Myers sees 20-20 at Atomic 2010
The media authority offers sage advice for agencies over the decade ahead: access BTL budgets, bump up innovation investment and embrace interactivity. Video interview included.
Media expert Jack Myers wasn’t pulling any punches at yesterday’s Atomic event in Toronto: if you want your media agency to survive the next decade, things have gotta change.
Myers, a US-based media economist and chairman of the Media Advisory Group, was the afternoon’s keynote speaker at the strategy magazine-hosted conference. His keynote focused on his vision for the media industry until 2020 and how the ad industry can best take advantage of the changes currently underway in the mediascape.
Thanks to the rapid acceleration of media technology, the fundamentals upon which the industry (both selling and buying) is built have shifted to the point where wholesale change in business outlook and models is necessary, he said, noting that for agencies prepared for it, this is perhaps the best time ever to be in the industry.
‘The next five years will be the most exciting in this century. The single most exciting time in your career is right now.’
One of the biggest drivers for success over the next decade for smart media agencies will be to access clients’ below-the-line budgets, tapping into the marketing ecosystem as a whole, he said, noting that marketing is a $30- to $35-billion business in Canada and advertising currently captures about 30% of that. By 2020, that percentage will drop to 10% to 15%.
Right now, traditional media advertising is only 30% of most marketing budgets, while promotion takes up the other 70%. Social media, for instance, is often incorporated into PR budgets instead of media budgets. As traditional advertising budgets decline (and as overabundance of supply forces prices down) BTL budgets can provide a new stream of revenue for media agencies. In fact, Myers predicted, we are likely to see a ‘complete collapse’ of ATL and BTL budgets in favour of integrated campaigns combining all facets of marketing.
What’s driving this change? Interactivity and innovation. Instead of focusing on getting the biggest audience per dollar spent, media agencies should shift their outlook to audience cultivation, moving to a valuation model based on quality of audience instead of focusing exclusively on quantity. The consumer has never been so empowered and smart companies with strong media brands can tap that empowerment like few others, he said.
‘Interactivity has gone far beyond what we anticipated,’ he explained, noting that the issues faced by the media agency have not changed since the 1998 publication of his book, Reconnecting with Customers: Building Brands and Profits in The Relationship Age.
‘It’s exploded and created huge opportunities. But today, those advances are tied to the sale of inventory rather than building connections, emotions and activating the consumer to do something on behalf of the marketer.’
Shifting ‘survival and maintenance’ budget dollars into innovation investment is key, he said, noting that amount commonly allocated to ‘new’ is ‘$0.’
‘The sad truth is that many will continue to ignore those realities and their business models, if they stay that way, will stay exclusively there building audience at high cost and selling inventory at a low cost.’
Myers’ top-three media for smart agencies to watch? 3D TV, mobile and GPS-based marketing, and social media, which he says should only be ignored at marketers’ peril.
‘I believe fundamentally that it’s the single most important media development of the past 60 years.’
MiC interviews Jack Myers after his keynote at Atomic 2010