title of a new report from IBM Global Business Services is hardly an overstatement. It's more like a documented warning of what should be heeded (and isn't) without the specific guides and models for change that are so desperately needed. Now that everyone has bought into digital interactivity, we need templates for future success.
The economic slowdown and subprime-induced credit crunch will take a negative toll on media and entertainment industries long considered insulated from such events. These forces also could slow the robust rollout of digital interactivity. The big question in both cases is how much? Now throw the writers' strike into the mix. All are casting a long shadow on the media outlook for 2008.
Comcast and AT&T are taking their fight for bundled consumer and small business services straight to the people with humor-laced advertising. But the intense competition between cable and telecom over a maturing broadband market is becoming no laughing matter.
At a time when Big Media is wrestling with digital transition, economic turmoil and itinerant competitors, Rupert Murdoch and his News Corp. are setting the bar higher for making it all work and finding the big payoff. Murdoch also has crafted News Corp. to play in all of the significant global sectors of traditional and emerging media and revenue sources from a position of power that includes strong brands, an entrepreneurial respect for change, and deep global intelligence. Although News Corp.'s latest quarterly earnings were punctuated by many of the factors generally vexing the industry, the conglomerate's near-term balance sheet …
The launch of inventive new behavioral marketing platforms by Facebook and Google just as the writers' strike begins to cast a shadow on network television's value proposition to Madison Avenue will eventually prove to be a seminal event for all media advertising.
After years of preaching synergy, the powers-that-be at InterActiveCorp and Time Warner are conceding that some of their core assets will be worth more as stand-alone sales or public spin-offs than they have been in their woefully undervalued portfolios. IAC chairman and CEO Barry Diller and newly named Time Warner CEO Jeff Bewkes will jettison select operations in a last-ditch bid for elusive value, which will be determined by other individuals, companies and markets. And that's the rub. There is no guarantee that simply breaking up the parts creates new or additional value.
The writers' strike could be the best thing that ever happened to the television and film industries. It will force the companies at the controls to make good on their promise to devise new media business models that serve all interests. One can only hope.
America's business media is getting the double whammy. It struggles with the digital transition, just like other media, while being expected to guide its readers and advertisers through complex issues and hammering out new business models on its way to interactive prosperity.
Major economic forces are having their way with the media and entertainment industries in a power struggle that eventually will lead to dramatic change. But until then, it is going to hurt.
Anyone who thinks Google has missed the social networking boat does not know Google. Google is in the sweet spot of social networking: personalized data that can be lucratively cross-matched to other users, advertisers and businesses. It has the consummate search and personalization mechanisms, which it seeks to apply to the ultimate social device: the mobile phone. Just another step in its plan toward cyber-world domination.
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