Mark Fratrik, BIA VP, and Neal Polachek, Kelsey Group CEO, said the key to traditional media’s future is not operating in a vacuum. Joint ventures by television, cable and newspaper companies are going to become more commonplace.
Not all of the drop in spot sales can be chalked up to the economy, meaning local TV stations are going to have to start taking steps — such as partnering with other media — to be able to weather changes in the marketplace even when the recession ends, experts said today.
Speaking at the BIA’s Winning Media Strategies conference in Washington, Mark Fratrik, BIA VP, and Neal Polachek, Kelsey Group CEO, said the key to traditional media’s future is not operating in a vacuum.
“You see these media now starting to meld and figuring out new business models that before we would have not considered,” Polachek said.
“Instead of these silos of media that we’ve thought about for so many years, we’re going to start to see them coming together,” he said, explaining that such joint efforts will be fueled by the need for media companies to survive and meet both client and consumer needs.
What that means, Fratrik and Polachek said, is that joint ventures by television, cable and newspaper companies popping up across the country are going to become more commonplace.
Bucking the long-held belief that media exist to compete against each other is key to traditional media’s future, particularly with TV station revenue being hurt by slumping ad sales, a proliferation of cable channels and retransmission fees.
“That all is not going to come back,” Fratrik said.
So it is monetizing opportunities being posed by emerging media, particularly mobile platforms, that are expected to see tremendous growth in advertising in the near future, they said.
The $155 billion in local advertising dollars spent in 2008 is expected to drop to $135 billion by 2010, they said. However, the amount of that money being spent on digital advertising is expected to grow from $14 billion to 32 billion during that time.
“This will be the new Internet if it’s not already the new Internet,” Polachek said.
Advertisers like mobile because messages can be personal and immediate, while easily quantified, they said.
Currently, advertisers are putting the bulk of their digital dollars into local search engines. Local searches — such as finding places to eat, shop or do business — account for about 20 percent of all searches, they said.
How traditional media ultimately fare in the changing media marketplace depends largely on how they change to meet today’s new demands and expectations.
“It’s a horse race,” Fratrik said. “It’s really a challenge for local media players to see how they’ll succeed in the future. There will be thinning out, which is how horse races go.”