Looking for Silver Linings and a Plan-of-Action

By Jack Myers ThinkTank Archives
Cover image for  article: Looking for Silver Linings and a Plan-of-Action

On Wednesday April 15 at 1pm ET, MoffettNathanson research analyst Michael Nathanson and I will discuss and debate the past, present and, primarily, the future of media in the first Collective Leadership for Renewal and Growth fireside chat. Register now for the MediaVillage Virtual Upfront & Relief Zoom video conference.

Looking at the future through the COVID-19 blizzard, there may be a silver lining. Like an inner city that declined for decades before the true impact became a new reality, media industry patterns and trends have been apparent for decades. The COVID-19 crisis will accelerate already existing economic and organizational realities and reduce the clutter that's been clogging our economic ecosystem. It will be two-three years before our new reality is clear, but we can look at pre-2020 patterns for guidance and to set a plan-of-action today. Wall St. investors have consistently reduced the value of companies that are overly dependent on legacy business models. These models were built on advertiser demand exceeding inventory supply; an agency compensation structure built on 15% commissions paid by media and therefore not a cost center for marketers; currencies measures developed to value reach and frequency vs. R-o-I performance. The marketplace is overly populated by thousands of venture-funded companies that are overdue for consolidation or simple disappearance. Many bloated and aging organizations and their leaders have failed to modernize the corporate infrastructure. By 2022 leaders of media and advertising companies who have not aggressively recognized and responded to these realities will no longer be empowered. Their companies will not recover. The core component parts of advertising — strategy, media, creative, promotion and data — have been locked for decades into a siloed dysfunctional ecosystem. As we look back at 2020 and 2021 at an industry that has been slowly but surely declining, corporate management will be judged by how quickly and decisively they reacted to warnings and signals. Their economic and organizational viability will be defined by how effectively they integrated organizational capabilities and restructured across silos to centralize and implement a coordinated response to marketplace realities.

Solutions are not a mystery — they live in four clear categories of B2B operations in which media companies have consistently under-invested: B2B market intelligence, online learning resources, executive leadership communications, and new majority talent development. KNOWLEDGE. WISDOM. COMMUNITY. HUMANITY.

In June 2017 I wrote "there's a growing fear that a major economic disruption, parallel to the collapse of 2008, will send the economy into a sustained tailspin. A market crash will trigger a slowdown across all business sectors and be reflected in advertising budgets. Many of the troubling economic signals that appeared prior to the crash of 2007-2008 have reappeared but are hidden by unconventional monetary policies. Failure to recognize and respond to these risks… is the biggest threat to the world economy. Bottom line, the media community faces a highly uncertain future. Both buyers and sellers can hope for the best and plan accordingly."

There will be no return to 'business as usual' and no 'new normal' until 2022 at the earliest. For many companies and their executives, there will be no new normal. Overall corporate marketing investments will continue their nearly three-decade decline. Professional and college sports may return this year but not until the 4th quarter and played without fans present. It's likely that the 2020 Major League Baseball season and all 2020 NCAA sports will be cancelled in full. Production of most original content has been halted and new programming is unlikely to be available for network TV and OTT until Spring, 2021. Pivotal Research analyst Jeff Wlodarczak writes "Without question it is likely to be a very ugly '20 for media/leisure/advertising/movie theaters sectors even if we hit peak COVID-19 in the next month or so…. We believe it is unrealistic to expect a return to large gatherings/end to social distancing until sometime in '21."

This is the time for leaders to lead. Many are waiting until there's more visibility into the future. That's a plan of inaction rather than action. Surviving through this crisis and building a model for success beyond it requires a plan. The silver lining in this life-altering period is that the system will be cleared for those who set a clear navigational path and reorganize to follow the signposts to growth.

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