Marketing Revolution: the ‘Reorientation of Marketing’
It’s official: marketing and advertising rules have changed – forever! A digital transformation is forecast to completely transform and reorient the entire marketing industry, penetrating every subsector of the entertainment and media channels. This was highlighted in both PwC’s latest Australian Entertainment and Media Outlook, and their report with the Australian Marketing Institute reflecting on the changing nature of marketing budgets and its effect on traditional and new media channels.
The Digital Transformation: shift from traditional to new channels and revenue models
The media and entertainment industry has been irreversibly changed by the growth and progression of digital. The marketing industry is now being forced to embrace new media channels in addition to traditional ones if they want to survive in this rapidly progressing digital world. The digital transformation has infiltrated all areas of the marketing industry, and now almost all content is digital, irrespective of its final form (traditional or digital).
This shift from traditional to new marketing models was aptly labelled the “reorientation of marketing” by Megan
Brownlow, editor of PwC’s Australian Entertainment and Media Outlook. Businesses must reorient their budget focus to apply digital across all core principles of their business strategy.
Traditionally businesses have focused on buying and purchasing media channels and space. However the reports highlight that as digital infiltrates all areas of marketing strategy, strategies are having to keep up. In other words, trends reveal that businesses are shifting their expenditure from bought to owned media channels, forcing media marketers to increase their spending on building their own media channels.
This suggests that marketing budgets are shifting their budget focus into CRM, sharable content and video marketing. The increase of digital has forced businesses to transition away from traditional media channels, and is encouraging them to embrace new revenue models through a diverse new range of digital and social media channels.
Brownlow suggests that the changing direction of marketing spend is “diluting the reach of traditional platforms”. She states this trend has been driven by digital and social media channels, which are forecast to grow significantly over the next 5 years. With this growth the advertising market is being spread over more and more channels. Hence, the reach of traditional channels is being weakened as audiences are no longer limited to just traditional channels.
However the growing number of media and advertising platforms is actually making it easier for brands to directly access their audience. Therefore brands that are building and embracing new models will have the opportunity to capitalise on this ease of contact and increasingly transparent relationships. Furthermore, this has caused a transformation in consumers’ minds, giving consumers total control over the entertainment and media they are exposed to. They are now not only able to find content they like, but also be found by content they will like.
This shift is creating an urgent need for businesses to gain a better and faster insight into constantly changing consumer behaviours. Hence, advertisers are using digital platforms and online tools to obtain data and real-time customer insights, enabling businesses to create marketing campaigns and strategies to target and appeal to specific audiences. Businesses can then be more transparent to their customers whilst also getting to know their customers on a more comprehensive level.
Brief snapshot of 2013 performances
- Entertainment and media spending in Australia grew by 4.5% – This figure is below the global rate of 5.2% growth and the APAC growth rate of 7.1%
- Consumer spending grew by 4.4%
- The advertising market grew by 4.8% year on year – experiencing better growth than in the two previous years
Media outlook for the next five years
- Two-thirds of revenue growth from consumers and advertising will be digital by 2018
- By 2018, digital will account for nearly half of all entertainment and media revenue
- Spending on digital magazines will increase from $19 million to $104 million
- Total consumer spending on digital newspapers is forecast to grow from $37 million to $380 million by 2018
- Digital advertising is expected to grow to account for 33% of total entertainment and media advertising revenue by 2018
- Television is forecast to experience growth between now and 2018
- Internet advertising will be the largest advertising sector in 2018, reaching $5.7 billion – this will see the gap between internet and television advertising shrink
- Out of home is forecast to see compound annual growth of 3.2% to $779 million in 2018
- Radio is forecast to see compound annual growth of 3.4% to $1.3 billion in 2018
- The Australian entertainment and media market is forecast to grow to $39.8 billion by 2018, with a compound annual growth rate of 3.4% between 2014 and 2018.
- Consumer spending on entertainment and media is expected to grow by 3.5% to $25.4 billion by 2018.
Overall, consumer spending on the advertising market is being spread over an increased number of channels.
PwC’s outlook predicts that we will see a diversification of revenue streams forced by shifts in the media landscape.
“Diluted” reach of traditional platforms and media channels due to an increase in the number of digital and social media channels.
This increase in digital and social media channels, combined with data analytics, will also make it easier for brands who embrace new models to interact and directly access their audience.
In conclusion, advertising spending is up, brands must shift towards new marketing and advertising models to take advantage of this.