Tuesday, January 31, 2012

P&G layoff - harbinger of the decline of traditional media?

P&G (the world’s largest marketer) plans to reduce marketing budgets after it was becoming increasingly clear that rising ad costs were adversely effecting margins and that they can deliver more effective and efficient marketing programs through lower cost mediums such as digital.  

To quote P&G CEO Robert McDonald:

There are just so many different media available today and we're quickly moving more and more of our businesses into digital…[i]n the digital space, with things like Facebook and Google and others, we find that the return on investment of the advertising, when properly designed, when the big idea is there, can be much more efficient.

Could this be the event that finally breaks the 50+ year hegemony of the TV and traditional media advertising model?  We’ll see.  As I have posted previously the budgets of most marketers are significantly out of alignment with the media consumption habits of consumers.  

That said, paradigm shifts can take time but once they occur the rules of the game can change pretty swiftly.  A move by a market leader like P&G might be the finally push needed to reach the tipping point.

Sunday, January 29, 2012

The march of digitally driven creative destruction continues

No new news here but a good article on NYT.com on how Barnes and Noble and the publishing industry are still struggling to adapt to the incredible disruption brought about by Amazon.com and the e-reader revolution.

Personally, I am rooting for B&N - I like retail bookstores and I enjoy reading print books. Hopefully the book industry can crack the code but based on what we have seen with other industries it may just be a matter of time before retail bookstores are a thing of the past. While the notion of creative destruction comes with the promise of economic innovation (at least according to Schumpeter), sometimes the upside of that innovation is in the eye of the beholder.