Gordon Borrell recently hosted a webinar that hit on the highlights of his #LOAC2019 (Local Advertising Conference) held in New York City. The shocker, for me and many others came when Gordon said the future for media expenditures would be a process of “thinning the herd.”
Media Overpopulation
To put things in perspective, Gordon shared how an over-populated media landscape is impacting local advertisers.
- 1,300 daily newspapers, 6,500 weeklies
- 4,700 printed directory books
- 4,665 AM radio stations, 6,757 commercial FM radio stations
- 1,760 Class A TV stations
- More than 1,000 cable systems with local sales staffs
- 660,000 podcasts were actively produced in 2018
- 495 NEW TV shows were introduced last year in addition to what’s already on
- PLUS, local ad sales are taking place on Facebook, Google and Amazon
Another way of looking at this media explosion, is that a TV market now has an average of 126 local media entities. To view a recording of the webinar, contact Corey Elliott HERE
Action – Reaction
So, how are the people who buy advertising responding to this media abundance?
Gordon identified three trends:
- They are increasing buying for types of media, from 5.5 to 8 different ones
- They are decreasing the number of companies from which they buy advertising, from 5 to 3.5 companies
- 90% of their media buys are being made with companies who can bundle traditional and digital advertising
Facebook – Google – Amazon
When a new Ollie’s store opened in Winchester, Virginia, my Facebook newsfeed was peppered with announcements. During the fall elections, politicians also used lots of Facebook ads to try and get elected.
I can’t go on Google or Amazon looking for something without being followed around the internet with ads for that very thing.
eMarketer says that in 2018, Google and Facebook took 60% of the total digital ad spend. Amazon was third with 6.8% but is predicted to grow it’s share by more than 50% in 2019.
Think about that, these three companies will rake in over 68% of the digital advertising dollars spent this year.
eMarketer also says that by 2023, they expect digital advertising to account for 66% of total media spend.
Post-Capitalist Society
About ten years ago, my good friend John Parikhal recommended I read Peter Drucker’s book “Post -Capitalist Society.” Wikipedia summarizes Drucker’s thesis this way:
“The book states that the “First World Nations” and in particular the United States have entered a Post-capitalism system of production where the capital is no longer present because it doesn’t belong to one person or family but to a series of organizations such as insurance companies, banks, etc. Because of this, normal citizens become virtually owners of the great American enterprises, being owners of the capital, therefore, not destroying but overcoming the capitalism. The book foresees that the post-capitalist society will become a society of organizations where every organization will be highly specialized in its particular field.”
Sound like what we are witnessing in today’s world?
Accountable Capitalism Act
Recently, Senator Elizabeth Warren introduced a bill in Congress called the “Accountable Capitalism Act.” It targets what Warren says is the root of the country’s “fundamental economic problems.” You can read the Boston Globe story on the bill HERE
In essence, we have moved from a time when corporations cared about where they lived to one where only increasing shareholder value matter.
I remember a time when the insurance companies of Hartford, Connecticut were once heavily invested in the good of Hartford. I grew up in a GE city. General Electric made a positive impact on things and participated in growth and prosperity of the area.
In the 1980s, things changed. Corporations shifted from caring about both employees and investors, to only investors. The record profits went all to investors, and the people who worked hard to produce those profits didn’t get a share of them.
Increasing Shareholder Value
I first wrote about how the concept of “increasing shareholder value” was a dumb idea three years ago. You can read that article HERE
Real American capitalism was when both company and worker did well together.
Senator Warren has also raised many eyebrows with another plan that proposes to break up some of the largest US tech companies, like Amazon, Google and Facebook. Based on the trends in digital advertising, those of us in broadcasting would probably agree with Warren.
In essence, Warren says that high tech has created an unfair playing field. They control the platform, have full access to all the data, and then can either unfairly compete with companies, buy them out entirely or run them out of business. It reminds me of the type of things people said as Walmart covered America with their form of brick & mortar retailing.
Get Bigger or Get Out
Cox Media has recently begun liquidating its radio, television, newspaper and other media properties. The company’s leadership has determined that scale will be a determining factor in the future, and they either need to get bigger or get out. Cox has chosen the latter.
Current Trends
It would appear that in reading the tea leaves for ad supported media, that everything is currently headed in the direction of fewer entities owning all the media outlets, and advertisers buying their media on those platforms that can bundle it all together.
“Monopolies are a corruption of the marketplace. Breaking them up — allow[s] entrepreneurs to enter the market, giving consumers more choices, and giv[es] workers more jobs…”
-Adam Green, cofounder, Progressive Change Campaign Committee
I know there are many radio folks who saw the Telcom Act of 1996 as the beginning of the end of commercial radio as we knew it. That act is what caused Wall Street to enter the broadcasting business and apply their dumb idea of “increasing shareholder value” to another industry. It was the beginning of the consolidation of radio and we all know how that’s turned out.
Growing up in the 20th Century, things looked like what they were. Telephones were easily identified as telephones. Television sets were easily identified as televisions. And radios were easily identified as radios.
our social media pages. In my case, it’s a cathedral style radio made popular back in the 1930s. A style of radio I never owned until I received a retro transistorized version at a company manager’s meeting back in the late 1980s.
on their phones, I wondered if the new icon for radio might be just that, a smartphone device. But then, this same device could also represent a TV, a camera, a movie camera, a book, a newspaper, a magazine…well you get the idea, a lot of media was instantly replaced by this singular device.
never had. She’s always there, waiting for me to call her name and fetch for me whatever I need, be it the latest news, weather, wind chill, traffic conditions, music, and more.
These days, radio still dominates in the car, and the vehicles being produced today feature entertainment systems. These dashboard entertainment centers are loaded with unprecedented engagement capabilities and each one is accessed by an identifying App. Companies like Pandora and Spotify are providing a content rich environment to take full advantage these entertainment systems.
Albert Einstein said “We can’t solve problems by using the same kind of thinking we used when we created them.”
In a lot of ways, the future is here, now.
Roger Miller was a very creative guy. His 1966 hit song, “
Radio’s last bastion of domination is the automobile (aka SUV, pickup truck etc.). In the home, voice activated devices are replacing AM/FM radios. I own 3 Echos, and Alexa has become a real friend of the family.
I know that Downton Abbey premiered on PBS back in 2011, but at that time I was doing my own “Mr. Molesley career transition” (more on that in a moment) – from radio management to broadcast professor – in addition to moving from New Jersey to Kentucky, I didn’t have a whole lot of time to watch the series. Amazon Prime changed that for me in 2019 when I noticed it had made available the entire six seasons (52-episodes).
of the Titanic also set in motion more intense regulation of wireless communication for ships at sea. The Wireless Ship Act of 1910 only required ocean-going ships to carry radio equipment when visiting the United States and only required a single radio operator. That was amended after the Titanic sank in 1912 to include vessels traveling on the Great Lakes in addition to those on the oceans, plus requiring two radio operators with the wireless being manned around the clock.
The scene could not be more amazing, seeing everyone gathered around the awkward looking device in the great hall, much as many Americans do for a Super Bowl, waiting to hear the King. When he comes on, the family all stands at attention, in much the same way they would if they were in his presence to hear him speak.
Getting back to Mr. Moseley, he’s a fine example of what I mean and how we are similar. The downsizing he encountered saw him go from a trained butler to a second footman to a laborer in the streets. He saw his working life as a series of steps down and not one that was advancing in stature and pay. But Mr. Moseley loved learning and once dreamed of being a teacher. An encounter with the local headmaster of the town’s school led Moseley to taking a series of exams which proved him to be an exceptional scholar and he was then awarded a teaching position with the school. Moseley’s life was now moving in a direction he only previously dreamed about.
Last week I told you about how our world is exploding with media to the point of over-saturation. Not only are we drowning in a plethora of media, the rate of new ways to communicate keeps accelerating at an unfathomable pace.
I was reviewing the last FCC report about the number of broadcast stations in America as of December 31, 2018 and in my head I found myself singing a parody of the Bellamy Brothers song, “Too much is not enough.” Only my version was “too much is way too much.”
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