5 key trends from the latest mediafutures report

5 key trends have been released from the latest mediafutures report for a media business in the middle of a clawback.

According to the report, 90% are in profit, with the average profit margin being 14% of turnover.

Other key metrics - such as headcount and marketing spend – are also looking more positive than two years ago, when the industry was still deep in its post-pandemic trough. All this is linked to a growing sense of self-belief, dogged determination and much clearer priorities in a general economic climate that looks to be stagnating rather than plunging into recession.

These are some of the topline findings from “mediafutures 2022 to 2024: “Surviving & Winning in a Permacrisis World”. Wessenden Marketing, the report’s authors, have been benchmarking the media business over the last 14 years, in association with its long-term media partner, InPublishing.

This year sees detailed and confidential operating data shared by 97 media companies across consumer enthusiast & lifestyle, newsbrands, membership, B2B, live events and marketing services. This year, the involvement of Collingwood Advisory, extends the geographical footprint of the survey into Europe and the USA, and adds a deeper penetration into the independent and entrepreneurial media business sector.

Beneath the topline headlines, the authors reveal that there are 5 key trends, and report as follows:

Trend 1: The clawback is real, but patchy in a fragmenting media business

As business models continue to diverge from brand to brand and from vertical to vertical, it is becoming more difficult to define the shape of the sprawling “media industry”, except that these companies are united by common challenges and similar operational metrics – which is what mediafutures captures.

• Most companies are now leaner, smaller and more diversified in terms of their revenue streams than in the 2020-21 trough.
• The range of performance is more varied from company to company, with a mix of positive hotspots and challenging whirlpools.
• The move out of print & physical and into digital; the drive to alter the balance between ad revenues and user revenues – these are two key shifts that have accelerated their pace.

Trend 2: The relationship between B2C and B2B is becoming more complex

On one hand, the distinctions between the two sectors are blurring, as they become more similar in the way they operate. This is largely driven by Consumer companies becoming more involved in transactional marketplaces, ecommerce and spin-off services. On the other hand, Consumer lags behind B2B in almost very metric, but is slowly closing the gap.

Trend 3: Size, ownership and location matter more than ever

• Much of the activity, creativity and growth is coming from entrepreneurial SMEs below the major media companies.
• The nature of the company ownership (PLC versus Private Equity versus Owner-Operator versus family-owned, etc) and where the company is located geographically, both have a practical impact on a range of factors such culture, staff skills, staff costs & retention levels.

Trend 4: The back-end is now just as important as the front-end

Developing diversified front-end revenue models and smart marcomms remain critical. Yet the “back end” (e.g. process automation, dynamic pricing, frictionless payments, data mining and analysis, productivity levels, efficient supply & value chains, efficient workplaces, etc.) have become equally important. This is linked to a subtle shift away from trying to predict and plan for the future, towards building an organisation that can manage unpredictability.

Trend 5: The need to build two key assets has become more urgent – people & tech.

• Recruiting and retaining right-skilled staff has never been more important. Or more challenging.
• Investing in simpler, more flexible and more integrated tech stacks is the key enabler of every strategy and process. Most companies still have a long way to go on their tech journey.

Jim Bilton, managing director of Wessenden Marketing, said: “There is no denying that the media landscape is still both tough and competitive – and will remain so for some time. Yet the media business is back into real growth after the extended trough of 2020-21. The smarter companies are now much clearer about what their realistic and achievable priorities are, with the resources that they have to hand – doing too many things badly has been a real danger for many organisations over the last couple of years. The leading companies are getting on with what needs to be done - more focused, more pragmatic, more driven than ever by the bottom line rather than the lure of topline sales.”

Piers Bearne, founder of Collingwood Advisory, said: “Now is the time for smaller, independent companies, especially in B2B, with clear value propositions to shine, provided those propositions are rooted in robust consumer insights and market analysis. While the value of a company is typically derived from metrics such as profitability and growth, behind these is a range of productivity and efficiency issues that drive any business. Understanding those better will help business owners to focus on value creation rather than revenue growth for its own sake.”