70% of advertising and marketing execs want to internally restructure and ‘consolidate’, says new EY report
70% of advertising and marketing executives, and 55% of the media industry more broadly, want to internally restructure and consolidate their businesses, according to EY’s latest survey into the industry.
Of the 350 leaders surveyed by the consultancy – 30% of whom are from the Asia Pacific region – more than a third admitted that their companies will no longer exist in five years unless they undergo reinvention, leading to the desire to restructure and streamline.
70% of advertising and marketing execs are aiming to internally consolidate, according to the report
“Integrating overlapping businesses, duplicative regional infrastructures or even the merging of stand-alone divisions creates synergy opportunities that can help drive cost savings and value creation,” the report reads.
“Of all media subsectors, advertising and marketing services respondents were most focused (70%) on transforming the operating model through internal consolidation. The agencies are gradually bringing together vast, diverse portfolios of relatively unconnected businesses built through multiyear acquisition programs to retire multiple subbrands, simplify offerings and generate efficiencies.”
The survey, titled ‘How are media and entertainment businesses reinventing in an age of transformation?’, also uncovered that 50% of executives believe they can no longer rely on traditional business models, while 56% of those in the advertising and marketing space are prioritising the evolution of the product or service.
Almost two thirds of those who think their businesses need to change said that “optimising the operating model will be truly transformational”.
“Media and entertainment companies remain upbeat about change. But with such diversity of business models and revenue streams, the starting point is often unclear,” said EY’s global media and entertainment sector leader, John Harrison.
“The survey reveals that there is no single path to reinvention, but businesses can succeed by prioritising three key levers of change: operational excellence, innovation and upskilling talent. Embracing these ambitions can help them address short-term challenges and unlock long-term value creation.”
The demographics of the survey respondents (Click to enlarge)
However, a sense of inertia still prevails, with more than one in four executives noting that, while their businesses need to reinvigorate, they don’t know what to prioritise.
The workforce was a priority for many, with a third identifying the need to close the talent gap and build skills. Among publishing and advertising executives, that figure rose to 43% and 42%, respectively. Nearly a quarter see that talent gap as a threat, and 30% listed it as one of the biggest barriers to innovation.
Upskilling existing team members is the best way to develop talent, according to almost half of respondents.
“The need for digital skill sets is now the norm among media and entertainment companies, but changing technology continues to shift expectations. To remain relevant, workers need to migrate up the value chain, reinventing themselves and continually improving their capabilities,” Harrison said.
When it comes to data, 56% of execs said they prioritise building first-party data, compared to just 13% who prioritise third-party sources. Almost two thirds see the increasing availability of data as a positive opportunity.
“The evolving nature of revenue generation, combined with pressure to release capital to fund growth, is leading companies to reevaluate transformation goals and how they respond to shifting customer demands,” Harrison added.
“Making the most of data that resides across the enterprise is one of the most crucial tactics for realising positive change — particularly in helping businesses to compete by improving the customer experience.”
Brittney Rigby was Mumbrella's deputy managing editor - news and analysis. She left Mumbrella in April 2021.
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media and entertainment
media and marketing
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