Cannes: Chairman and chief executive officer of News Corp., Rupert Murdoch, the world’s most powerful media magnate, has some advice for companies: don’t put the brakes on your marketing and advertising spends even if the economy is grim.
“I am a realist. A lot of people will be hit hard by recession,” Murdoch told a packed Debussy seminar room at Cannes Palais, the venue of the Cannes International Advertising Festival.
Search is on: News Corp.’s Murdoch said there is incredible innovation on the Internet and everyone’s looking for the next best creative ideas. (Photograph by Eric Gaillard / Reuters)
But, he also said: “In these troubled times, don’t stop pushing your brand.”
The media mogul and the company’s chief operating officer Peter Chernin were quizzed by Hamish McLennan, chief of global advertising firm Young and Rubicam Inc., at the Cannes festival.
Chernin seconded Murdoch. “Great brands are created during difficult times,” he said. “I think that we should look at this as a time of tremendous opportunity. Brands ought to increase spends in tough times. In times of trouble, you can also increase market share and bring down a competitor.”
The wide-ranging conversation started with Barack Obama’s race for the US presidency. Murdoch said Obama is quite a “rock star” who is able to drive large crowds at short notice. If Obama wins, he added, the US could see big changes, especially in education.
On the global scenario, Murdoch said the world faces increased danger from Islamic terrorism, and there’s an increased risk of people buying more and more sophisticated weaponry.
The discussion then moved on to recession, digital growth, new business opportunities in Russia, China and India, and the opportunities presented to advertisers by high-definition television (HDTV).
Countries such as Brazil, China, India and Russia are where the opportunities lie. “We are seeing the rise of Brazil, India and China and Russia is getting assertive,” Murdoch said. “We look at these developing worlds as opportunities. India’s a working democracy and we have had good experience there. Not without complications though. But it’s a stable democracy and we can work well with them,” he said
Digital media has already become a money spinner for the group. Murdoch said half the revenue of Dow Jones and Co. Inc., publisher of The Wall Street Journal, comes from digital platforms. News Corp. is the owner of Dow Jones.
Mint, published by HT Media Ltd, has an exclusive content partnership in India with The Wall Street Journal.
“It’s not just The Wall Street Journal,” Murdoch said. “It’s the Dow Jones Co., whose revenues are nearly 50% digital. I can see in a very few years (revenues going up to) 75% digital,” he said.
“With Internet turning from static to active channels, there are wild opportunities for MySpace. The last six months have been very good for MySpace,” Chernin added. It currently accounts for 10-12% of all Internet traffic in the US, they said.
Murdoch pointed out that there is incredible innovation happening on the Internet and everyone’s looking for the next best creative ideas. “But at the end, we are all searching,” he said.
News Corp. regards reality TV as another potential gold mine. Chernin said that as a format, it’s “wildly entertaining” and generates human interest. “Reality TV is not going anywhere and it will continue to evolve. This is one format we may see more of since it’s live and engaging,” he said.
“We invest in sports programming for the same reason. And that’s why we are investing so much in news as well,” Chernin added. Other formats are not likely to die away because of the invasion of reality TV. But mediocre dramas certainly will, he forecasted.
HDTV will offer heightened opportunities for the advertiser, they said.
Chernin said the greatest of creative advertisers are those who adapt to new forms. But the danger in that is for those who assume that one size fits all.
Both Chernin and Murdoch said that Microsoft’s attempts to displace Google from top place in search-engine marketing is evidently not helping. Murdoch said it could take a technological breakthrough to displace Google.
When asked about the blurring of lines between advertising and editorial, Murdoch was very firm: “If you have a brand that’s strong, people will buy you. In our newspaper, the lines are very clear.’’ He also said he wanted to make The Wall Street Journal “the best in the world”.