Legacy Media's Slice of the Social Commerce Economy - Jack Myers - Jack Myers - JackMyersThinkTank

Published: March 21, 2011 at 03:57 PM GMT
Last Updated: March 21, 2011 at 03:57 PM GMT

Of the $46.6 billion invested last year in digital marketing and advertising, 20% was targeted to legacy media companies (TV, magazines, newspapers, yellow pages, outdoor, radio, etc.). By 2020, legacy media will capture only 13% of the $300 billion in estimated digital marketing and advertising investments. Full details are reported in this week’s Jack Myers Media Business Report and are available to subscribers here.

For the next decade, an estimated 50% of digital marketing growth will accrue to social media plus digital coupons and online/mobile promotional investments, aka Social Commerce. Facebook, Twitter, Groupon, Living Social and other social marketing and commerce leaders are positioned to capture a sizable chunk of these investments. Legacy media companies such as Viacom, Disney, CBS, Hearst, Gannett, Comcast NBCU and Clear Channel could step up their social engagement efforts and benefit greatly from marketers’ growing commitments to social commerce. The odds are they will not make the necessary investments.

An economist studies the production, distribution and consumption of goods and services. For more than three decades, I’ve studied the media industry from the perspectives of content producers, distributors, agencies, advertisers and audiences. As a media economist, I’m fascinated by the impact of emerging technologies and how they influence economic variables across the media, marketing, information and entertainment ecosystem. How marketers invest in social commerce over the next decade will play a primary role in determining the ultimate outcome of the current media transformation. Publicly traded legacy media companies have consistently ceded the high ground of the media battlefield to venture funded companies such as Facebook, Twitter, My Yearbook, Groupon and Living Social without investing in the modern social media weapons systems required to compete.

As reported last week in Jack Myers Media Business Report, network TV ad revenues will grow slowly but steadily for the next decade, powered primarily by digital media budgets. This may be good enough for Wall Street, but it is a corporate failure of major dimensions. Instead of declines or slow growth, many established media companies with powerful content brands could capture double digit growth if they focused on social marketing and commerce opportunities. Newspapers and yellow pages stood by passively as Google and Craig’s List destroyed their classified and retail ad businesses. Again, newspapers, News America and Valassis are failing to react as Groupon and Living Social dominate the group deal business. The decline of legacy media’s share of total digital ad budgets could be reversed with aggressive investments in social commerce, but there are no indications on the horizon that will happen.

The detailed annual 2010-2020 forecasts for 55 media and marketing categories are available to subscribers at www.jackmyers.com. Subscribers have passcode access. If you require your User ID and/or password, contact maryann@jackmyers.com.

To communicate with or to be contacted by the executives and/or companies mentioned in this column, link to JackMyers Connection Hotline.

So, then, what separates email commerce, telephone commerce (telemarketing), direct TV (infomercials) and e-commerce from social commerce? Because don't most businesses Wall use that crusty old idea of Integrated Marketing Communications? Have we all agreed to the boundaries here? Because I'm worried that this might just be another unfounded declarative statement.

Moreover, when you apply real life business context how does "social commerce" apply again? Surprise, it doesn't!

Hey, wait a minute. Maybe social media is just another tool set.

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