IBM Study: Media Companies Falling Behind in Digital Space

NEW YORK: A new study from IBM reveals a "growing rift" between advertisers, consumers and content owners, as media companies "struggle to keep pace with" new demands from tech-savvy viewers and marketers.

The study, which surveyed 2,800 consumers in six continents, as well as ad industry professionals worldwide, states that "media companies are falling behind in meeting the growing expectations of digital savvy consumers and the advertisers looking to reach them," and points to a "growing rift between advertisers and content owners, media distributors and agencies."

IBM is calling on content owners to "fundamentally" change the way they deliver information to audiences. Saul Berman, IBM’s global leader for strategy and change consulting services, and co-author of the new study, states: "To succeed—especially in the current economic environment—media companies will need to develop a new set of capabilities to support the industry’s evolving demands which include micro targeting, real-time ROI measurement and cross-platform integration. Now is the time for companies to move quickly to become more effective with their assets and build for the future."

Beyond Advertising: Choosing a Strategic Path to the Digital Consumer cites four key trends in the media business today: consumer adoption of new distribution formats, a shift in advertising spend, digital migration of platforms and the emergence of new capabilities due to moves by new entrants and existing players. 

The report notes the adoption by consumers of sites like Twitter, YouTube and Facebook. Between 2007 and 2008, the adoption of social-networking tools soared to 60 percent from 33 percent; online/portable music services more than doubled to 46 percent from 22 percent; mobile Internet data plans nearly tripled to 41 percent from 15 percent; and access to mobile music and video quadrupled to 35 percent from 7 percent.

"Media, entertainment and advertising agencies must realize consumers are open to sharing information under the right conditions," said Bill Battino, the managing partner of the global communications sector at IBM Global Business Services and co-author of the study. "Our research shows consumers are willing to trade knowledge about their usage and preferences for content and associated targeted marketing offers. Companies that excel in permission-based advertising will take share of marketing dollars."

Advertisers are following consumers to new platforms; the study indicates that 63 percent of global CMOs expect to increase interactive/online marketing spend while 65 percent expect to decrease traditional advertising. Agencies, content networks and distributors, the report states, are not ready to meet the demands of the digital consumer and advertiser. Eighty percent of advertising industry participants interviewed for the study expect the industry to be at least five years away from being able to deliver true cross-platform advertising (including sales, delivery, measurement and analysis).