Fundamental changes in a media business recovery

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We have been in the middle of the perfect storm since September. Beginning with the demise of Lehman Brothers through February, all the markets were in free fall. The only other period that I can compare this to is after 9/11 in the fourth quarter of 2001, when the economies of the world ground to a halt and Herculean efforts were required to jump-start the world stock exchanges. While the wheels of commerce ground to a halt during both of these periods, this recession has been much deeper and cut a wider path of destruction. After the collapse of Bear Stearns and Lehman, all eyes turned to Merrill Lynch. As we have recently learned, Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke were not taking anything for granted, and Ken Lewis, CEO of Bank of America, could not walk away from the Merrill Lynch deal even after he learned the extent of its losses in December. While the bailout of the financial industry was getting under way, attention turned to the automotive industry. Could anyone have predicted that the American automotive industry would be brought to its knees, or that two of the Big Three—Chrysler and General Motors—would end up in bankruptcy and need to be bailed out by the U.S. Treasury? We were not looking at run-of-the-mill businesses, but rather American icons that once were the envy of competitors around the world. The events of the past months will have a lasting impact on how we conduct business and will shape our information industry for years to come. What will the markets we serve look like in 2010 and 2011? I sense that we will initially emerge as a smaller and more focused industry. Many venerable b-to-b names will not survive intact. Some of these have been part of the industry since the beginning of the 20th century, but they have not evolved and have lost focus with unwieldy portfolios, serving too many markets. Others that were acquired when money was cheap are now overleveraged and will need to go through a process of deleveraging. In many cases, their new owners will be their former lenders. As the recovery accelerates in 2010 and beyond, the debate between branding versus lead generation will intensify. Over the past several years, we have become expert at developing lead-generation programs that meet our clients' needs. Lead generation will remain a high priority for b-to-b marketers and will continue to fuel the growth of all vertical sectors. We will continue to refine how to package and deliver those leads in formats that work best for our clients. But the best marketers will restore the equilibrium between branding and lead generation. The difference now, though, compared with how we emerged from the 2001 recession, will be that the majority of branding dollars will be spent online. Print will continue to be a part of that mix but, as we accelerate into the digital world, it will represent an increasingly smaller percentage of overall marketing budgets. In addition, live and Web-based events, together with rich data and analytics products, will command a larger share of marketing services budgets. Companies that have not invested in content management systems (CMS) or had their editors tagging content for easy repurposing will not survive as strong competitors. There will also be less competition from our old competitors, many of which have made deep cuts to stay afloat. Meanwhile, nimble all-digital competitors will emerge very strong. Many of these still reside in the portfolios of venture capital companies, where they have been nurtured during the downturn and are now positioned to grow quickly in the recovery. There is another Google waiting to emerge, as during the last recovery, demonstrating that marketing and advertising spending have not disappeared, but that technology has provided more efficient solutions that will meet market demand. Jim Casella is CEO of Asset International. He can be reached at [email protected]
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