March, 2023
Over the next few months we’re likely to see a change in global advertising investment amid an economic crisis, geopolitical complexity, inflation, the disruption of the supply chain and structural technological changes. Media effectiveness is becoming increasingly difficult to achieve, which makes innovative planning more important than ever. What will the media scenario be like this year?
The energy crisis and inflation, together with the drop in advertising revenue, have affected the funding of journalism across the globe, particularly the print media. Some media outlets, such as BuzzFeed, have been forced to reduce their staff due to the decline in social media traffic and the uncertainty of ad spend.
European companies too are seeing a decline in subscriptions to their print products as a result of higher cancellation rates and breakdown in distribution networks. Regional and local newspapers are particularly vulnerable, and it is expected that more newspapers will cut back on editions or discontinue their print versions altogether. Radio and TV programmers are also facing a growing problem due to a significant decline in audiences.
Media companies are pinning their hopes on the growth in digital subscriptions to compensate for the loss of advertising revenue. They now placing more emphasis on their journalistic values and the quality of their journalism to win over and retain subscribers. Diversification of income continues to be a priority, with display advertising in second place after subscriptions.
With regard to news consumption, it is difficult to get a clear picture. In a survey conducted by Reuters Institute with different traditional and digital media, 42% of respondents stated that traffic to their website had increased over the last quarter, while 58% said it was the same or had dropped.
The majority of media leaders are concerned about the growing trend in the selective avoidance of news, especially politics-related news. According to Reuters Institute, avoidance has doubled in many countries over the past three years because consumers feel that the news is negative, repetitive and not trustworthy.
To remedy this problem, media companies are integrating features that allow users to see more uplifting news stories if they wish. For example, in its latest redesign, Pink News has included a button to find out the reader’s mood after reading an article and, based on their response, offers them the type of news they prefer to read.
According to data from GWI, an audience research company, after decades of constant growth we are now seeing a decline in the amount of time people spend online. Despite having reached a record during the lockdown in 2020, internet usage time has fallen by 13%, which suggests that it has probably reached a peak.
This significant change could be linked to saturation of the market, but it could also reflect the anxiety that people feel when using social networks and online media.
Trends in social networks indicate that first-generation networks, such as Instagram, Facebook and Twitter, are losing popularity to applications like TikTok, which is constantly adding new features to support advertising campaigns, using content creators. However, its rapid growth has caught the attention of regulators, who have started to investigate its algorithms and impact on society.
Digital media companies have come up with new ways of reaching consumers – through short videos and podcasts. The media are looking to create exclusive, specialised content that will help them stand out as well as increase the loyalty of their audiences. According to the U.S. Podcast Advertising Revenue Report, advertising revenue from podcasts will double in the United States, rising to 4 billion dollars by 2024.
Meanwhile, the world of gaming continues to grow and consolidate itself as a media. The launch of new games, e-sport competitions, the increase in streamers and the popularity of Twitch as a streaming platform, are some of the aspects of a system that offers excellent opportunities for creating new forms of entertainment and for establishing relationships between brands and users who use gamification to communicate their messages to the younger generations.
Artificial intelligence makes processes more efficient and helps create something new, though it also raises existential concerns. Journalism already uses OpenAI’s ChatGPT tools to generate texts and MidJourney and DALL-E to generate illustrations. The explosion of automated content is inevitable and it will become more difficult to distinguish what is real from what is fake, misleading or manipulated. However, regulation is underway to make the use of artificial intelligence more transparent.
In 2023, the media will face significant challenges, including a decline in news coverage and the lack of interest of emerging platforms in informational content. These problems will make it difficult to attract the attention of the new customers, which will mainly affect media companies that rely on print products or advertising. However, digital media companies are in a more favourable position and will be able to better adapt to the new demands of the market.
There is also a growing interest in lower-cost business models, such as podcasts, which have emerged as an viable alternative for meeting the demand for local and specialised information.
Finally, artificial intelligence is rapidly transforming the real world, and presents new ethical and legal dilemmas for the media industry. In this context, it is important for professionals in the sector to adapt to the new technologies and to carefully consider how they can leverage them to improve the quality and relevance of their content.