Australian media companies and marketers must see the writing on the wall.

Big media companies are scaling up formerly tentative experiments in consumer-created content, social networking and interactive resources. They are developing new advertising formats, sometimes in partnerships such as the one last year between NBC and Yahoo! for Unilever’s Dove soap, which tied-in to the reality TV show The Apprentice. The promotion drove a 1500 per cent increase in traffic to the Dove website. This helps marketers emerge out from under the power of the TV networks. Pepsi relaunched PepsiOne in the US without television last year. Pepsi and BMW are two of the leading marketers thriving without TV.

After a decade of increases in advertising budgets but relative stability in their media mix, many leading US marketers are directing more money and attention to digital media. Traditional media, especially television, is raising prices but not delivering sales. Consumers using pay TV, mobile phones, video games and the internet have shifted media habits, and this shift will increase substantially this year as greater broadband penetration legitimises the internet as an entertainment platform.

Mr Budde predicts that today’s 3.5 million broadband subscribers will grow into a market worth $70 billion within 10 years. And these users don’t like ads. Digital TV users in the US (Foxtel’s iQ is a local equivalent) say they fast-forward through 92 per cent of commercials but 55 per cent say they would pay more to get personalised marketing.

In a Washington Post/ Nielsen Media Research survey of working women, 44 per cent of respondents rated the net a very important medium with which to research health-care products before buying; more than double the number who said they turned to magazines, the next most cited medium, for such information. The conclusions are bleak for traditional media.

The most successful media companies have a presence in digital media such as websites, on mobile phones, social networking, and gaming, where they build relationships with consumers. TV networks are putting content online. Within just a few months of the introduction of Apple’s video iPod in the US, several TV networks, both free-to-air and pay, had begun distributing their shows for download. In April the US ABC network said it would make four of its most popular prime-time shows available free on the web. ESPN makes as much money online as it does through broadcasting.