For 35 years, Jack Myers has presented an annual media
industry financial assessment report called The Myers Report
Industry Update that is culled
from data and conversations with national and local media, agency and marketing
executives from across the spectrum. In previous years, the report was shared
only with MediaVillage member companies. But this year, the study was released
to the public via a fascinating webinar this week that reached over 1,000
global participants.
Like many
small companies, Myers’ MediaVillage has been greatly impacted by COVID-19. His
young team, he explained, “really stepped up. And that is a core message for
all of us during this time. To step up, to lead and to show what we can do as
individuals, as teams, as organizations and as an industry.” For Myers, looking
at where the industry is going requires us to, “look at the realities as we
move forward into the next stage of growth, renewal and recovery for the media,
advertising, marketing and entertainment community.”
Advertising and Media Community COVID-19
Renewal Fund
To that end,
Myers has launched a series of Leadership Conversations that will serve, he
explained, “as a navigational intelligence tool and resources to lead through
this turbulent time that will lead to renewal and growth.” Another aspect of
these conversations is to better understand the challenges of COVID-19 on a
range of non-profit organizations in the media business. “They are struggling
now,” he explained, “so I’ve made a commitment and MediaVillage has made a
commitment to support thirty of those organizations in partnership with the
Advancing Diversity Council of forty industry leaders.”
His Advertising
and Media Community COVID-19 Renewal Fund is seeking donations which will be
used to support those thirty organizations that are, he noted, “leading the
charge for not only supporting diversity in our community, supporting
non-profits that are helping families, helping small companies, helping local restaurants
and restaurant workers.” Donations can be texted to GIVE 8604064919 or at https://www.mediavillage.com
Benchmarking Economic Projections
Forecasting
future revenue potential for any industry while a global pandemic cripples the
economy is not an easy feat. The last major pandemic was a century ago at a
time of different medical capabilities, media platforms and public
sensibilities. So a direct one-to-one comparison may not be ideal. However, what
happened in the years following 1919 could be used as a rough benchmark. Myers
pointed out that the negative economic impact of the 1919 pandemic was felt for
three years, rebounding during the Roaring 20’s (a time of Prohibition, the
Great Depression and the rise of autocracy.) Taking into account the realities
and facts of today, he projected a modest decline in the advertising sector by
2021 with certain areas of the business faring better or worse than the
industry as a whole.
Myers Economic Projections for 2020 and
Beyond
Advertising spend sectors cratered in April and May with the
advancement of the pandemic. Myers, in his Industry Update report released this
week, still projects declines (although much lower) in 2021 due to a slow start
to sports and less political advertising in a non-election year. Myers’ first
post-COVID economic update on April 15, 2020 saw Total 2020 Marketing Investments
decline -16.6%, and by May, -22.6%. Total 2020 Advertising, which saw a +6.2%
gain in January, fell hard in April (-20.0%) and May (-22.6%). By 2021, Total Marketing
Investments and Total Ad Spend should pace at -4.7% and -3.8% respectively in
anticipation of a second pandemic wave in September or October.
Notably, the
beneficiary of a new post-COVID normal looks to be Legacy/Linear advertising
which was pacing as flat in January 2020 (-0.3%), fell hard in April (-29.0%)
and May (-32.0%) but is projected to gain +11.4% in 2021. Digital, which was
pacing at +13.1% in January, declined -9.3% and -12.1% so far during the
pandemic and is estimated to post a +3.1% by 2021. Notably, the two worst
performing categories, Out-Of-Home (-52.6% in May) and Digital Place Based
Media/Cinema (-65.0% in May), depend on consumers venturing out into larger
venues and will understandably take longer to recover.
Moving From Share to Growth
Myers warned
that, as an industry, we are headed in a self-defeating downward spiral. He noted that, for, “Total Marketing
Investments above and below the line, advertising plus shopper marketing plus
promotion that includes event, PR all below the line, we’ve lost as an industry
$100billion in the last ten years. We are below where we were in 2000, at the
1990 level.”
He attributes
this to increased competition in the space where more media companies are all
competing for the same media pie. Certainly there has been growth in certain
sectors such as shopper marketing money moving into Facebook, Google and other
commerce based solutions. But, he stated, “this is a false growth. The reality
is that there are 60,000+ media sellers, companies, organizations, brands who
are competing for advertising dollars… all focusing on taking share.” He added
that, “as an industry we are in a share game. We need to move from a share game
to a growth game for the whole industry. Compete while raising the tide.” And
it is all the more important to do so as we move through COVID-19. He concluded
that, “It’s really important to think, act and look to our stakeholders as one
community, standing together focused on serving their needs.”
Annual Sales
Organization Industry Leadership Honors
Myers shared
the results of the latest Annual Leadership Honors for those companies who have
demonstrated excellence in sales service, innovation, research and effectiveness.
He noted that the study recognizes, “forty companies in the advertising
industry across nine performance metrics in ten industry categories… surveying
700 advertiser and agency executives on their perceptions of eighty media
companies,” in television, digital, audio and out-of-home in nine categories. And
he offered a spoiler alert: The top performing media sales organizations for
2020 based on field research from February 1-March 15, 2020, which he posited
was, “the perfect pre-COVID snapshot,” went to Hulu and Pandora.
This year’s
study offered some tantalizing insights into the future of media. Past years
have seen the dominance of legacy media outlets. This year, the top performers
were for the most part digital properties that are comparatively new to the
media space. Also, in some areas, the
parameters of success this year were generally lower than in past studies.
Best In Class and On-The-Rise Honors
This year’s
study offered an overall best in class honor as well as an on-the-rise honor
for those companies that performed well among industry executives with less
than 7 years in the business. The chart below is a quick recap but certain
aspects of the study are worth mentioning here.
One of the
interesting aspects of this year’s study, aside from the relative dearth of
legacy media companies making top grades, are the declining median scores. On a
scale of 1 to 100, the general median score has been 65, “and we rarely saw
media scores below 50,” Myers stated. But this year saw no category at the
historical 65-as-passing median and some categories such as Innovation,
Proactive Impact, Advanced Technology and Trade Communication, woefully low.
More needs to be done industry-wide to bolster the efforts in these areas for
advertisers and brands.
Median
score Best in Industry On-the-Rise
Trust and
Reliability 61.3 Spectrum Reach/Pandora Vudu/Sinclair
Client
Support and Services 59.1 Hulu/Xandr NYI/Vudu/Tiktok
Communicating
Value 58.6 Hulu/Pandora SiriusXM/Vudu/Roundel
Client Satisfaction 57.1 Pandora/Hulu Vudu/Cumulus
Data and
Measurement 53.5 Google/Pandora Samsung Ads/Twitter
Innovation 47.5 Xandr/Hulu Roku/Viacom/Tiktok
Proactive
Impact 47.8 Pandora/Xandr Intersection/Vevo
Advanced
Technology 45.6 Verizon Media/Samba TV Dish Media
Trade
Communications 35.4 Google/Hulu Twitch/Crackle
Plus
Finally, the
Best in Media category across the nine performance metrics were:
Advanced TV Hulu/Xandr/Effectv
Audio Pandora
Broadcast TV NBCU
Cable TV Viacom Ad Sales
Commerce YouTube/Amazon
Major
Digital Google/Verizon
Media
Local Media Spectrum Reach
Out-Of-Home Intersection/Outfront
Conclusion
The major
takeaway from this report as well as the full economic picture in the webinar encompasses
several themes. “What can you do as an individual company, as a business
category and as the whole media and advertising industry learn that we begin
acting on during this period, as we move towards recovery and renewal,” Myers
stated and added optimistically, “Then, as we move in 2021, 2022 and beyond
into true growth periods, hoping that we hit a boom cycle as the Roaring 20s
reflected, beginning in 2023.”
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