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Worlds of Difference Between Silicon Valley and Madison Avenue

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Excerpted from Jack Myers Media Business Report new Top Ten Trends For Advertisers, Media Companies and Marketers 2010-2012, being distributed this week to report subscribers.

The underlying perceptions of both marketers' and equity investors regarding the future of media value are very different from the value perceptions of most Silicon Valley companies and venture capitalists. A handful of digitally-founded companies, led by Google and Apple, are truly adding unique economic and marketing value to the media ecosystem. While VCs continue to pour endless amounts of money into myriad undifferentiated start-ups and also-rans, advertisers and Wall Street are cooling on the latest "new thing" while they focus on propping up their core media investments.

Apple, Microsoft, Intel, H-P, Sony, Amazon and Google are introducing innovative new options for marketers, but their most successful advances are reinforcing the fundamental strengths and value of traditional content and distribution businesses. The advances in 3D and video-on-demand, for example, are reinforcing and supporting the traditional big screen, big budget content and distribution business. The industry's beachfront properties, and the foundations that support these properties, are being reinforced after years of neglect. Traditional media assets are proving to be more risk free investments for both Madison Avenue and Wall Street.

In this context, cost-efficient mass media will continue to thrive as the bulwark of marketers' media plans. There will be fewer and fewer media options that deliver advertiser-friendly content, cost efficiency and scale for marketers who require wide, synchronous and frequent exposure for their ad messages, which represents the majority of marketers. Those media companies that can deliver effective reach and frequency to target audiences on a relatively cost efficient basis and still be profitable, such as the broadcast and large cable networks, radio, selected newspapers and magazines, out-of-home, selected digital-only content providers and networks, will continue to grow. Technology-based players that build advanced tools, resources and services that provide more solid underpinnings for the traditional media businesses will achieve the greatest growth in the next decade. At the same time, content with strong and clearly identifiable brand equity will gain relevance for long-term multipurpose partnerships between content developers and marketers.

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