If you were to judge the health of the media world based on the attendance of a high-level mix of media executives, startups and venture capitalists, life is good. Mobile technology is fueling new paths to growth, the interactivity of the Web is finally coming to TV, and a new generation of tablet computers points the way toward salvation for traditional publishers.
Sometimes appearances are better than reality. In truth, the media world remains hidebound, handcuffed by basic technology challenges and trapped in business models that are increasingly out of date.
Take the fortunes of Publicis Groupe, the host of the event held on its home turf. The numbers tell a rosy story for the holding company. Revenue was up 9 percent in the third quarter and margins were at a healthy 15 percent. Beneath the numbers, however, the company faces challenges overhauling its business. A top executive admitted as much privately, saying all ad holding companies face a raft of challenges, not least a recent 10 percent pay raise at Google that’s bound to drain agencies of talent.
The long-predicted arrival of mobile generated the most excitement at the two-day gathering. Ericsson CEO Hans Vestberg heralded the world reaching 5 billion mobile handsets. Microsoft crowed about its Windows Phone 7. Google demoed technology that uses mobile phones to add interactivity to print ads.
Yet the reality of the mobile marketplace is one of fragmentation and frustration. Babs Rangaiah, vp of global communications planning at Unilever, said the brand is still experimenting in mobile and not much interested in “banners and buttons” offered by mobile ad networks. In a similar vein, the new Mobile Marketing Association CEO, Greg Stuart, bemoaned that “it’s unbelievable how little spending there is.”
Perhaps the largest disconnect was on display by James Murdoch, CEO of Europe and Asia at News Corp. Murdoch laid out his case for charging consumers for news content, noting archly that “if you’re going to monetize something, you should probably not give it away for free.” That belies the mixed track record News Corp. has in the area. The Wall Street Journal has been able to charge for access because most of its subscribers are using corporate credit cards. But the jury is out on subscriptions elsewhere in the empire.
The Times and Sunday Times were put behind a pay wall in July. News Corp. last week crowed it has sold 105,000 digital products, a rollup that doesn’t break out monthly subscriptions. Some estimates put that figure at just 10,000 per month at the expense of most of its Web traffic.
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