However, whilst it is hard to justify a major overhaul of internal processes and investment in new media when the revenue stream isn’t clear, there are very real opportunities today to incrementally increase revenue by cross-selling and driving new traffic to support new advertising streams without incurring major business risk.

The digital marketplace is undoubtedly the future. Media companies need to become attuned to selling new media advertising, from mobile to 3G and IPTV, in a way that complements, not undermines, traditional products and reflects the expectations of the consumer.

Few organisations, however, are willing to make such changes in the face of economic downturn or, to be frank, following the significant dent in revenues that resulted from the problems with premium rate IVR and SMS services last year.

This latter point should be a major wake up call. Organisations have got to get to grips with new consumer behaviour, their likes and dislikes, if any new media strategy is to successfully replace declining revenues elsewhere. Organisations cannot simply sit still. Traditional revenues will continue to decline and the audience will fragment further.

The first objective must be to maximise revenues from existing value-added services, such as competition and content, by cross-selling from one medium to another.  By encouraging a customer using an SMS application to also use a web application or access free IPTV content, the company can begin to increase ARPU, and drive incremental revenue gains.

Taking this initially low key approach, organisations can begin to explore the new media, understand opportunities for revenue generation from IPTV, 3G and mobile without massive risk and whilst gaining some incremental revenue.

However, to make this work, organisations need to engage with service providers that can support and understand traffic generation across the mix, from IPTV to 3G video and advertising into a WAP portal. Without highly innovative, relevant products and services that leverage existing collateral to attract the new consumer across all digital solutions, the strategy will fail to deliver.

Achieving this will be a challenge for media companies and service providers alike. From increasing regulation to multiple payment mechanisms, organisations must address serious barriers to entry to this cross media marketplace.  In reaction to the public’s lack of trust in premium rate mobile services, OFCOM has introduced far more stringent regulations.  While service providers need to obtain the correct licenses, media companies must also ensure they understand these regulations and their potential impact on new business models.

Underpinning the entire campaign must be detailed customer understanding. This will require tight integration between the unified billing platform and a single Customer Relationship Management (CRM) system. It is this information that will enable an organisation to track customer behaviour across every digital medium and then support cross selling activity.

The market has moved from the relative simplicity of 2001 to a highly sophisticated, highly regulated market today. Organisations and service providers alike need to demonstrate cross-media skills and competencies, as well as infrastructure that supports cross-media decision making. And while many are resisting additional investment in a time of declining revenue, this remains a fast changing arena: the further media companies fall behind, the more difficult it will become to put in place a viable, and profitable, interactive strategy.

The opportunity to leverage the power of digital media whilst gaining additional revenue, without incurring high risk, is an attractive proposition for any media organisation. The challenge is to overcome the organisational barriers to create a single, unified offering that maximises ARPU across every media,  mitigating audience fragmentation and developing a very valuable insight into emerging consumer behaviour that will drive on-going success in the digital market.