Pearman Pulse - November 2020

INDEPENDENCE MATTERS

 WARNING – blatant promotion of independent advertising agencies to follow. 

The ‘Independent’ advertising sector is doing very well at present and in the media space we are told the share of advertising billings has grown substantially to 20-25% of the ad pie. The Independent Media Agencies Australia (IMAA) celebrates 9 months on the 19th November and has already had its 50th member join.  We know there are around 800 people working within those 50 members.
That got us thinking, how many people work in independent advertising agencies in Australia?  We estimate there are around 300+ independent media companies in Australia across full service (all media) and specialized (e.g. digital) categories.  The independent creative advertising agencies would likely number a great deal more as there are few cost barriers in starting a creative company. Let’s assume there are 800+ creative agencies in Australia and that all the media and creative agencies range in staff from 1 to 100+ people.  We also looked at IBISWorld who estimates the total Advertising Agency sector in Australia has 8,127 businesses and employs 16,600 people.  An educated estimate has around 3,500 people working in independent advertising agencies in Australia.  Or 20% of the industry based on IBISWorld figures.
So, why does independence matter? Perhaps we are biased but we think the big three reasons are 1. Stability, 2. Being Australian owned and 3. Being Flexible & Decisive.
Stability is a huge benefit to the staff and clients of independent agencies. There is no doubt the advertising industry is somewhat ageist and the independent agencies clearly employ most of the highly experienced people within the Australian advertising sector. The tenure of employment is also longer at independents giving the industry the stability it greatly needs.  Clients benefit from staff stability on their business and the accumulated knowledge of what works and what does not.  Interestingly, the ‘average’ time in business of the 50 IMAA members is 15 years.  Independent agencies also tend to have multiple clients and less reliance on one client with many dedicated staff. When that large client moves, the employees are invariably the first casualties.
Being Australian owned ensures major benefits in supporting the local economy.  Primarily, the taxes and profits stay in Australia as well as the jobs. Independent Agencies are more likely to ensure jobs go to Australian citizens as opposed to flying people in from overseas.
The independent agency’s lack of corporate structure and hierarchy delivers flexibility and speed in decision making. The only boundary an independent agency has are the ones that are self-inflicted. Independent Agencies are not governed by a faceless CFO based in London, Paris, New York or Beijing and therefore do not need to ask permission to get things done. For Independent Media agencies the flexibility also ensures they tend to be more accessible for the media vendors.
Next year may be the Year Of The Ox but we’re hoping 2021 will be the Year Of The Independent.  Here endeth the advertisement.  

WHAT’S NEW IN MEDIA – TV NETWORKS 2021 PROGRAMS, ‘UPFRONTS’!

October was a month for most of the TV Networks to show us what they have install for 2021.
TEN: Get the gold star for the most entertaining upfronts. Using the Wizard of Oz theme to reinforce their major shows will be filmed in Australia (‘coming home to Oz’ - get it). Survivor, Amazing Race and I’m A Celebrity will all be fimed in Australia for 2021. Network 10’s new programs include ‘Making It’ (think home handyman on steroids), ‘The Dog House’ (dog owners meeting their new four legged babies) and ‘First Inventers’ (ancient Indigenous innovations and discoveries). 10’s ViacomCBS influence can be seen with their streaming platform, ‘All Access’, now becoming ‘Paramount+’ and in terms of data they promoted their Viacom insights.

NETWORK SEVEN: Stated they were the network most affected by Covid but expect programing to be back on track in 2021.  Hoping for a hole in one with their new putt putt golf obstacle course called ‘Holey Moley’ which will appear early in the new year.  The Tokyo Olympics is due to start on 23rd July and will be followed by 10th season of The Voice (yes, they nabbed it from Nine). Their other new programs include ‘Ultimate Tag’ (a game of chase like you’ve never seen before), ‘RFDS’ (outback Aussie medical drama) and ‘Australian Gangster’ (a drama). Their Sport includes Cricket, AFL, the Olympics (inc. Beijing Winter in Feb 2022) and Supercars are back on 7. Their data is called ‘7RedIQ’ and claims to know more about their viewers what they do, think & feel.

FOXTEL:  Was probably the most down to earth upfronts with lots of arm chair chats that included Shane Warne and Nicole Kidman. Their CEO, Patrick Delany, was particularly brave giving us a live demo of Foxtel’s ‘voice control’ where we’ll be able to ask the TV to change channels. It didn’t quite go to plan but he handled it well.  In 2021, Foxtel are introducing a free version of Kayo (Freemium Kayo) which is effectively a watered down version of the paid for Kayo.  Foxtel’s ‘Binge’ service, competing against Netflix & Stan, expects Nicole Kidman’s latest series, The Undoing, to be a big success for them. They also suggested ‘The End’ and ‘The Flight Attendant’ will be popular viewing.
For data, Foxtel said their competitors rely on panel data and inference while their data is “second by second real time actions across 2.5m devices”. Foxtel’s data is called Foxtel Xplore.

DIGITAL – BLACK FRIDAY & CYBER MONDAY COMING SOON

Friday 27th November, note the date in your calendar, as this day now marks a bigger sales day than the traditional Boxing Day in Australia. Originating in 1869 and celebrated on the Friday following Thanksgiving in the US, Black Friday signifies the start of the Christmas shopping season, it has now evolved into a global retail phenomenon. But the bargain does not end there, directly following Black Friday is Cyber Monday. This event started in 2005 and is the online equivalent of Black Friday sales focussing on deals through online retailers. In 2019 Black Friday and Cyber Monday saw a 34% year-on-year growth in Australian online purchases whilst Covid has increased ecommerce in Australia by 30%+ over the last 6 months.  So, to quote a literary great, Tina Turner, we can expect these upcoming sales to be Simply the Best. According to the US Business Insider, Black Friday sales favour the more expensive, high-end items and Cyber Monday skews towards gadgets and gifts. A spokesperson for Amazon confirmed that Black Friday in 2019 was the biggest sales day in Amazon Australia’s history. So, what does this mean for you? If you are looking to buy any big-ticket items, get ahead on your Christmas shopping or simply splurge that overseas holiday savings, then set the alarm for Friday 27th November. The sales this year are said to not disappoint with electronics in particular alleged to offer very attractive price-cuts. Our advice would be to do your homework as good deals get snatched up quickly.  Remember to read the fine print because not all deals are good ones and if you’re an understanding employer don’t be too harsh on any sick days around these dates.

SMI UPDATE – SEPTEMBER 2020

The September SMI figures are -24.3% compared to the same time last year.  This looks somewhat worse than August’s -14.4% but realistically September has been greatly affected by the AFL and NRL finals being moved to October.  If those finals were in September we would expect the Sept SMI figures to be similar to August (circa 15 to 18% down). So, it is fair to say, advertising spend seems to be continuing to recover.  This is particularly the case when we know the October figures are looking to be down by low single figures and November is looking better again. If you’ve tried to buy TV in December lately you will know how well the TV stations are doing due to the lack of available airtime.  
  Digital media was once again the best performing sector and only down -2.7%. Similar to last month, the Social sites (+43%) and Pure Play Video (+15%) were the best performing in Digital. TV was down -19%, Radio -27%, Newspapers -46%, Magazines -56% and Outdoor -62%. Unfortunately, Cinema is still in the worst position being down 90%. Within the major categories, Auto (-41%) and Gambling (-24%) had the biggest declines in activity while Government (+30%) continued its spending increase.

FAST FACTS

  1. Australians bet an average of around $90 on the Melbourne Cup race
  2. GlobalWebIndex suggests the average daily time spent on social media is 142 minutes a day
  3. Since June, the number of businesses entering into administration increased 11% in September, while defaults have grown 23%
  4. Global digital ad spending is predicted to be $375+ billion in 2021 (emarketer)
  5. On average, people move house every 7 years
  6. 9.8% of Australian’s smoke (Roy Morgan), in 2017 ABS said it was 13.8%

Coles will soon be selling $259 recycled iPhones

by Harshit Ahuja