UGLY DUCKLINGS NOW MEDIA WORLD DARLINGS

By Published on .

Most Popular
We carried a big, bold one-word headline on the top of our front page a few weeks ago: Realignment. That word was used to show how IBM's agency consolidation and Fox's TV affiliate grab were both part of an ongoing process that is paving the way for a new lease on life for tired old businesses.

The process continued with The New York Times' sell-off of a group of women's magazines to Gruner & Jahr.

Isn't it interesting how quickly seemingly lackluster lines of business take on a whole new luster when conditions suddenly change? In the blink of an eye, because of moves made by IBM, Fox and Gruner & Jahr, the future of the full-service advertising agency, network television and consumer magazines looks a whole lot brighter.

When buyers of the various components of the Ziff computer publication empire and the Madison Square Garden sports operation emerge, I have a strong hunch the new activities will give positive energy to a galaxy of other businesses.

All of a sudden, media such as network TV and consumer magazines, which had almost been banished to the trash heap, are the darlings of the communications world. What changed?

A more robust advertising environment certainly helped. Marketers, beset by giant retailers to ante up an ever greater percentage of their dollars to buy shelf space, have realized that they have allowed their brands to be held hostage. Now they are rebuilding weakened brand franchises and are returning to image-building media advertising with a vengeance.

"The use of price promotion will not be as strong as it was in the latter part of the 1980s," says Veronis & Suhler principal John Suhler. "Also, in an expanding economy, rather than focusing attention on price reductions to stimulate sales, marketers support brand identity, which is more easily achieved through advertising." A new report by Veronis & Suhler says the communications industry is the fifth fastest-growing business in the U.S.

You couldn't give away media properties a year or so ago, and now a feeding frenzy is beginning to develop. Rupert Murdoch, in snaring new affiliations for his Fox stations, saw what nobody else saw-that network TV had a very valuable distribution system.

Mr. Murdoch has a big advantage over his competitors. He is playing the game on a worldwide playing field, and most of the other guys are not. When his detractors gleefully predict that he will take a bath on NFL football they aren't taking into consideration that he plans to beam the NFL games into homes around the world. He can provide multinational advertisers a worldwide marketplace, and the U.S. to him is just one link in the distribution chain.

So as we head for the final lap of the 20th century, we're beginning to see things really aren't so scary or so different. The communications world might have been hit with a barrage of meteors over the last few years, but just like Jupiter it has managed to stay in its time-worn orbit.

In this article: