Campaign Report - European Media - Foreword - We may be facing troubled economic times but, Adrian Birchall argues, media owners in Europe would still be wise to concentrate on improving their offering to clients ever keener to make the most of successful

At the time of writing, the business pages of the quality newspapers are reporting concerns that the financial problems being faced by Asia and Russia may soon be prevalent in Latin America. If this proves to be the case, how far behind will Europe be, or indeed, how far behind is a world economic crisis?

At the time of writing, the business pages of the quality

newspapers are reporting concerns that the financial problems being

faced by Asia and Russia may soon be prevalent in Latin America. If this

proves to be the case, how far behind will Europe be, or indeed, how far

behind is a world economic crisis?



While these words do not strike an optimistic note, given the strong

links between economic performance, particularly in terms of company

profitability and consumer expenditure, it would be foolish to ignore

some of the signs that are being highlighted by the financial

journalists. It is of particular relevance at this time because the old

adage that the only constant is change is certainly applicable to the

European media scene. So, while advertisers could be faced with a

slowdown in demand for their goods and services, and while agencies

could see their revenue streams struggling to achieve real growth, some

of the major media owners could have the ’double whammy’ of lower income

from advertising and a lower consumer uptake of the new television

technology. The latter is already challenged in the UK by the ’battle of

the formats’ and economic uncertainty in the eyes of the consumer can

only compound the problem.



If we adopt a more optimistic positioning, or accept that we are

entering a recessionary phase - albeit short term - what does the

medium/long-term future hold for the European media sector?



As part of the answer to this, it is important to stress that despite

the dynamic nature of many elements of the media scene, the maxim

repeated above about change being the only constant is not universally

applicable.



There is a danger that, as the number of media choices continues to

expand at a dramatic rate and the whole European media scene takes on

even more complex characteristics, the media practitioners put too much

emphasis on the internal micro elements of media rather than on the more

fundamental relationship between the brand and the consumer.



Because here is the real constant, the need to communicate brands to

consumers in such a way as to produce maximum effective response. This

task does not change although, clearly, the means of delivery can and

will.



For the media owners, thinking particularly of those in the broadcast

sector, the required levels of investment are accelerating and, as the

advertising income fragments, the need to build the revenue stream from

subscription customers will also grow. This increased vulnerability will

mean more mergers and strategic alliances as companies look to both

spread their risks and strengthen their competitive positions. It is not

just Murdoch who sees the important stage as the World and not Europe;

and we will see more examples of the recent report of CLT’s interest in

US television.



Running in parallel to these media-owner developments which are not the

sole domain of broadcasting, are the mega-mergers on the agency/media

company side. Here there are two key motivating pressures. The first

requires media companies to be in stronger positions to negotiate on

their client’s behalf with the major media owner companies.



Although pan-regional negotiations and indeed worldwide negotiations are

still relatively few in number, their incidence will grow in the coming

years. The second pressure is from within the agency/media company

sector itself. The almost universal acceptance is that in the future,

for multi-national companies, being big will not be sufficient - you

will need to be very big. (That is not to say that smaller, high quality

local operations will still not have good market opportunities).



This is not ’macho speak’ and it does not relate purely to volume. It

relates more to the funding of the resource required to provide

genuinely competitive media services for clients. Proprietary systems

and proprietary research will be two of the key differentiators between

media companies and the required investments are very significant.



So while the media owners face their own set of challenges, the race is

on to establish real and effective media company networks that can

provide both local and multi-national clients with the best media

services. I am sure that nobody involved in the developments, certainly

including myself, underestimates the size of the challenge; in

particular the need to turn words on paper into a fully operative media

service that provides clients with real added value.



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