While acknowledging that Q2 results for Viacom (VIA) will probably disappoint, Chief Executive Philippe Dauman attributed the relative softness of the advertising market to a slowdown of an “uncertain (economic) environment“, pointing especially in the direction of the automotive sector. He added that there is no sign of a broader weakness in advertising. In other words, as soon as the economy recovers, everything will be a-ok.

Really?

I understand that the role of a CEO is in part to be the most active cheerleader for his or her company with the press and investors. How about a little less cheering more leadership instead?

Let’s not insult the intelligence of savvy reporters and investors. If the economy turns around, it might give a break to advertisers for some time but won’t change the fact that their current business is as good as gone. This is not a dooming prediction but a fact. The very respectable Q1 results for the media giant Viacom were driven by the success of a video game, this should give us a clue…

The issue is really quite simple: mass marketing is finished, kaput, gone, fertig, terminado, fini. We wrote about the death of mass marketing a few weeks ago so I won’t bore you too much on this.

The high cost high revenue model of media giants and advertising agencies is based on mass marketing and handling a transition won’t be easy. Everyone in the field has in some fashion initiated this transition, including Viacom.

We find the lack of acknowledgment of this structural crisis troubling in Philippe Dauman’s announcement. Investors always expect to hear the harsh truth and senior executives should face up to it. Success is not guaranteed but failure is if they don’t.

Tags: advertising, massmarketing, philippedauman, viacom

This entry was posted on Thursday, May 29th, 2008 at 10:58 am and is filed under We Search, We Score, We Rant. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.