When Mass Marketing Channels Meltdown – Where will YOU Get NEW Customers?

Written by on September 15th, 2008

Social Media and Online Community are your future marketing channels!

I started writing blog posting today, focusing on another issue, but after reading about the incredible events over the weekend of Merrill Lynch being bought for 50b by Bank of America in order to avoid an uncertain future (they’ve lost 8 billion this year), Lehman Brothers filing for Chapter 11 bankruptcy protection – that on top of last weekend’s U.S government takeover of Fannie Mae and Freddie Mac,  – I’m kind of in a despondent, doomsday mood!   We are potentially facing a financial MELTDOWN if not today, very soon!

(industry experts are suggesting that the past two weekend board room decisions represent the most extraordinary period in Wall Street since the 1929 crash).

So let me take this moment to start freaking you out MORE by suggesting that traditional mass marketing channels are also in a meltdown phase! The newspaper, radio, TV, magazine and other mass marketing channels are witnessing a steady decline that is rapidly reaching a tipping point that will result in mass exodus of customers – which will give you access to less customers, which will result in higher customer acquisition costs and lower profits.  Interested?  Read on!

Changing behaviors

Why O’ why are we suggesting that mass marketing channels are heading for a meltdown?    It all starts with changing consumer behaviors, broadband reaching 70 percent o American homes, some 350 million plus people participating in online community and more adopting one or more social media tools (blogs, photo sharing sites, etc)   

Time Magazine reported a Yahoo/ComScore study that showed consumers were spending 3 ½ hours online vs. 2 ½ hours watching TV each day.   Consumers are reading, entertaining themselves, doing business online, educating themselves and buying and selling things – all online.  What a change in only the last decade and it’s all leading to a tipping point.

To remind you on just HOW BAD things are getting, let me take you through just a few facts and thoughts.  (If you want more details, download my book Internet Dough)

Newspapers

The New York Times was founded in 1848 and took nearly 160 years to grow to 1,000,000 subscribers. However, the changing behaviors of their readers is forcing the organization to cut 100 newsroom jobs to correct a deficit caused by a 3.2 decrease in weekly subscriptions and a shocking 9.2 percent decline in their world famous Sunday paper!

Man, times are tough for the newspaper business.  The McClatchy newspaper chain is in a virtual tailspin as they try to figure out how to pay their bills in this new net-centered economy after they assumed $2 billion dollars in debt to buy the the Knight Ridder Newspaper chain.    (McClatchy stock has dropped 90 percent)

Magazines

While subscription rates to magazines are currently flat, (much a result of giveaway subscription prices) sales of newsstand magazines tanked  from 47.1 million to 44.1 million (nearly 10 percent) over the last year.   Normally top selling titles like Cosmopolitan, O and The Oprah Magazine saw sharp declines.   Magazine publishers and vendors are worried because newsstand sales are their most profitable area!http://images.forbes.com/media/assets/spacer_white.gif

Radio

Huricane Ike’s strong winds, were powerful enough to knock trees into power lines even in Akron, Ohio last night.  So as we sat in the dark looking for a battery operated radio to see what was happening in our community and the state, I asked my 14 year old daughter how often she listened to the radio.  She answered: “Only when I’m in the car.”  (that’s on short trips to school and the mall. When we take longer trips, buds are in her ears as she listens to her iPod.)

The point I’m getting at is Radio is facing some steep declines in the years ahead. Twenty-seven percent of Americans are now listening to the radio less than they did five years ago, according to a survey commissioned by American Media Services. A recent report reflects that radio suffered its worst decline in March since November 2001, with revenues slipping 8 percent.  It’s not just a weak economy that is affecting radio, it’s the changing behaviors of consumers!

Television

TVWeek reports that this year’s May television ratings sweeps were terrible:

Low ratings during the February sweeps may have been a fluke due to the writers strike, but the May sweeps period is painting a picture of viewers out of sync with broadcast television: Shows across multiple networks rang up series lows during a time that historically lures in the viewers.

Stats are starting to show a continuing trend.  On average, the networks are off the mark by 10% from last year in total viewers and off 17% in the 18- to 49-year-old demographic.

Is everyone living in denial?

I started this blog talking about the financial industry potential melt down, but as I got into this article drilled into how the mass marketing industry is literally in a meltdown too.  It’s yet to be sorted out who is responsible for the worldwide meltdown and write off – of nearly 500 billion dollars in loan assets, but when it comes to your company, it will be easy to point to who was asleep at the switch!

Over the next 5 years the trend is going to accelerate as the behaviors of consumers migrate to a digital online world.  The old world as you knew it is over.   Your company should be developing comprehensive Internet strategies to engage customers through social media and emerging trends because the old way is not going to be around to deliver the same high quality leads and sales at a price you can afford.

Somebody has to take the responsibility.  It might as well be you!

What do you think?

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