Media & Advertising themes for 2025: #3: Rejuvenation

The upside in realising that your business is in the middle of an existential crisis is the freedom that comes with acceptance and the energy that can be redeployed away from denial and deflection and into reinvention.

2025 provides the opportunity for future equipped media and advertising businesses to rejuvenate their approach to their business and their customers. However, time is of the essence.

I was messaging this week with a smart senior media executive and they summed up perfectly the state of play as it relates to the global media giants who have decimated the media ecosystem.

“[The platforms have] got something very powerful the local media businesses do not have and are fast running out of. Time.”

This exec’s point was the platform’s financial resources,  technology, and attribution gaming advantages provide them with the luxury of slow and steady experimentation. An example of this was Netflix buying 2x NFL games. Or an Amazon slow walking into the NFL. When a technology business either has free access to all of their advertisers data and customers (Google, Meta) that it can use to sell to them and their competitors, the core existing advertising business is a firehose of advertising spend that not only gets bigger every quarter, but seems to be price inelastic.

The luxury of time the platforms have is directly related to the lack of time everyone else has. Their 10-20% year on year growth is coming from everyone else. Not many businesses can survive with that level of attack. So the only way to try and stop the bleed, and get to a position of growth is to make the required improvements now.

And this needs real changes. Not knee jerk ones, but changes that enhance the core and have both short and medium term benefits. From the same exec in the same chat.

“[We can’t have] strategy disguised and presented to the market as going after growth, but really it’s just playing defence and [relying on] hope. [To date] this is unfortunately linked to the decisions we've seen, and the lack of collaboration where it’s been needed.”

This is where rejuvenation comes in. And rejuvenation provides such immense opportunity for both revenue growth as well as providing an environment which allows good people to do great, sustainable work that serves to benefit more than the ASX investor disclosure powerpoint presented every 6 months.

Following on from the theme of the 5 question in the series to date:

3. Are you investing differentially to drive the core businesses to their full potential or are you spreading your bets evenly so as to win nowhere? 

>>> 2025 and onwards provides the opportunity to really focus on being the advertising partner that helps advertisers sell more stuff. ‘More’ is key here - if your competitors are ‘winning’ due to creating the perception of being attached to sales (and having the technological pipes to craft this narrative, as well as the free data that advertisers share on their customers to drive up both their prices as well as reduce their trust agreement with customers) then this has to be tackled head on. It needs to be called out through a united front, and an approach needs to be built that takes all the benefits of high tech attribution but removes all of the elements that are on the nose. The smart businesses will do this, the not so smart will try to mimic what the platforms do and find out pretty quickly this marketplace is crowded with supply and light on demand. 

The rejuvenation decisions must be meaningful and linked to what will allow a media business to compete with and beat Google and Meta at helping businesses sell more things. If scarce resources are spread thinly on a ‘me too’ approach these funds will be wasteful as you cannot beat these businesses on their home floor.

4. Is adjacent expansion reinforcing the core or distracting management from maximising the potential of the core? 

>>> There have been some green shoots of rejuvenation here within TV. Both Foxtel, Nine and Seven I believe are clear on where their distinctive advantage lies - content and scale. All understand there is value in how these are accessed from an advertising perspective, and all at senior levels see the potential in a clearer, bolder and more provocative and confident position in the market. Nine for example has a high quality linear product, strong on demand platform, high quality sponsorship and premium integrations, plus a very capable self service platform all wrapped up in a high functioning sales org. Foxtel has 3 customer propositions and is focusing on being a digital video proposition with the best scale of the pureplays. 

The core of these businesses is defensible as the meaningful real alternatives do not offer the same audience scale, inventory scale, ease of access, integration and measurement. Rejuvenation offers the opportunity for the market to be reset to how it actually functions and where ad funded consumption is occurring, not where those with vested interests want advertisers to believe it’s occurring.  

5. Do you need to redefine the core or should you be focusing on your existing core?

>>> This will lead us to our last theme - collaboration - on Thursday. My view here is it’s not an either/or. The core should always be about providing advertisers with the best opportunities to effectively reach as many people as possible that either buy their products now (and need a reminder to prompt the next purchase) or could buy them in the future (but probably don’t know they need them). The reality is the current battle to gamify attribution has been won - the platforms have too much artillery and data and market coverage of trade organisations to play here. The future needs a better way, better explained, that demonstrates to marketers they don’t have to trade away their customers data and trust, and their companies long term prospects, in order to satisfy the illusion of short term results on the digital platforms.

But it will require collaboration. More on that Thursday.