Media owners of the future
Whilst the fragmentation of traditional media was already an unstoppable process a decade ago, there is no doubt that the digital revolution has added its own mix of rocket fuel which is becoming more potent with every technological advance. We’ve become a fractile society of individuals in a way that, as Lord Rees Mogg asserts in “The Sovereign Individual”, could eventually even undermine the power of nation states themselves. It will demand a radical re-assessment of the world we live in and the way that as humans we interact with each other.
As part of these seismic trends, marketers are ill-prepared for the changes in media that now loom on the horizon, all driven by the very industry we work in. As mass media disintegrates, those media owners holding the most valuable and precise information will be the new media kings, the new Randolph Hearsts. Make no mistake, these new media kings will be digitally-based and recent manoeuvrings by eBay, Yahoo, Google and Microsoft are a strategic recognition by these digital giants that information is the new currency.
By its simplest definition, media owners are intermediaries. They provide the content that allows advertisers to target their chosen markets. In the new digital paradigm, the role of media owner is still the same but is now exponentially more sophisticated. Google’s strategy is an undeclared recognition of this very fact. As the number one search engine they already know what you’re reading, what you are interested in, where you are going (Google maps) and their forays into the VoIP and mobile markets are significant because Google will eventually know everything about you.
Google’s strategy is replicated elsewhere across the net. Is it any coincidence that eBay has bought Skype? Or Yahoo Dialpad? It’s not a haphazard plan but a clear land-grab to not only own ‘growth services’ but to also own personal information and data. By aggregating that data and publishing it in the right way all these services will combine to provide advertisers with unparalleled personal information on each and every individual. It will be worth a fortune. It is the media industry of the future, and it is approaching more rapidly than people think.
The information collated on individuals will allow far more than preference advertising. It will allow precise delivery of relevant communications to millions of individuals in ‘real time’. It will also be delivered in a far more personal way, eventually via mobile which itself will supersede the computer and becoming the on and offline medium of choice over the next five years. Civil Liberty campaigners may bleat about privacy issues but I don’t think there is a privacy issue. On the contrary you are only seeing marketing messages that are relevant to you. And I stress the word ‘relevant’. Why, if I was looking for a new car and currently drove a BMW would I mind receiving an ad for a Mercedes E-Class?
The great advertising edifice, made up of TV, outdoor, radio and press is visibly crumbling. Omnicom OPera’s recent announcement that ITV1’s share of TV advertising revenues will fall from 46.8 per cent in 2005 to a forecast 43.3 per cent in 2006 (a drop of £82 million) is a staggering example of this. The old paradigm of mass media is now very quickly being replaced by precision-guided digital media targeting millions of individuals (with advertising budgets following suit). When people look back twenty years from now, 2006 will be viewed as the time that marketers and advertisers finally awoke to the recognition that the media owners of the future will be companies like Google and not the current media monoliths which are slowly becoming extinct.