Here you can read the first part of the column 'The Curse of Worth: When Just Creating Isn't Enough'.

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Most companies often focus on the first two phases, while the third, crucial for increasing profitability and margins, unfortunately remains neglected.

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Let me illustrate this with examples from two industries. The media market, especially the segment of print media, has been struggling for some time with serious challenges to business sustainability. This is not breaking news, as there is currently a public debate on the future of print media in small and shallow markets like Slovenia. The negative spiral of the last decade is further fueled by skyrocketing paper prices and consequently more expensive printing, which publishers cannot pass on to consumers. Looking solely from the perspective of created value, the fact is that most independent print media undoubtedly create it, as they have their readership, albeit shrinking. This is often at the expense of online media, which, from the perspective of informing the public, overshadow print media and have a completely different business model, primarily based on advertising revenue rather than subscriptions. All this has changed consumers' perception of value, pushing it downward; consequently, they are no longer willing to pay today's average print subscriptions, let alone their increases (which will result from rising input prices).

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Additionally, in terms of value communication, most of the focus is on the quality of service, which traditional, including print media, should provide through editorial independence, professional standards, etc. They are undoubtedly right, and such communication is entirely appropriate, but it questions its effectiveness. If communication alone does not change the perception of the added value of the content offered by traditional (print) media, it will contribute little to the sustainability of the model. The solution is not digitalization per se, but primarily finding ways, approaches, and models to increase the perception of created value through greater personalization of offerings and more in-depth and analytical content, original contributions, etc. (all this analitic data media usually have), and capturing it in a timely (omnichannel) manner. How many times in recent years have you encountered the promotion of specific media content that attracted you, but when you then went to the media provider's website, you encountered a user experience hell, which deterred you from purchasing or subscribing after just ten or twenty seconds? These are all lost opportunities to capture added value.

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The second example comes from the advertising and marketing communications industry. It is almost incredible that most of the market - both practitioners (traditional creative agencies) and clients - recognize the negative spiral that has been going on for a decade or so, but are still willing to ignore reality. The reality where they are heading towards an oncoming train in the tunnel. As a result of cost optimization on the clients' side, margins in the industry are decreasing, which, of course, also has another effect - the impact on the quality of services provided and consequently a feedback loop in the form of the perception of created added value. Which is low and, based on my own experience, still declining. Consequently, clients are strengthening their own marketing and communication departments, and the number of regular employees in these departments is also increasing at a purely operational level. However, this by no means implies that efficiency is increasing or that other strategic goals are being achieved.

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With increased specialization and rapid (r)evolution of marketing and communication channels and formats, added value lies in the ability to effectively adapt communication strategies to changing circumstances and target groups.

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Often, it is quite the opposite: with increased specialization and rapid (r)evolution of marketing and communication channels and formats, added value lies in the ability to effectively adapt communication strategies to changing circumstances and target groups. Many organizations internally struggle to meet such challenges (kudos to exceptions) because they require both specialization and an extremely wide range of knowledge and experience from multidisciplinary teams, which only a few (large) corporations are truly willing to invest in. Hence the need for strong, specialized, and high-quality external support, both in terms of consultancy and execution. But with this existing need, only a few companies/clients are willing to acknowledge the value created; a direct consequence is conducting procurement procedures "per piece", according to tabular (Excel) principles, as if ordering a sheet of paper or a kilogram of plain white flour.

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Read the rest of the text (in Slovene) here.

The column was originally published in the print magazine Marketing magazin, April 2023, #502. You can order the magazine at info@marketingmagazin.si.