The word on the street is that multimedia is the future for
international business media. Media owners operating in this field are
kicking each other’s tyres and investigating alliances, with the key
objectives of widening and strengthening their footholds across more
media and geographical markets.
It stems from the mantra that you should make the best of what you’ve
got or can get. Media owners are acting on the logic that resources
across television, radio, print and online services can be shared, and
their combined mass deepens their pockets for further investment. On the
advertising sales side, the media owners can then perform a
marketing-orientated function by selling across the whole portfolio,
offering multimedia solutions to clients in their mission to reach
business people.
In January, Dow Jones’s European Business News and Asia Business News
joined forces with NBC, creating the joint venture, CNBC. All three news
operations had been losing money and the deal was designed to fix that
by consolidating resources. Dow Jones’s overall portfolio also includes
products such as the Wall Street Journal, the Wall Street Journal radio
network, the Central European Economic Review, the Wall Street Journal’s
European quarterly magazine, Convergence, its weekly magazine, Barron’s
and the Wall Street Journal Interactive, which was the first newspaper
website to charge users for access.
Dow Jones makes a point of showing off the speed with which it can get
news on air, thanks to its various news centres. One example of this
shared news happened in May this year when Pakistan began conducting
secret nuclear tests. At 7.12pm in Hong Kong, the editor of Dow Jones’s
weekly, Far Eastern Economic Review, found out about the tests. He
immediately passed the story on to CNBC Asia, which interrupted its
Asian Wall Street Journal evening broadcast at 7.23pm to go live with
the exclusive report. Within minutes, CNBC was broadcasting the story
worldwide.
Bloomberg’s talks about taking over the European indicates that it wants
to own additional titles beyond its existing portfolio of TV, radio and
magazines. Having grown organically, the company’s different products
already share a significant level of resources. It runs ten TV channels
worldwide, a radio station in New York which is syndicated across the
US, and it supplies business reports to a handful of UK radio
stations.
In the next few months it aims to launch a radio news service for
European syndication.
Bloomberg also has its fingers in a number of print-based pies. The
company has two magazines in the US and Bloomberg Money, a joint venture
with City Financial Communications, in the UK. It is also about to
launch the same title in Italy. Michael Bloomberg, the founder and chief
executive of the operation, says: ’Business television will always
appeal to a niche market. Even as that market expands, its inherent
limitations make it difficult to make money out of a standalone channel.
The product needs the economies and cross-promotional opportunities
other media products can supply.’
Following its merger with Turner Broadcasting System in 1986, Time
Warner also has a sturdy stock of business media spanning CNN
International, CNN Airport Network, the Time and Fortune magazines plus
a mass of non-business media from Sports Illustrated to TNT and the
Cartoon Network.
And, like Bloomberg, Time Warner considered making a bid for the
European.
So how do these media owners go about selling advertising across their
portfolios? And does the strength of their portfolios give them any
advantage over rivals for the advertising dollar? The systems vary but
two key views are shared by most: that volume discount is not the
desired outcome, and that presenting your company’s portfolio to clients
is a valuable marketing and relationship-building tool.
Martin Wright is the vice-president of the Turner Marketing Solutions
Group, which was set up three years ago as an asset-leveraging interface
between the company’s products and clients.
He says: ’The phrase ’cross-media deals’ is much used and abused, as it
implies bundling which leads to discounting. That’s a commodity market
which we have moved away from, a ground where others can fight. We’re in
the business of building long-term strategic marketing partnerships with
global advertisers.’
His boss, David Levy, the president of Turner Broadcasting’s
international advertising sales, backs up the argument that these sort
of marketing functions must take a long-term, strategic approach to
attracting advertisers.
’You must build up a relationship to show the opportunities which exist.
Maybe it won’t work with one client this year but that doesn’t mean they
won’t come back later. They may not have had the right resources
internally to exercise what you’re offering. If you can guide them
through all the opportunities, simplify it, that’s a huge asset for a
corporation.’
The company offers a mixture of advertising packages and ’insight-driven
marketing solutions’. Despite not wanting to look too keen on volume
discounts, it has just set up an incentive for its magazine advertisers:
those who buy four pages in Time International and Fortune International
get a free bonus page in Time’s Man of the Year issue and Fortune’s You
Inc issue.
With these three companies, advertisers can contact any sales point in
the portfolio to arrange cross-media deals. But does this give any added
value to the international media planners and buyers? Liz Workman, the
vice-president executive regional media director of Leo Burnett, says
that media owners’ ability to sell across their portfolios vary
according to how advanced they are in implementing this sort of sell.
’Sometimes it can be difficult because of the media owners’ profit
centres,’ she says. ’If you don’t have one single profit centre, it’s
difficult to get the deals done because everyone’s on a different
agenda. In practice it takes a lot of driving through.’
Pearson, for example, which owns the Financial Times and the Economist,
does not sell across its portfolio, although observers suspect it might
be investigating the notion. Pearson declined to comment on its
strategy, however, on the grounds of commercial sensitivity.
According to those who have set up marketing solutions groups to sell
across media, success depends on the commitment of those at the top of
the corporations. Levy says: ’The process involves introducing new
systems, thoughts, directions and changes. It really does stem from the
top down.
Ted Turner and the Time Warner chairman and chief executive, Gerald
Levin, certainly didn’t merge these two companies not to have this type
of synergy, and as long as they are pushing it down and their direction
is being pushed by their lieutenants, it can end up coming down very
quickly.’
Workman, like other planner buyers, says the advantages of cross-media
deals often lie beyond buying traditional advertising space. At Dow
Jones, for example, the heads of advertising sales across the different
products communicate regularly with each other in a bid to sell the best
of their resources to clients. Sheena Forster, the advertising director
of the Wall Street Journal Europe, says a big advantage is being able to
offer clients solutions which cross-refer their advertisements and
leverage the activity through tactical work.
’From a sales point of view, it makes it more exciting because it’s very
much a question of teamwork and we are helping each other all the way.
It means we have to be more creative and clients enjoy having that
opportunity,’ she says.
Many buyers are loath to get involved in cross-media deals simply for
the sake of it. David McMurtrie, the director of international media at
Mediacom, says: ’The proportion of money spent on these deals is
small.
And there’s politics on the media owner side as well as on the client
side. At the end of the day there has to be some clear benefit to doing
these deals. They shouldn’t be done just because it’s possible. The
deals don’t greatly reduce the workload, and don’t let anyone tell you
that you do it for cost savings. It just doesn’t work like that.’
But while the owners of these glamorous portfolios boast of their
ability to reach business people across the world in the right
environment, there are threats coming from all directions. One senior
international planner buyer, who asked to remain anonymous, says he
often tries to avoid the business media when trying to reach business
audiences. ’I’d rather get them while they’re watching or reading about
sport and having a good time,’ he says.
And Workman adds that targeting these people can be difficult because
they are not enormous consumers of media and their consumption is
therefore based on need to know. ’For example, if the FT is their only
information source, they are not necessarily going to start looking at
offshoots. They are not particularly innovative or early adopters.’
But if business users are slow to change, that can be translated as
loyalty.
And if the brands are in tune enough with each other, there is a fair
chance that when they do experiment with different media, they might
just try yours first.
Ivor Kelly, the managing director of Dow Jones International, says: ’In
some ways we have a homogeneous audience around the world. Not every
business person has a one-stop medium. They access their information
from all media: some are more leisurely applications, others are a quick
hit.’
Further threats come from online information, tailored to the readers’
interests. Hardly any of these services take advertising and are funded
by premium rate subscriptions. But, as we have been hearing throughout
the industry in recent years, the multimedia owners insist they are not
overly fearful of losing their readers or viewers to online sources
because the act of reading a daily newspaper, or watching international
news while staying in hotels on business trips, will always occur. Plus
they are putting their own investment into new media.
There is also an argument that the already small international
advertising cake is being nibbled by too many snackers, such as inflight
media and some of the smaller or newer news operations such as BBC World
and EuroNews.
The threat from the latter two is not considered serious right now, but
observers expect both to form further joint ventures within the next few
years. Then the scale of their combative abilities will be more
real.
That’s not to suggest existing players are complacent. Further
consolidation is anticipated by all, not only to ensure a spread of
different media across the portfolios but to protect against regional
downturns.
Levy says: ’In this competitive market, it’s harder to be a smaller
player. Costs are rising so, if you can offset your sales structures
with your marketing, you need to do more than just have one entity. You
can survive these troubled times if you have the overall infrastructure:
in some years the Asian economy can be hurt and Europe will do better
and vice-versa. A wide geographical spread can allow you to have the
swing years (when revenues fluctuate in different regions).’ He
anticipates we will see more marriages between distributors and
programmers across TV, cable and print.
McMurtrie reckons consolidation will be vital because the investment
required in exploiting digital TV and the internet will be massive. He
believes many of the specialist business-to-business publishers could
lead the way with internet applications, and eagerly anticipates the day
when even more targeted television systems are in place.
When asked where he sees digital opportunites leading, Wright bullishly
sums up: ’Global, regional, local, personal. Everything from ’our’ to
’me’ TV.’
