ACTIVE STUDY: Media Companies Are Concerned About Their Ability To Deliver Audience Through New Media Channels

Posted by Luke Haidarovic Company News
6 8 2015

New research by Active International shows that media companies are investing to build new inventory and pricing models for digital, mobile and social channels

 Active International, the largest global independent corporate trade company, today released results from its study examining how media executives are adjusting their business models to accommodate the rise of new digital, mobile and social (DMS) advertising channels.

The report, Operating in Today’s Media Marketplace, is available for download at www.activeinternational.com/2015MediaReport

The study reveals that nearly three-quarters of media executives (71 percent) are concerned about how to most effectively deliver audience through DMS channels. C-level executives (73 percent) and finance executives (72 percent) are slightly more worried about this than their senior management and marketing counterparts (both 69 percent). Furthermore, 88 percent of respondents note that their technology focus this year will be on expanding their DMS offerings, and over half (52 percent) say their firm will measurably increase investments in programmatic technology in the second half of 2015.

“The proliferation of digital, mobile and social media channels has dramatically changed how consumers access media. This presents a great opportunity for marketers,” said Jim Porçarelli, Active International’s Chief Strategy Officer. "What’s clear from our research, however, is that media executives across departments and title levels are united in their concern around their ability to predictably deliver audience to advertisers through new advertising channels. As a result, the consensus is that improving DMS media inventory and pricing models is a top priority for the industry."

Top Priorities for Media Companies

When asked about their top priorities for 2015, respondents rank reinforcing advertising value by emphasizing content (58 percent) above developing new DMS inventory models (42 percent). But when broken out by survey demographic, C-level and finance executives (49 percent) are far more concerned about developing DMS inventory than their marketing and senior management counterparts (35 percent). Marketing and senior management executives (65 percent) place more weight on reinforcing advertising value than C-level and finance executives (51 percent).

“The ability to promote audience engagement and leverage quality content has long been the cornerstone of media companies’ growth capabilities,” adds Porçarelli. “But the paradigm shift in the marketplace toward DMS channels has significantly disrupted the status quo, and it is clear that the industry is racing to catch up to the new digitally savvy consumer. The good news is that media companies are actively investing to catch up. In the short-term, however, there will likely remain uncertainty among advertisers on how to value the various new DMS offerings. As a corporate trade provider, we work to help advertisers minimize those uncertainties by offering a financial solution that enables them to stretch their advertising budgets and improve ROI.”

Uncertainly Could Lead to New Media Sales Model

Nearly two-thirds of respondents (63 percent) believe the current Upfronts/Newfronts sales model will change over the next three years. Nearly half (47 percent) say that the current model will be completely replaced in the next three years, while 16 percent believe that the Upfronts and Newfronts model will converge into one. Only 37 percent of respondents believe the model will stay the same.

Additional survey findings include: 

  • Nearly eight out of 10 media executives (79 percent) believe that M&A activity will increase in the second half of 2015. 
  • Half of respondents (50 percent) say that media company acquisitions will be driven by the desire to improve multi-channel inventory options and the quality of data and analytics for clients.
  • Seventy-one percent of executives say that pressure on profit margins will increase over the next 12 months. Sixty-six percent say that their company felt pressure on profit margins increase over the last 12 months.

About this survey

Active International’s trading model is built on longstanding relationships with media companies and advertisers. The company commissioned a research study to examine how media companies are evolving their business, inventory and pricing models to adjust to the shifting media landscape. This research is based upon a telephone survey conducted by Market Measurement, an independent market research firm. A scientifically-developed pure random sample of media organizations representing a highly diverse mix of market segments, some with revenues of over $1 billion, were called and asked 19 topical questions. In total, 100 interviews were completed with C-level and senior management executives at media companies. Survey demographics were divided evenly between finance and marketing (50/50 split) and C-level and senior management (50/50 split). All data collection activities were completed during April and May 2015.

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