IBM releases study: media companies failing to meet demand

Posted by Caroline Huber on March 25, 2009 at 11:33 AM

IBM released a global media study this week that reveals that media companies are failing to meet the expectations of digital consumers and advertisers. The study, titled "Beyond Advertising: Choosing a Strategic Path to the Digital Consumer" surveyed 2,800 consumers across six countries and included interviews with advertising industry professionals. Its results indicate four important media trends: the adoption of new distribution formats, a shift in advertising spending, digital migration of platforms, and the emergence of new capabilities due to moves by new and existing player.

Consumers have increasingly embraced digital content services such as Twitter, YouTube, and Facebook and prefer to receive news and find information digitally. These new formats present challenges to advertisers as they must market on a new platform that requires niche-specific ads and personalized search capabilities. Advertisers have attempted to follow their audience, and the study shows that 63% of global Chief Marketing Officers expect to increase online marketing spending while 65% will decrease traditional advertising.

"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. "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."

IBM's survey reveals that as of now, publishers are not prepared to meet the demands of changing audiences and marketing. It reports that 80% of advertising industry participants interviewed believe the media industry is at least five years away from delivering true cross-platform advertising.

According to IBM, publishers must "fundamentally" change the way they deliver information to audiences. Saul Berman, IBM's global leader for strategy and change consulting services, said, ""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."

Source: Fox Business, WorldScreen.com