The Hidden Dynamics of the Media System
I’m flattered by Concurring Opinions’ request that I contribute to the blog this month. My expertise is not in the Law. It relates to the strategies and dynamics of media industries—particularly the processes at the intersection of marketing, digital media, and society. My aim in these contributions is to show how new, often hidden dynamics in the media system raise crucial issues for people concerned with the growth of an optimal media system for society.
What would such a system look like? I suggest that a good society should have a balance between what might be called society-making and segment-making media. Segment-making media are those that encourage small slices of society to talk to themselves, while society-making media are those that have the potential to get all those segments to talk to each other. So, for example, Latino Perspectives, a magazine for Latinos living in Phoenix and Tucson, may be considered segment-making; the same with the Univision television network. By contrast, People magazine and CBS television, with their interest in broad national audiences, can be called society-making.
A hallmark of the twentieth century was the growth of both types in the United States. A huge number of ad-supported vehicles—mostly newspapers and magazines—served as a way to reinforce, even create identities for an impressive array of segments that advertisers cared about, from groups of immigrants just establishing a presence in the country to the Jay Gatsby-esque luxury market, and more. At the same time, some ad-sponsored newspapers, radio networks and—especially—television networks were able to reach across these groups. For those who hope for a caring society, each level of media had, and continues to have, its problems. Segment-making media have sometimes offered their audiences narrow, prejudiced views of other social segments. Similarly, society-making media have marginalized certain groups, perpetuated stereotypes of many others, and generally presented an ideal vision of the world that reflects the corporate establishment sponsoring them at the expense of the competing visions that define actual publics. Nevertheless, the existence of both forms of media offers the potential for a healthy balance. In the ideal scenario segment-making media strengthen the identities of interest groups while society-making media allow those groups to move out of their parochial scenes to talk with, argue against, and entertain one another. The result is a rich and diverse sense of overarching connectedness: this is what a vibrant society is all about.
What are the core drivers that push the media toward or away from this development? I argue that in the U.S. and many other societies, the answer can be found in relationships between media and advertisers. To understand the key contemporary dynamics, I’ve focused a good deal of my recent research on the critical transformation taking place in the advertising system’s media-buying-and-planning business. The idea behind media buying and planning is basic: An agency helps its clients (the advertisers) decide where to place paid messages about their products. Thirty years ago the U.S. media plan for most national advertisers was a rather straightforward one negotiated by a few people and carried out by rather inexperienced clerks. The realistic possibilities involved the big three broadcast television networks, local radio stations, magazines, newspapers, and outdoor.
But with the rise of cable, satellite, game consoles, DVDs, and a panoply of internet-connected digital devices, media buying and planning has become a byzantine activity. The complexity of deciding how to think about and reach desired audiences has led agencies to a shift in personnel. Statisticians and computer engineers increasingly sit at the center of the process. They formulate complex computer programs, crunch numbers, and even create new advertising buying-and-selling technologies with the aim of identifying and reaching the best prospects in the best places.
The money used to purchase advertising is huge. Media buyers funnel hundreds of billions of dollars (allegedly close to $500 billion) to media firms in exchange for space and time worldwide.1 A substantial portion (one industry consultancy says 88%2) of the spending runs through a small number of organizations owned by a handful of agency conglomerates most people have never heard of: WPP, Omnicom, Publicis, Interpublic, Aegis, and Havas. And that money covers only the formal advertising. Activities such as product placement and “earned media” (an increasingly wide range of public-relations work that may well include coordinating Twitter feeds and Facebook fan pages) raises the total substantially.
Given the amount of cash involved and the fact that advertising provides such a high level of support for so many media industries, the decisions buyers and planners make influence whether media outlets live and how they live—for example, what audiences they should target and how much they can afford to invest in content. The past decade or so has seen the advertising business take a fundamental turn. The emerging media-planning-and-buying system is predicated on neither society-making nor segment-making advertising media channels. Rather, marketing executives along with their engineers and statisticians are building it increasingly around a belief in the primacy of the chosen consumer. The belief motivates them to sort audiences into targets and waste, focus on the individuals they deem valuable, track those people across as many platforms as possible, and serve them personalized ads and other content anywhere they show up.
They are creating a new marketing-and-media world, and the ramifications may well be profound for the individual, for media practitioners and their products, and for society at large. My hope with this month’s posts is that I can elucidate a few of these issues, tie them to current developments, and encourage policy discussions around them. I look forward to your comments.
1 See “Worldwide Ad Market Approaches $500 Billion,” eMarketer, June 13, 2011.
2 RECMA, “Global Overall Activity Billings 2010,” http://www.recma.com/files/RECMA_11103_1310117878200_FREE_EXTRACT_-_7_PAGES_-_July_08_A_.pdf , accessed February 1, 2012.