Media companies need to design a genuinely joined-up digital strategy to avoid cannibalising their 'old media' revenues.
The media market is in transition. Traditional revenues are in decline, whilst new digital platforms, for all their promise, are yet to fill the gap. Few, if any, organisations have developed an integrated cross-media strategy that is delivering real value. Instead, they’re building services in direct competition with print, TV and so on.It is hard to justify a major overhaul of internal processes and investment in new media when the revenue stream isn’t clear. But real opportunities to cross-sell and support new ad streams do exist. Media companies need to become attuned to selling new media advertising, from mobile to 3G and IPTV, in a way that complements, not undermines, traditional products and reflects the expectations of the consumer.
Obviously, this requires financial investment and a corporate re-think to drive through. But in the current financial climate, and following the dent in revenues that resulted from the problems with premium rate IVR and SMS services last year, few companies are willing to commit.
Yet those tumbling SMS service revenues should be a wake up call. Organisations have got to get to grips with new consumer behaviour, likes and dislikes, if any new media strategy is to successfully replace declining revenues elsewhere.
So how can organisations embrace digital without exposure to significant business risk and untenable investment?
The first objective must be to maximise revenues from existing value-added services, such as competition and content, by cross-selling from one medium to another. By encouraging a customer using an SMS application to also use a web application or access free IPTV content, the company can begin to increase ARPU, and drive incremental revenue gains.
There’s also a need to generate traffic to support new advertising platforms. Key to this is the creation of relevant free offers that are targeted at specific groups of consumers and leverage existing material, content and customer loyalty. It’s a low key approach, without massive risk and with opportunitis to add incremental revenue.
Needless to say, none of this can be achieved without a partner that understands the mix, from IPTV to 3G video and advertising into a WAP portal. All of these elements are becoming more complex thanks to increasing government regulation and a multiplicity of new payment options including PayForIt, PayPal , credit cards and more. The networks have created a tough accreditation process for PayForIt in a bid to retain high standards and effectively block new entrants to the market. However, success will depend upon an ability to support the diverse payment methods that will be adopted by consumers.
Underpinning the entire campaign must be detailed customer understanding. This will require tight integration between the billing platform and the CRM system. Basically, you need to track customer behaviour across every medium and then support cross selling activity. Understanding traffic flows between IPTV, mobile and 3G is the key to creating effective digital media strategies.
The opportunity to leverage the power of digital media and gain additional revenue, without incurring high risk, is an attractive proposition for any media organisation. The challenge is to overcome the organisational barriers to create a single, unified offering that maximises ARPU across every media. Those that succeed will mitiate audience fragmentation and developing genuine insight into emerging consumer behaviour.
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