Media at the Millennium: the Next “BIG THING” A presentation for Indiana University September 2000 Intro Personal history Ask about orientation of class toward various marketing jobs: advertising? Sales? Brand management?

To discuss trends in the Media Industry today Purpose To discuss trends in the Media Industry today And why “Getting the Medium Right” is becoming the primary focus of the marketing world Here to talk about the state of the media industry today and more specifically to propose an argument that having a good understanding of media is crucial to any one in marketing today ;….and will be even more crucial in the future

What is a Medium? Webster’s definition is as good as any today. Webster leaves the door open for a medium to be just about anything that can be used to convey or accomplish something and in today’s media world that broad definition is probably a pretty good one

What is a Medium? “An intervening agency, means, or instrument by which something is conveyed or accomplished” Webster’s Webster’s definition is as good as any today. Webster leaves the door open for a medium to be just about anything that can be used to convey or accomplish something and in today’s media world that broad definition is probably a pretty good one

The Media Industry Think of the media industry as what stands between marketers and their customers

How many possible media forms can you name?

Media selection is the business of making choices

The number of choices is growing exponentially each year

National TV Cable TV Network TV Syndication PBS Unwired Pay TV Sat. AM Kids, Early Morning, Affiliate, Sponsorships, Early Fringe, VHF, Late Night, UHF, Sports, Daytime, Infomercials, Independent, Prime Access, Direct TV, Primetime, Evening News, Specials Price is Right, Dawson’s Creek, 7th Heaven, Ally McBeal, Law & Order, Friends, All My Children, Today, West Wing, Dan Rather, Cosby, Wasteland, As World Turns, Hercules, Good Morning America, Seinfeld, 60 Minutes, Later Today, Regis Philbin, Oprah, Cheers, Frasier, Xena, Dateline, WWF Smackdown, Roseanne, Cops, Chicago Hope, JAG, Voyager, Shockwave Cinema, ER, 20/20, Felicity, NFL, Pretender, NYPD Blue, Jeopardy, Tonight Show, Wheel of Fortune, Sports night, Roswell, Letterman, 3rd Rock, Charmed, Saved by the Bell, Doug, Cold Feet, Party of Five, WW of Disney National TV And within each media form there is an almost endless array of choices. For example let’s take the medium of National TV Nat’l. TV + Net TV, Synd, Cable, PBS Within the national TV medium, there are at least 6 different mediums, each an industry to itself - network TV, syndication, cable , PBS and satellite TV Nat. TV + Net TV, Synd, Cable + ABC, CBS, NBC Within each of these are even more choices in terms of stations, formats, and programs. There is CBS, NBC, ABC, FOX, Oprah, Comedy Channel, TBS, etc. Nat’l. TV + Network + ABC + Shows & others And with each of these is a whole slew of programs like Law & Order, Friends, The West Wing, All My Children, or the Today Show. And within each program there are multiple ways to buy time - you can buy :30’s or :60’s or :15’s or 1st Pod or live or repeat, etc., etc. You see…it’s a huge and very complicated business and this is only one of many different mediums!!!!!

Magazine Women’s service, General Interest, Entertainment, Home, Fashion, Beauty, Garden, Epicurean, Finance, News, Do-it-Yourself, Technology, Music, Computers, Travel, Science, etc., etc., et., USNews, Newsweek, Time, Emerge, New Yorker, Parade, USA Today, Business Week, Mac Leans, Jet, Washington Post, LA Times Magazine, New York Times Magazine, etc., National TV And within each media form there is an almost endless array of choices. For example let’s take the medium of National TV Nat’l. TV + Net TV, Synd, Cable, PBS Within the national TV medium, there are at least 6 different mediums, each an industry to itself - network TV, syndication, cable , PBS and satellite TV Nat. TV + Net TV, Synd, Cable + ABC, CBS, NBC Within each of these are even more choices in terms of stations, formats, and programs. There is CBS, NBC, ABC, FOX, Oprah, Comedy Channel, TBS, etc. Nat’l. TV + Network + ABC + Shows & others And with each of these is a whole slew of programs like Law & Order, Friends, The West Wing, All My Children, or the Today Show. And within each program there are multiple ways to buy time - you can buy :30’s or :60’s or :15’s or 1st Pod or live or repeat, etc., etc. You see…it’s a huge and very complicated business and this is only one of many different mediums!!!!! Time Digital, Time Women Select, Time Top Management, Time Business, Time Top Zips, Time Gold, Time Families, etc., etc., … 600 different configurations of Time each week!

Growth in Number of Choices has been driven by; 1. Technology 2. Better Data/Research 3. Creativity of the Media Community The explosion in the number of choices has been driven by three things…….

1. More Media Choices coming into the home Technology 1. More Media Choices coming into the home 2 More/Better ways for consumers to manage the choices 3. A means for consumers to “talk back” to the media On the technology front you have no doubt all heard terms like “Broadband” “Fiber-Optics”, and “Digital Compression”. We won’t bore you with a technology lecture. The big deal with all of these is that consumers now are able to get more media choices in their homes. The average cable tv home has 70 channels and the capacity for many more-as in 500 to 1000 channels. And that’s not even talking about the other way for TV programming to get into the home :Internet and Web TV.

1. Larger/ more complete customer databases Better Data/Research 1. Larger/ more complete customer databases 2. Better ‘classification’ systems ( i.e. Geo-demography) 3.More sophisticated modeling But technology is just one of one aspect of our business.

Creativity of the Media Community 1. New place-based alternatives 2. Integrated multi-media promotions 3. “Under-the-radar” ideas

Of course all of these choices are driven by:

We are the people who control the dollars that ultimately drive all the major media forms in the world. If you’ve ever wondered why a TV show you liked was suddenly taken off air, or some magazine you’ve seen suddenly disappear from the newsstand, or why some radio station or internet sites make it and others don’t, you can generally trace it back to the behind-the-scene economic battles for more dollars. And we’re the people waging those battles.

What are the Implications for Marketing Professionals ?

To succeed marketing professionals need to change their focus

“Get the message right” Old focus: “Get the message right”

New focus: “Get the medium right”

The Medium is becoming as or more important than the Message

“Getting the medium right” Often requires rethinking some of the core elements the Marketing Plan Targeting Distribution Promotion

New media choices allow for new ways to target Targeting New media choices allow for new ways to target can segment consumers on the basis of their media preferences and habits ie “Movie Enthusiasts” for Max Factor or on the basis of where they live and what their entertainment habits are Ie Altoids

We no longer have to settle for “one-size-fits-all” Targeting We no longer have to settle for “one-size-fits-all” each media choice can carry it’s own unique message i.e. Hallmark Cards Backcover Campaign and the medium chosen can convey a message by itself i.e. Kellogg’s lifestage targeting

Targeting Marketer’s need to find the right balance between broadly and narrowly focused media and THEN concern themselves with getting the message right in each medium

Distribution Media choice is also influencing how marketers distribute their products opening the door to distribute products in new and more efficient/effective ways

Distribution Media “Versioning” is allowing companies to vary product mixes from market to market across the country without losing the economies of scale of national advertisers i.e. McDonald’s

Distribution Web-based marketing is causing many companies to “disrupt the food chain” traditional distribution schemes are being replaced by more efficient and effective schemes all spurred by the Internet medium

Media has become an integral part of the promotion plan as media buys often become the basis for promotion activity

Promotion Increasingly promotions and events are built around deals with multi-media conglomerates i.e. a deal with TIME-WARNER could involve a Warner Bros. Movie, an Atlantic Records CD, a special on TBS,an insert in People, an HBO Video release, and use of Road Runner on-line

And increasingly the media become the source of promotional ideas Promotions And increasingly the media become the source of promotional ideas Miller Blind Date SNL’s 25 Most Intriguing Moments Max Factor’s “Titanic Video” Promotion

Media is becoming a key component of Marketing Strategy

Media is becoming a key component of Marketing Strategy Affecting; TARGETING DISTRIBUTION PROMOTION

“Getting the message right” Marketer’s need to develop a better understanding of the Media Industry and of the economic pressures that drive it

“Getting the medium right” Expertise is developed primarily in the media departments of ad agencies and in big independent media operations Like “STARCOM”

Starcom is One of North America’s Leading Media Services Companies!

You are all invited this evening to hear more about Starcom and careers in the Media Industry!!!

Thank You