Media companies are not advancing quickly enough to meet the needs and expectations of today's digital consumer, which also puts advertisers at a disadvantage, according to a study released Monday by IBM, Market Wire reported.

With the growth of online and digital formats and the concurrent decline of traditional forms of advertising revenue, the study, "Beyond Advertising: Choosing a Strategic Path to the Digital Consumer," warns that media companies that do not evolve their business model to provide a simultaneous marketing service will fall further behind the needs of the digital consumer and advertiser.
The survey was conducted across six countries, with a base of 2,800 consumers and included intensive, personal interviews with international advertising professionals. According to the study, there is a broadening gap between consumers and advertisers on one side and media groups on the other, the news release, posted by Fox Business, stated.

"To succeed - especially in the current economic environment - media companies will need to develop a new set of capabilities to support the industry's evolving demands which include micro targeting, real-time ROI measurement and cross-platform integration," wrote Saul Berman, IBM global leader for Strategy and Change Consulting Services, and co-author of the new study. "Now is the time for companies to move quickly to become more effective with their assets and build for the future."

The study suggested four important trends:

1. Consumer adoption of new distribution formats
2. A shift in advertising spend
3. A digital migration of platforms
4. The emergence of new capabilities due to moves by new entrants and existing players

The contemporary consumer is becoming increasingly digitally orientated, according to the study, which states that between 2007 and 2008 use of social networking sites increased from from 33 percent to 60 percent; use of online/portable music services increased from 22 percent to 44 percent, and mobile Internet use almost tripled to 41 percent from 15 percent.

"Media, entertainment and advertising agencies must realize consumers are open to sharing information under the right conditions," stated Bill Battino, managing partner, Global Communications Sector, IBM Global Business Services, and co-author of the study. "Our research shows consumers are willing to trade knowledge about their usage and preferences for content and associated targeted marketing offers. Companies that excel in permission-based advertising will take share of marketing dollars."

Advertisers have followed their audience with a similar online, interactive shift. IBM predicted that the Internet will gain 20 percent of the overall advertising spend this year, even amid the economic downturn. This is mirrored by a decline in traditional advertising outlet spending. The study also stated that 65 percent of global chief marketing officers plan to decrease traditional advertising.

The growing popularity of online platforms finds advertising and marketing merging functions with the use of social media, online video, mobile, gaming, branded entertainment and advanced TV. This allows advertisers to combine the traditionally distinct realms of transaction and brand based advertising.

Conversely, the study found that media distributors are not able to accommodate the digital needs of both consumer and advertiser. Eighty percent of the advertisers interviewed said they felt that the industry was at least five years from providing successful cross-platform advertising.