The Recession Paradox

Yes you can still grow - Just stop worrying about money.

Today was an astounding day! I've been in this business for a long time (relative to my age) and I've had the opportunity to be exposed to many of the “old guard” businessmen in Canada. They were the original media empire builders of this country and took their companies from the media monopoly heydays of the 50s all the way through the early years of the following century. They've weathered many storms over the years but this one is wreaking havoc like no other.

Why was today so remarkable? Well firstly, Canwest Global announces that they may be forced into bankruptcy as the credit markets tighten and they're unable to borrow enough money to stay in business and service their almost $4 billion dollars in debt. Then Torstar announces a $211 million dollar net loss and that they're laying of 500 people! CTV Also announced job losses, layoffs and station closures.

And lastly, today marks the last day for the Rocky Mountain News, a newspaper that is a favorite among the locals and has been around for 150 years.

Now, it's fair to say that there is a slump in the industry, but is it really of this magnitude? Have billions  and billions of dollars of advertiser money suddenly vaporized from the face of the earth? No. Some has surely, but a lot of that money is moving online and is moving away from traditional media to places where advertisers can get a measurable and consistent ROI.

Incendia Media.... Our little company is a funny beast, since we've been so focused on growing traffic, properties and joint ventures and helping our partners do the same. We never really focused solidly on ad revenues, since I truly believe that online advertising will also have it's own challenges soon enough. There's just too many web properties competing for the same ad dollars and the barriers to entry into that part of the business are decreasing rapidly. Anyone can start a blog, take pictures and write about what they love. And advertisers are glad to spend their money wherever they get clicks or ad views. If it happens to be on a blog run out of someone's garage vs a gigantic online media empire, advertisers are relatively ambivalent to either scenario as long as they get a solid ROI. Google Adsense certainly doesn't discriminate between the two.

Which is why we've been focused so strongly on building dedicated , niche specific, highly branded properties that have an embedded marketplace model where retailers can just go and sell directly to consumers and just bypass the whole advertising chain. Is it working? Yes, it is on a small scale, and we're getting ready to launch our largest marketplace venture to date and it will capitalize on the entire Incendia Media site network of sites and partner sites. We'll be giving ourselves and our partners a solid strategy to increase their baseline revenues. And we've done all of this essentially unfunded.

But how has the recession affected us? Guess what, hardly at all. Since we're so lean to begin with, we were already hungry, so being a bit more hungry is barely noticed. In fact, our traffic base is growing, and we're helping our partners grow. We've also been rapidly deploying new cost savings technologies and increasing our platform capabilities. As a result we've seen load times for our sites go down across the board. Celebrity-Gossip.net and Gossipgirls.com have been able to increase traffic and page views and as a result, revenue. Additionally, all Incendia Media properties are either stable or growing.

Yes the recession is tough, but it's time to evolve old, tired business models that worked great fifty years go, but need to adapt to the times. And the fact is, no one has exact right answer of what that new model will be. The online era has shown us there are almost an infinite number of possible solutions. Will only one win? Probably not. But the bottom line is that there are a lot of private companies out there exploring this space, and a lot of them are growing their traffic base, probably at the expense of these entrenched media empires. They might not have hit solid revenues yet, but they will.