Broadcast Video On Demand (aka BVOD) is the most important growth area for Television Networks for both viewers and advertising revenue. As any business owner will tell you, it is essential to have multiple income streams and BVOD definitely gives the Networks an additional income stream.BVOD is when you are watching a program online in your own time of choosing. It can be watched either live (via live streaming) or on-demand and is available on a computer, mobile device or connected TV. As opposed to the ‘FTA TV’ (Free To Air) viewing received via an aerial, satellite or cable, i.e. any TV that is not viewed over the internet.There is no doubt BVOD viewing is going to continue to increase as consumers expect to view what they want when they want and internet connected TV usage continues to grow. Presently around 80% of Australians have a connected TV.For the Networks, the digital connection ensures BVOD delivers far deeper audience data and effectively allows them to charge more for that audience. The BVOD audience is usually 2-3 times more expensive than a FTA TV audience based on a cost per thousand. While FTA TV is bought on an estimated audience, BVOD is bought on a per thousand targeted served or viewed impressions. BVOD also allows the Networks to compete in the digital landscape by selling the airtime “Programmatically” as well as on a direct buy. When buying programmatically we can also follow an audience across networks and platforms.PwC estimates the 2020 BVOD advertising revenue will be around $200 million or 6% of the FTA TV revenue of $3 billion. There is definitely room for the BVOD revenue to grow as long as consumption grows.The BVOD audience varies enormously from program to program and is not going to be popular for all programs such as News, ACA or The Project. BVOD tends to be popular for the “tent pole” 7-8.30pm programs. Some of the larger BVOD audiences of late include 129,000 for SAS and 106,000 for Home & Away. These figures represent 12% of their FTA TV audience. Around half the BVOD viewing is on connected TVs, 14% on a mobile and the rest (36%) is shared between a PC/Laptop and a tablet.So, why would an advertiser want to pay 2-3 times more for an audience? Like all advertising, the value is in the impact an advertisement creates. As they say, not all impacts are equal and, in this case, a BVOD impact is greater than a FTA impact for the following reasons;
Roy Morgan Research claims 80% of people watched FTA TV in last 7 days and 27% watched BVOD in the last 7 days. With BVOD delivering record ratings and revenue to the Networks those percentages are likely to be getting closer together. Perhaps the most telling figure that BVOD has a bright future is the audience heavily skews younger with 52% being under 39 whilst only 26% of FTA TV’s audience are under 39.
The Jul-Sep20 Roy Morgan readership figures for Newspapers and Magazines have been released recently. Guess what – print readership is up! The big winners are the Sunday newspapers that are up a massive 22% in readership compare to a year ago. Interestingly they are also up 11% when comparing Sep20 quarter to Jun20 quarter. In other words, Covid to Covid. Across Australia, this translates to an additional 650,000 people reading the physical Sunday papers from a year ago. The Weekend Australian and Saturday’s Financial Review have also had huge readership increases with around 260,000 additional people reading those papers. Across the nation, Mon-Fri newspaper readership is up around 5% except for Melbourne which has been affected by their lockdown.Unfortunately printed Magazine readership didn’t do as well on a year on year comparison. However, from quarter to quarter, there were a number of successes in double digit readership increases. They include Womans Day, Marie Claire, Vogue, Elle, Frankie and Belle. Interestingly, in the midst of Covid Australians have turned to home improvements (Bunnings Mag is up 30.5%), cooking (Gourmet Traveller is up 64%), world events (Time is up 36%) and looking after their finances (Money is up 55%).
Firstly, what is Omnichannel retailing and why is it crucial for brands?Every brand wants each individual customer to have a seamless experience and relevant messaging throughout their sales journey. An omnichannel customer experience is made up of individual customer touch points, over a variety of channels that seamlessly connect, allowing customers to pick up where they left off on one channel and continue the experience on another. An omni-channel experience accounts for each platform (website, blog, Facebook, Twitter, etc) and device (desktop, mobile, tablet, Apple Watch, etc) a customer will use to interact with the company. That knowledge is then used to deliver an integrated experience.A good example is knowing a customer shops at a certain location and if a product is out of stock in that location you would not serve them an ad for that product. Or if a customer buys a particular product on a regular basis you would map out the appropriate time and creative to serve them an ad.In a “multi-channel” environment (what most businesses invest in today), the customer has access to a variety of communication options that aren’t necessarily synchronized or connected. Research shows customers that have had an Omnichannel retail experience are more loyal (up to 20% increase in return shopping trips) and more likely to recommend your brand to friends and family. In effect, they spend more!Organising Omnichannel marketing will require working closely with several departments (Product, Marketing, Sales, Customer support, etc) in your company. The following is a good place to start;
While the transition from single channel to multi-channel towards omni-channel isn’t easy, 2020 has seen many businesses embracing the change. There is no doubt that 2021 will only increase customer demand towards greater centricity and personalisation.
The October advertising spend figures are looking good at just 4.8% decline year on year. We appreciate declines are not great however this is the lowest decline in advertising spend since September 2019. Looking into November and December, SMI is suggesting that November could become the first positive month of advertising spend in two years.
The categories that greatly helped October were the Food/Produce/Dairy (+42% YOY) and the Alcoholic Beverages (+47%) categories. No doubt moving the AFL and NRL finals into October encouraged those two categories to increase their spends. ‘Retail’ spend was also up 7% presumably the start of the pre-Christmas spend. Metro TV was the stand-out performer with a $32.6 million (15.7%) increase. Again, the sports finals would be a big factor in this. Digital was next best at -0.4% with the Social sites having a massive 45.5% increase whilst Programmatic reduced by -28.2%. Programmatic trading has eaten into Content Site bookings for many years, and now SMI suggests the trend seems to be reversing with the ongoing decline in Programmatic now seeing the value of Programmatic spend fall below that of Content Sites. Radio was down -17.1%, Newspapers -25.4%, Outdoor -46.5%, Magazines -51.5% and Cinema -91.3%.
Everyone at Pearman wishes you a Merry Christmas and happy New Year!
by Emily Searle
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.
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.
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.
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.
Coles will soon be selling $259 recycled iPhones
Given around 40-50% of every advertising dollar is spent online, the impending ‘cookie-less’ world (14 months from now) is a substantial issue facing the industry. A ‘cookie’ is a small piece of data stored on the user's computer by the web browser when a user visits a website. We all use browsers (Google Chrome, Firefox, Safari, etc, etc) to navigate the World Wide Web and each time we go to a website the browser keeps that information stored. Up until now, cookies have played a major role in digital targeting, measurement and strategy.Technically there are 1st party cookies which are set by site publishers once you visit and then there are 3rd party cookies which is what is being phased out. The 3rd party cookies are valuable as they keep track of a user’s history across the entire internet. The 1st party cookies track users across the publishers own sites and not where else they go.Losing the 3rd party cookies, without an alternative, means advertisers will find it more difficult to;
3rd party cookies have already been limited on the Safari browser (default for Apple) and Firefox. The Chrome browser representing 50%+ of all internet traffic, will follow and progressively block cookies on its users between now and 2022. Impressions, clicks & views will still be accurate but won’t deliver the same insights. For example, 5,000 weekly impressions could be 5 impressions to 1,000 people or 1,000 impressions to 5 people. For ‘Clicks’, the only attribution modelling you could do would be based on ‘last click’ attribution. Last clicks have been proven to have very low to no correlation with ad effectiveness for nearly 20 years. The race is now on to find an alternative to tracking behaviour on the internet.Perhaps the biggest reason an alternative will be found is it is financially advantageous to Publishers. Simply put, a Publisher can charge 4 times as much for a targeted / specific audience (measured by 3rd party cookies) than it can for a unmeasured ‘thousand impacts’. As you can imagine numerous digital players are currently working on a solution to prepare for a cookie less world. The Trade Desk is partnering with IAB, NAI and ANA to list a few in replacing cookies by another form of unified ID across the web. The Trade Desk is proposing consumers log into websites using their email and at the same time set their privacy preferences. These email addresses are then hashed and encrypted and will replace the cookie with a new common language for the ad tech industry. This ID Encryption Service will help provide a layer of security, accountability and consumer control that cookies presently don’t provide. The tracking effectively moves from browsers and onto people’s email & device ID. The diagram below best explains The Trade Desk’s proposal.
If you want to understand more about the implications of a cookie less world, the following link from the IAB Australia is an informative read. https://iabaustralia.com.au/resource/beyond-the-cookie-mapping-the-future-of-marketing-measurement/
Ch10 launched the latest free to air TV station on Sunday 27th September and it’s called ‘10 Shake’. It is Ten’s 3rd digital station (after 10 Peach & 10 Bold) while Seven has 3 ‘digi’ stations (7mate, 7two, 7Flix) and Nine has 4 (9Go!, 9Gem, 9Life & 9Rush).This new station has its origins in the CBS purchase of Ch10. CBS (now ViacomCBS) owns MTV, Nickelodeon & Nick Jnr and Ten has recently been selling advertising on those stations even though they appear on the Foxtel platform. Network 10 has the highest percentage of an ‘under 50’ audience (42%) and they say 10 Shake completes their Under 50 dominance.10 Shake daytime programs will be for kids (SpongeBob SquarePants, PAW Patrol, Dora The Explorer, etc) while night time will be focussed on “big kids” (Teen Mom Australia, Comedy Central Roasts, Drunk History US, Lip Sync Battle, etc). As kids programs attract very little advertising dollars it’s reasonable to ask why start a station dedicated to kids? Perhaps this is just a good way to launch 10’s fourth station with content that comes very cheaply for them and reinforces their youth appeal.
Although online shopping was steadily increasing before Covid-19, the effect of Covid has been far more widespread than anyone could have predicted. As bricks and mortar stores were closed, Australian ecommerce boomed with 5.1 million households shopping online in the month of April. Year on year, ecommerce has increased over 80%. In 2019, 1.6 million households bought something online each week while in April 2020 that figure rose to 2.5 million households each week. By the end of 2020, ecommerce is estimated to account for 15% of the total retail market (excl. cafes, restaurants & take away).The early adopters of online shopping primarily wanted cheaper goods although the post Covid online shopper could represent the rise of the convenience shopper, less price conscious and keener on customer service. They want it to be hassle free and for the items to arrive quickly. The unprecedented rise in recent months has shifted consumer behaviour to a stronger reliance on technology to undertake everyday activities, as well as a change in Brand Loyalty as many customers in lockdown were forced to buy through necessity rather than preference. The rise of the ‘Buy Now Pay Later’ services has also played its part by providing consumers with more affordable ways of purchasing online items. Interestingly the time of day for online sales has been spread out a bit more since Covid although the 7-10pm and 2-5pm areas still make up 50% of all the purchase times. Retailers have the unique opportunity of capturing this ever increasing online shopper if they can set up efficiently for ecommerce. A growing consumer base with an increased confidence in online shopping is now available, making this a perfect time to introduce ecommerce into your business if you haven’t done so already.
As they say, everything is relative in life. Although the August advertising spend is down by 17.2%, it is being touted as a good result despite it being the 5th worst result since 2007 when SMI started,. Probably because the 4 largest declines of all time occurred in the previous 4 months (Apr-Jul’20). Therefore, August is seen as the media agency market continuing to recover after Covid wreaked havoc on client’s advertising spend. The Digital media reported the most resilient result with bookings back just 4.7% as both the Social Media (+30.6%) and Pure Play Video Sites (+28.7%) sectors delivered strong growth. TV also reported a solid result (-11%) with the Metropolitan TV market delivering the smallest YOY decline of 10.7%. The recovery is underscored by the fact that more than a quarter of all SMI Product Categories reported higher media investment in August. Supermarkets, Health Insurance, Government, Health Care, Household Cleaning Products and Smartphones all delivered double digit growth, while Bank Brand/Sponsorship lifted 8%.
This week Facebook came out swinging (in the NY Times) against the ACCC’s draft code in what is looking to become quite a fight with the Australian Government. In a nutshell, the code will force Google & Facebook to pay Australian media companies (predominantly News Ltd & Nine) for using their news stories. Although this is local, it is seen as a test case for the world and has the potential to be adopted globally which is probably why Facebook announced their response in New York. Remember Australia leading the way with plain packaging cigarettes? As you would expect, there is an enormous amount of dollars at stake and potentially intellectual property for the tech companies. The consultation with the stakeholders finished last Friday so the next step is the release of final ACCC code. Facebook said it will stop the sharing of local and international news on Facebook & Instagram while Google says it won’t be able to guarantee relevant articles on Google Search & YouTube.Back to what’s at stake? News Ltd have said it is worth $1 billion however Google is talking about a $10 million figure. Only a $990 million difference in opinion! Presently the code gets each party to enter negotiations and nominate a dollar figure for what they believe the news content is worth. After 3 months of negotiations, each party submits a bid figure and an arbitration panel selects one of those figures that both parties must abide with. This makes it dangerous for either party to shoot too high or too low as they could potentially drive the panel to select the other’s bid. After 3 months of discussions and negotiations we assume the difference will be smaller than $990 million.As a mechanism to resolve a dispute, the code looks to be quite clever however perhaps the real question is why is it being proposed. The ACCC Chair, Rod Sims, said “there is a fundamental bargaining power imbalance between news media businesses and the major digital platforms, partly because news businesses have no option but to deal with the platforms, and have had little ability to negotiate over payment for their content or other issues”. The tech giants say they are a benefit to the companies as they send traffic to the news sites (2.3 billion clicks sent to Australian news sites from Jan-May 2020). While the news companies say the clicks are worthless as there is no data behind them and they can’t be sold to advertisers. So that still leaves the question of how much benefit is Google and Facebook gaining from the news stories. Only about 4% of Facebook’s News Feed is actually “news,” as opposed to posts from family and friends, while Google doesn’t monetize Google News and says that only about 1% of searches in Australia have anything to do with current events.The code only targets Google & Facebook (no mention of LinkedIn or Twitter) and for Australian media companies it excludes the ABC & SBS and any small companies with less than $150,000 revenue. The code also requires the tech giants to share algorithm changes and details on user data with the news companies. While the arbitration panel is told it must consider the direct and indirect benefits (whether monetary or otherwise) to Google & Facebook. That does seem to be quite a vague way of determining ‘value’. There is no doubt the news companies have suffered since the ’rivers of gold’ classifieds, job ads and car sales migrated to the internet and it is good to see Government trying to ‘balance the power’. The news stories on Facebook and Google do enhance the consumer experience and deliver more data to the tech companies however the question around how they monetise that is highly contentious. This will be fascinating to see how it plays out and who comes up with the bigger knife.
Covid greatly affected the media from April – June 2020 and therefore they had little demand and lots of supply. A great time to be buying advertising … if you were fortunate enough to be in that position. In addition to that, most of the media, except Outdoor and Cinema, had increased consumption which again made it a very opportune time to get tremendous advertising exposure.Looking at the latest SMI figures it is clear to see increasing advertising spend across most media. In particular, Television and Digital are in a substantially better positions than they were in May. Television’s demand has grown around 50% from May meaning their ‘availabilities’ have dwindled and it is now difficult to buy short term. TV buys now need to be done 4-5 weeks out to get the programs you want. Digital is somewhat less clear to see the ‘Covid’ benefits as much of it is auction based and ‘supply’ never seems to be too much of an issue. The ‘direct’ buys with particular websites have seen some good deals.The Oct-Dec run up to Christmas period is invariably in high demand and even in this Covid year we expect that to continue. There are absolutely still great opportunities to be had however they are possibly more likely to be in Radio, Outdoor, Cinema and Print where supply & demand works in favour of the advertiser.
Samba TV (https://samba.tv/) is a global technology company gathering TV viewership from users that voluntarily opt-in on their smart TVs (via the settings). They have deals with many TV brands including Sony, Sharp, TCL and Philips and have access to 35 million smart TV sets in the US and globally. The adoption is increasing in Australia with around 100,000 TV sets to date. The exciting news is that Samba TV has recently partnered with 2 programmatic leaders, The Trade Desk and MiQ, to allow advertisers to target an audience across multiple screens (TV, desktop, mobile, etc). This allows advertisers to follow an audience across linear TV, streaming services, Foxtel and video programmatic activity. This presents opportunities for media planning as we will be able to control the frequency / exposure of the advertising across multiple screens. Samba also determines exactly what has appeared on the screens so we could also target an audience that has specifically seen competitors advertising.For marketers, this unlocks unprecedented access and bridges the gap between digital and offline screen targeting further.So why would anyone want to opt-in to Samba TV? The main attraction resides in the personalisation of their TV viewership allowing them to get tailored program recommendations (similar to Netflix).In the months to come (Q4 2020 TBC), the targeting options will increase with the ability to target users based on specific program viewership or their watching behaviour (light viewers, tv bingers etc.).The long awaited promise of fluid offline and online screen integration is getting closer!
The latest SMI data is moderately good news as it is the lowest decline (-28.4%) since March. At this stage, the month of August is also looking better again. The 12mth year on year comparison shows the Australian ad spend is down-16.2%.
July was an improvement for Radio (-29%) but unfortunately Outdoor continued to have the highest decline at -66%. TV (-23%) and Digital (-16%) continued to improve their advertising income as did Newspapers at -38% and Magazines at -60%. Despite Cinemas opening again in July the ad revenue was slow to follow although the closure of Victoria did not do them any favours. On a positive note, Cinema has a lot of ‘blockbusters’ to cram into their schedule between now and Christmas. ‘Reail’ is the second largest category and the good news is it is beginning to stabilise and was only down -3.8% compared to July’19. The bad news is that the largest category, Auto, was down the most at -52%. Perhaps the stockpiling of toilet rolls has run out as ‘Toiletries / Cosmetics’ was up +21% and of course the Government continued to increase their spend with a +38% increase
It is no secret that the print media has suffered horrendously since Digital rolled into town however the last three months has been particularly bad for them. Perhaps it was always heading this way and Covid simply fast tracked the inevitable.
In late May, News announced it was closing the printed editions of over 100 Suburban and Regional papers to move them to Digital only editions and 14 were simply closed. These closures represent around 20% of all newspapers in Australia. Printed newspapers have been struggling for some time with advertising revenue through agencies more than halved over the last 5 years from $550 million to $250 million per year. At least Newspapers seem to have been recouping around 60% of the lost print advertising through their digital advertising sales. They are also gaining income from digital subscriptions and have the benefit of being backed by some of the biggest media players – Murdoch, Stokes & Nine. The recent ACCC rulings for the big tech companies to pay for news content should also be a bonus for newspapers.
Magazines have possibly been in a more vulnerable position than newspapers as they coped with the Digital onslaught, competition from newspapers introducing lifestyle / magazine sections and (in hindsight) not choosing the right digital strategy. The Magazine sector’s advertising revenue has been hit harder than newspapers as 5 years ago it was around $147 million and today its $64 million. That is about the same amount that James Packer paid for his unit in Barangaroo (wonder what Kerry would think). The fallout from all of this was seen last month as Bauer Media (now owned by Mercury Capital) closed 8 magazines - Harper's Bazaar, Elle, Men's Health, Women's Health, InStyle, Good Health, NW and OK. They also moved Girlfriend to a digital only title. Many of these magazines had expensive global licenses attached to them which would have contributed to their demise. Even though it seems there was consumer demand for the 8 deleted magazines (they were read by around 1.2 million people), clearly they were not able to be profitable. With the benefit of history, we can see that Bauer’s decision not to use the heritage of their magazines mastheads for digital editions may not have been a good move as they wrapped up all their mastheads into www.nowtolove.com.au and www.homestolove.com.au
All these deceased print publications have left many clients searching for ways to effectively reach their targets. The suburban papers serviced an important local market for clients who want to reach a specific geographic target. While burying those magazines has left a big gap for Fashion and Health related clients.
Hopefully, this ‘rationalisation’ will put both the Newspaper and Magazine sectors into a healthier situation so that they can prove there is an afterlife.
In the free to air TV world, supremacy and bragging rights are fought out in ‘Peak’ night time of 6pm-10:30pm. A mere 31.5 hours of content weekly. However 10.5 hours are already spoken for with News and Current Affairs (with Network 10 a little different). The crucial 7.30-9:30pm period is what the networks concentrate on to compete with ratings and stem the leak of FTA viewers to Streaming services. Live sport takes up some of this but then it is over to the ‘tent pole’ programs to bring home the bacon!
This year it has been interesting seeing the Seven Network resurrect old formats. First came the 12th season of Big Brother that had previously been on TEN for 8 seasons (2001-2008) and Nine for 3 seasons (2012-2015). Surprisingly its revival on Seven seems to have been a success with ratings 10% above the last season and attracting younger demographics for Seven. Something Seven had struggled to achieve at 7:30pm. We know it has worked as Seven has now renewed it for another series next year. The next big test is the revival of The Farmer Wants A Wife. Nine ran 8 episodes between 2007-2012 and then had another crack at it in 2016. After 9 marriages and 20 babies, Seven has just started airing the 10th episode. The initial ratings look like it could be a success as they are 20% above the 2016 ratings.
You may have heard that the ‘Black Lives Matter’ movement encouraged a July Facebook boycott by a number of large clients (Coca Cola, Unilever, Starbucks, Honda, etc). The idea was to put financial pressure on Facebook to stop displaying hateful content. At the time some media had headlines saying this would “slash Facebooks advertising spend” and that it had cost Mark Zuckerberg $72 billion (due to a drop in share price). As good intentioned as the protest may have been, the ‘hurt’ has definitely not lived up to the headlines.
Facebook’s share price today is 13% higher than it was in early May 2020 or put another way, its market capital grew by $75 billion in 3 months. The company’s ad sales in the first three weeks of July also grew 10% year on year. Facebook’s monthly active users were also up 12% year-on-year to 2.7 billion. With much of the world in lockdown at home it is no wonder consumption of their platform has increased. Interestingly Black Lives Matter has a Facebook page with close to 700,000 followers and many would have been active in July.
The protest has drawn attention to the real strength of Facebook which is its massive long tail of businesses all contributing to its $70 billion annual revenue. 98% of that is from advertising. Facebook has millions of advertisers with small to medium sized businesses making up 76% of all its advertising revenue. It is estimated around 1100 companies joined the boycott which effectively became a symbolic gesture.
Facebook’s real threats are twofold. 1) Politicians thinking they have too much power and 2) a potentially ageing customer base.
Facebook (as well as Google, Apple & Amazon) have recently had the US Congress accusing them of using their market power to crush competitors and distort the political debate. In Australia, last week the ACCC released a draft code forcing Facebook and Google into a negotiate-arbitrate model to compel them to fairly pay Australian media companies (mostly News & Nine) for the use of news content on digital platforms. Of course, the biggest threat to Facebook could be that Generation Z does not want to see their parents on the same social platform as themselves.
The latest SMI figures for FY20 show the worst year ever for media advertising spend as it is down by more than $1 billion dollars compared to FY19. Although June’20 bookings were down 35.7% compared to June’19 it could be viewed as positive as they were expected to be 40%+ down. June is also an improvement on the April and May figures. SMI also has insight into forward bookings and they are showing an improving market. Overall, FY20 was a 14.7% decline compared to FY19. The Sydney agencies had the lowest decline of the 5 capital cities.
Outdoor continued to have the highest decline of any media at -66% for the month. Magazines were close behind at -62% and Newspapers were -47%. Radio improved a bit from May being down -43%%. While Television was down -34% and Digital -20%. For FY20 the only major product categories showing any growth compared to FY19 were Insurance at +5.3% and Domestic Banks at +0.4%. The two biggest categories of Retail and Automotive Brands were down -13.3% and -23% respectively
That was Gordon Gecko’s motivation (from ‘Wall Street’) to convince shareholders that his way was going to put cold hard cash into their pockets. It could be suggested not a lot has changed since that 1987 movie with ‘share price’ being the main and most compelling measure of a company’s success. Share prices now make the nightly news and are relied upon by tens of millions of investors, especially retirees looking for dividends. Companies also rely on their share price to raise capital when issuing more shares. Perhaps the biggest driving force for a high share price is many senior management positions have stock options based on the performance of their company’s share price. Unfortunately, stock options can cause management to focus on short-term performance or to manipulate numbers to meet targets.
So where do the people who make the profit (aka the employees) rank compared to the share price? Sadly, the answer is probably not too high. Companies obviously need to ensure they are financially healthy to keep employees in jobs but how much profit is enough? It seems the system we have puts enormous pressure on CEOs, CFOs, and other corporate leaders to move heaven and earth to keep their share price high.
The “triple bottom line” (TBL) was coined in 1994 and aims to measure the financial, social, and environmental performance of a company. The three elements being profit, people and the planet. The idea is a company can be managed in a way that not only earns financial profits, but which also improves people's lives and the planet.
The TBL seems to have come in and out of vogue and only for a short period become mainstream. For independent companies, with a handful of shareholders, it is probably easier to put the TBL in place. For listed companies, the only hope are the investment firms that control enough of a company to ensure management take notice. Interestingly the world’s largest investment firm, BlackRock, seems to have done that recently. BlackRock have $10 trillion in assets under management (yes, trillion) and has put climate change at the centre of its investment strategy. They have said they will abandon companies heavily invested in thermal coal and demand that companies report their exposure to climate change risks, their contribution to emissions and their plans to reduce them. In Australia, the $52 billion HESTA super fund has also divested holdings in thermal coal companies.
It’s great to see large investment firms looking after the planet although wouldn’t it be fantastic if employees were prominent in the triple bottom line as well. Companies rarely grow on the back of unhappy employees. It’s the commitment and talent of employees that power most successful companies. Any good manager knows staff motivation is crucial in the financial health of a company. This is particularly relevant to acknowledge today given the number of retrenchments in the news of late.
Naturally companies need to be profitable although a sole focus on the P&L or balance sheet must surely breed more Gordon Geckos. What a wonderful world it would be if all companies adopted the triple bottom line so that staff and the planet are also looked after!
Around 80% of cinemas are opening today (Thu 2nd July) in time for school holidays. The initial movies will be a mix of recently released movies and classics (eg. Harry Potter) along with reduced pricing.
After July there will be many blockbuster movies crammed into 5 months from Aug-Dec’20 that were due to be released pre-covid 2020. Some of the big movies coming our way are Tenet (13th Aug), Mulan (20th Aug), Wonder Woman 1984, Bond ‘No Time to Die’, Black Widow and Top Gun Maverick.
The audiences are anticipated to be 50% of Pre-Covid averages across the Jul – Sep quarter and then returning to 85% during the Oct – Dec quarter. Interestingly NZ has been re-opening for the last 6 weeks with 95% of Cinemas open and audiences have been growing at an average of +73% week on week over this time.
Amazon started life as a book reseller and now sells virtually anything online. While many companies are still coming to terms with the impact Covid-19 has played on their industry, the American giant continues to slowly but surely cement themselves throughout the digital advertising marketplace.
In the US, Amazon now receives around $12 billion p.a. of the digital advertising spend. They sit only behind the digital ‘duopoly’ of Google and Facebook. Their increased presence in the US market doesn’t stop there as many surveys have shown that the site is number one for product specific searches throughout the US, with up to 55% of consumers saying they still start a product search on Amazon.
Having only just started in Australia a few years ago, Amazon doesn’t quite have the same presence they do in the US, but they are slowly starting to get a foothold across the Australian retail market. Over the last 6 months the Australian site has seen around 26.5 million visits. Recently, Amazon has also announced a $500 million investment in a new Western Sydney distribution centre that will house around 11 million different products. This should go a long way to increase their delivery speeds.
With an increase in fulfilment centres and the introduction of Amazon Prime, the company is looking to drive more consumers to the site and become the ‘one stop shop’ for online retail products. Something that is not currently seen in the Australian retail market. As Amazon’s market share increases throughout the Australian digital landscape more opportunities for advertisers will follow from a bigger database of consumer habits.
The latest SMI figures show May’20 is down 40% compared to May’19 as the full impact of Covid is being felt. The early June figures also show a 40%+ decline in spend putting the industry on track to a record quarterly decline in Q2 (Apr-Jun) of about 43%. In dollar terms this decline represents a staggering $700 million loss of media investment or circa $70 million of potential media agency revenues. However, SMI’s data shows future demand returning to more typical levels in July and August.
Outdoor had another painful month with -71% while Radio was not far behind with -56%. Television was down -36% and Digital was -26%.
In this desolate environment, the only major product category reporting any growth is Domestic Banks with their total bookings up 6.2% in May. Among smaller categories there has also been growth in the In-Home Entertainment and Household Supplies categories. But unsurprisingly large categories such as Automotive Brand (-62%), Restaurants (-43%) and Clothing/Fashion Accessories (-76%) are reporting significant declines. And the Travel category, which in May 2019 was the market’s fifth largest, has slumped 92% to now sit in 30th position.
Whilst on the subject of Programmatic, it is the latest thing to hit the Outdoor medium. Just when you thought you were safe from acronyms, the Outdoor industry has introduced DSPs, SSP’s and pDOOH (programmatic digital out of home - in case you didn’t know). pDOOH uses audience data from device ID information (computers, mobiles, etc) to identify behaviours and then analyses the movement patterns of those device ID's and identifies the individual screens that fall within the movement patterns. Therefore the data is still based on a trend and likelihood of a consumer being in front of a sign, not a particular person.How it works is the Outdoor companies allow Ad Tech companies (eg. Vistar, Hivestack, etc) to sell specific digital sites on their behalf. Clearly they are sites that the outdoor company has not been able to sell in the “traditional” way. At present a number of Outdoor companies are trialling pDOOH although oOh! are not part of the trial. The media agencies buy pDOOH from the Ad Tech businesses, not the Outdoor companies. The biggest difference is the Ad Tech companies sell it on a ‘cost per thousand’ impressions reached as opposed to by week or by month. To determine how many people have been reached at an exact time is certainly questionable in this whole process. Outdoor is a ‘one to many’ medium which does make it somewhat difficult to charge based on specific target CPMs.pDOOH’s advantage is sold as better targeting, greater flexibility (can easily move or pause a campaign) and ability to buy across all Outdoor companies. On the down side, pDOOH has limits on available inventory and is less likely to factor in the quality of each site. The vast majority of clients buy Outdoor for a mass reach and strong branding so seeing the environment before buying is extremely important.In 2019 pDOOH accounted for around 2-3% of all Outdoor spend in the U.S. (after 8+ years in market). In Australia it is presently accounting for possibly 0.2-0.4% of spend.
In the 1800s John Wanamaker (a successful US merchant) is alleged to have proclaimed, “Half the money I spend on advertising is wasted, the trouble is, I don’t know which half”. We know advertising works however determining exactly which placement or why certain advertising worked remains the holy grail. The growth in data and attribution modelling certainly helps but it is still not an exact science and sometimes all the data makes it more confusing.The first step to establishing effectiveness is to know who has seen the advertisement. For Offline media, we use research such as Morgan (print), OzTam (television), GFK (radio) and MOVE (outdoor) to determine who has the potential to see an advertisement. The systems cannot be exact although the good news is Australia is ahead of most of the world in terms of the quality of research and survey sample sizes vs population.Once we know who is seeing the ads, we then need to ensure the advertising appeared as booked. For most media there are third party companies that can verify the booked media did in fact appear. On very rare occasions an ad may appear in print that is not legible, or a TV ad is cut short or an Outdoor ad is not posted properly. These cases are very rare and generally have an extremely low effect on any impact. In addition, advertisers naturally get compensation if that happens.For Digital advertisements, determining how many people have the potential to see advertising is more of an exact science than offline media. Meaning digital is measured on a one to one basis as ads are served to specific digital screens. It is also possible to use an independent third party for impression measurement by using an adserver such as Flashtalking for delivering the advertising to the digital screens. Naturally, the big caveat with digital is “potential to see” as the medium is more susceptible to fraud than offline media. A bot used to be something you sat on but now is enemy no.1 for digital advertisers. Bots generate fake browser data and create fabricated URLs which effectively means no humans are seeing those impressions. Programmatic buys are particularly vulnerable to bots. A recent report from PwC and the Incorporated Society of British Advertisers (ISBA) said 88% of advertising impressions could not be fully traced through a spaghetti map of programmatic suppliers and operatives.Perhaps the question should not be who is seeing the advertising but how effective is the advertising? That is where digital has a perceived advantage as it is accountable through clicks. That also explains why Programmatic advertising can be somewhat vague as it tends to deliver the lowest cost per clicks even if half the money is wasted. Of course, the most important question is what drove someone to click so you can attribute which half of your advertising worked!
The privacy concerns around how personal data is being used in the Digital world has ramped up enormously since the Cambridge Analytica data breach in early 2018. The cookies attached to ads to track where people have come from when they arrive at a website will soon be a thing of the past. Users on the Safari browser (the default Apple browser) and Firefox can already no longer be targeted based on their previous site visits (which impacts mostly retargeting and prospecting tactics for display and video activity). Chrome browser representing 50%+ of all internet traffic, will follow and progressively block cookies on its users between now and 2022. Effectively it will be a cookie-less world in digital with no information stored from people web browsing behaviour (interests etc.).This will mean knowing who has come to a website or retargeting and attribution reporting is going to get a whole lot tougher. Retargeting people who have been to a website has often been the best performing digital tactic for acquisition. It will soon become difficult to build a remarketing audience based on people who have visited your website without completing any trackable action. Facebook retargeting will remain available. In terms of attribution, there will be an increase in unattributed conversions as landings to a website cannot be tied back to users. This will lead to the undervaluing of display and video activity in attribution modelling. Reach and frequency modelling or frequency caps will also be greatly affected.Before most of the cookie data is cut off it is very important to prepare for the cookie-less world and enact the following.
The latest SMI figures show April’20 is down around 35% compared to April’19. While March was down 10.6% there was talk that April could decline by 40-50% so perhaps April is not that bad. It is likely April will be the month most impacted by Covid so May and June may be down 20-30%. From Q3 (Jul-Sep), there is a general feeling that things are getting better and it will be a big improvement on Q2 (Apr-Jun).Cinema was most affected due to not being open. Outdoor suffered greatly(-60.6%) as April was the height of lockdown and people were not moving around as much. Magazines (-51.8%) were next although ad spend is likely to get worse for that sector as it suspended many titles in May. Surprisingly, Radio was next worse at -43.7%. Radio tends to carry a lot of direct and smaller businesses who have suffered most during the lockdown. Digital, Television and Newspapers were down 25-35%.Auto (-46%) and Travel (-77%) once again showed the biggest declines. Whilst Domestic Banks (+16%) and Government (+20%) certainly helped the market.
(Author: Dr Ross Honeywill - www.premium.net.au)The architects of recovery will not be economists or politicians - they will be consumers. It will be a two-speed recovery and the fast lane will be driven by a band of recession-busting consumers known as the New Economic Order.
Consumers are, after all, the ultimate shareholders of the consumer economy, so ignore the future-shapers at your peril. So, who are they, and what are the building blocks of the next normal?Twenty-four percent of consumers, the New Economic Order or NEOs are already shaping their new reality; and planning for what it will look and feel like to come out of the COVID lockdown. There are 4.7 million NEOs in Australia, 60 million in the US, and they are not called the New Economic Order for nothing – they are the most economically valuable consumers in the economy. History shows that if you follow them, you will find a better future.The culture that emerges after the looming recession will be characterised by 10 pillars:1. Purpose & Meaning ("If I’m not fully immersed, I’m just a spectator")2. Control ("We’re taking back control – in every part of our lives")3. Sustainability & social conscience (donate, protect, care, support, foster)4. Hyperlocal ("At home or across the globe, I want an intensely local experience")5. Human scale (authenticity, artisanal deliciousness, and beauty)6. Think Small ("Stop shouting at us, we just want the quiet truth")7. Inconspicuous consumption (experience something extraordinary that just fires)8. Digital acceleration (expanding new online channels, live streaming & connectivity)9. Post-material mindset (betterment in mind & body, art, culture, personal challenges)10. Inclusion (a hyper-focused subject or purpose in online communities of interest)Intelligent business leaders are already charting the new course back to growth. And the starting point is the consumer who embodies all 10 recovery pillars – the NEOs.History and data science give us a glimpse into why this is an economic imperative for business.Fundamentally, NEOs are more resilient than low-value Traditionals. Looking back on the economic impact of 9/11, SARs and the GFC, the data reveals that while NEOs may halt their spending on luxury products and experiences during the deepest period of uncertainty, they never stop their elective spending.Then they’re back spending, borrowing and investing across the board sooner and more frequently than anyone else. And they recover months, even years, ahead of Traditionals. This reflects a NEO’s sense of their own ‘individual economy’ shaped by desires, personal confidence, optimism, imagination, and prospects. This is radically different from a Traditional’s reliance on perceptions of the traditional economy as their bellwether. After the GFC of 2007/08, NEOs recovered sooner and their recovery rate was much faster. NEO resilience explains why by mid-2009 NEOs were 20 points ahead of Traditionals in consumer confidence (Roy Morgan). And by 2010 the lead had stretched to 24 points. Fast-forward a decade and the confidence gap between NEOs and Traditionals is still more than 20 points. It is systemicA resilient consumer brand needs resilient consumers. So, as the COVID-induced recession bites, the smart money's on the future-shaping NEOs to keep spending through the crisis and be back driving the fast lane of recovery, first and fastest. Australia’s 10 million Traditionals will remain stuck in the slow lane.
It is a safe bet that all sporting codes are going to be very nervous negotiating their next broadcast deals. The deals are done on 4-5 year commitments and as per below its getting much harder to justify the spiraling increases.
Rugby is in the midst of trying to negotiate but it is generally thought they are being offered half of what they were getting at around $30mil per season. Rugby League and AFL will be the next to negotiate and must surely be apprehensive about their sponsorship deals. Sport has traditionally delivered strong ratings however as ad revenues slide or remain static the TV stations simply can’t afford to keep paying more. This will certainly leave the door open for telecommunications companies (who have the money) to become more involved. Optus led the way paying $63million per season for the Australian coverage rights to the English Premier League which has been a big success for them. Either way we think all sporting codes will need to tighten their belts which is probably bad news for your pay packet if you are planning to be a professional sports person anytime soon.
Ten years ago Digital made up roughly 10% of all advertising spend through agencies while today it accounts for 30%. The spend has grown from $700 million to over $2 billion in the 10 years. This was mostly through continuous double digit growth from 2010 to late 2018 when it started to splutter, as did all advertising spend. Digital spend has now been flat for the last 15 months.Where we’ve advertised in Digital has also changed over the years. In 2010, Google accounted for 17% of all digital spend but today accounts for 36% and Facebook has gone from 2% to 13%. Together they now get 49% of every dollar spent on digital advertising. Nine Digital & News Digital are the next two biggest Networks and together make up a little under 10% of all spend. There has also been a trend to spend with the larger content sites (like Nine & News) at the expense of the very long tail of smaller sites.How the money is being spent has changed quite a bit with Programmatic making up approx. 20% and Video becoming 10 times more popular sitting at around 25% of spend. HTML5 improved the video experience and its introduction in 2014 on smart phones certainly helped mobile video advertising increase. 2014 was also a big year for Facebook as it introduced “Premium” video ads (playing automatically on a users feed) as well as “Carousel Ads”. This increased Facebooks appeal as well as spend on mobiles.Virtually all categories have ramped up their digital spend. Auto remains the largest with around $250mil spent annually and has grown from 10.7% share of digital spend to 12.3%. The second largest category, Retail, was spending $18mil in 2010 and now is spending $172mil. Its percentage of all Digital spend has risen from 2.9% to 8.4%.So the past 10 years has seen enormous changes for Digital with how much we spend, where we spend and how we spend the advertising dollars. Given that it is now over $2 billion through agencies it is not surprising it seems to be settling down somewhat for its place amongst all media. *Source: SMI
The next six months are certainly going to be depressing reading for the SMI figures. March has just been released and is down 10.6% compared to March 2019. The declines can be expected to be more severe in the next few months. Although Covid-19 had some impact in March its real damage will be shown in April-June.
All media suffered and particularly Cinema (-41%) as they were ordered to close on the 23rd March. As usual Print recorded high declines, except national papers, however even Digital was down by 11.9%. In addition to Cinema, Covid-19 is likely to have most effect on Outdoor as people stay off the roads and airports are in lockdown. Auto, Retail & Travel (-33%) continued to decline compared to the same time last year. Whilst Domestic Banks (+35.2%) had a record March spend. Presumably, the Banks had allocated advertising budget for the Olympics which can now be used elsewhere.
When You Walk Through A StormHold your Head up highAnd don't be afraid of the dark
At the end of a stormThere's a golden skyAnd the sweet silver song of a lark
Walk on through the windWalk on through the rainThough your dreams be tossed and blown
Walk on walk onWith hope in your heartAnd you'll never walk alone
You'll never walk aloneWalk on walk onWith hope in your heartAnd you'll never walk alone
You'll never walk alone!!
Ironically, Covid-19 has inadvertently increased media consumption while at the same time substantially reducing the costs of entry.Working from home has caused a massive increase in internet usage, Television viewing and news consumption from all sources. From Feb’20 – Mar’20, Social media is estimated to have increased by 211%, News sites by 78% and TV viewing has increased X%.The media have been hit very hard as around 50% of advertisers have slashed and in many cases stopped advertising. All media have an oversupply of advertising availability and exceptional deals are being done across April – June’20.Naturally there are clients that have to cancel advertising as their business sector has been stopped or others that have simply sold out of stock. If you have the means, the stock and the financial ability to move your product and protect your brand, it’s a great time to be buying media.If you invest in the media, they will absolutely support you, especially now. If you thought it may be out of reach, think again. There will be light at the end of the tunnel and it’s a great time to prepare your business for post Covid-19
Although Breakfast & Drive sessions may be affected by such a large proportion not travelling to and from work, it is clear the digital side of Radio is booming. Spotify is also naturally up and unsurprisingly The Police’s “Don’t Stand So Close to Me” saw more than a 135% spike in streams in recent weeks. Radio tends to do well in times of crisis as people search for the latest up to date news. On the flip side of that there is also a thought that people are tired of hearing about Covid-19 and want a break from it with some music. The feedback from both FM & AM stations is that social engagement is at a record high as well as calls to the stations. This crisis has driven substantially more people to stream Radio across devices such as computer desktops, TVs, smart speakers, mobiles and gaming consoles. As a result, Podcasting is up 30% over the past month, TuneIn Radio is up 22% and google searches for Smooth or Nova are up 250%.Radio is usually done through printed diary system left at people’s houses. Covid-19 may change this forever (more online measurement) as well as changing listening habits to be more digital based. Interesting times ahead – stay tuned!
February has just been released and no surprises it was down around 5% compared to Feb’19. The last time the Australian ad market had any meaningful growth was August 2018 (+3.4%).
All media types were down with Digital & Television performing the “best” with under 2% reduction compared to February last year. Outdoor had it’s worth month since November 2016 and was down 17%. In terms of individual media, the Nine Network was a standout winner as it increased ad revenue by 30% in February.
The Banking and Food sectors increased spend while Auto, Retail and Travel were all down more than 15%. This is certain to get a lot worse in those categories as Covid-19 causes mayhem with advertising spend. From what we can see we estimate advertising spend will be down around 40-50% from April to June.
The fragmentation of
consumers’ media consumption over the last 20 or so years has made it more
difficult to reach the masses although has helped in terms of targeting
specific audiences. Perhaps fragmentation has been a curse to mass market
advertisers while possibly helping smaller niche targeting clients.
Stepping back into the mid-1990s Australians only had 5 TV stations (ABC, SBS,
7, 9 &10) to watch. No wonder the average audience of the top 10 programs
across the 5 capital cities was over two million per show. Then along came
PayTV (1995), the free to air digital stations, catch up TV, streaming,
Netflix, Stan and suddenly consumers can watch what they want, when they want
across a multitude of channels. Today’s highest rating TV show is lucky to get over
one million viewers.
Magazine’s readership is now fragmented across their print, App and web
editions. The mass women’s magazines printed versions have had a huge drop.
From 1999 to now, Womens Weekly (AWW) print readers went from 2.9 million per
issue down to 1.3 million per issue, Woman’s Day went from 2.6 million to
877,000 and New Idea went from 2.2 million to 785,000. Considering their total
audience including digital readers, AWW’s total readers are down 13% compared
to 1999, Woman’s Day total readers are 53% less than 20 years ago, and New Idea
is 50% less. In addition to this, the advertising is sold separately i.e. print
or digital. Again, massive fragmentation of the audience.
In the Newspaper glory days (circa 1997), they received over 50% of all
advertising spend while today they get a little over 4% of all spend. The
readership of the printed national papers (The Australian & the AFR) have
declined by 30-40% while the metropolitan papers print readership has declined
by over 60%. Naturally the papers do quite well with their digital copies
however total combined (print & digital) daily readership is still down by
around 25% compared to 20 years ago. Advertising is again sold separately as
print or digital which again fragments the audience for advertisers.
Radio listening has fragmented with the introduction of the numerous Digital
stations, Spotify and podcasts. Even Cinema have fragmented their audience as
there were a little over 1,000 screens in 1997 whilst today there are over
2,300 screens. Nonetheless ticket sales have remained relatively constant over
The one medium that has grown from zero consumption in 1995 to virtually
everyone today is the internet. Although the internet itself is massively
fragmented as it is all the traditional mediums plus over a billion websites
plus all the social sites. Australians spend up to 14 hours a week on social
media alone excluding time spent online with other media sites.
The combination of most of the media offering far more options and time now
spent online has resulted in the enormous audience fragmentation. This audience
fragmentation has also resulted in the ad dollars fragmenting causing a great
deal of pain across traditional media as Digital now accounts for around 30% of
ad revenue. In years gone by Saturday’s SMH attracted people interested in
News, Real Estate, cars and the “rivers of gold” classifieds. These days
realestate.com, carsales, eBay and Seek have taken much of that audience along
with the ad dollars.
From an advertiser’s point of view, it is clearly harder to reach lots of
people quickly making fragmentation a bit of a curse for mass market products.
On the positive side, data is today’s new currency used to spend clients’ money
more wisely and enables more micro targeting of audiences
Last Saturday, the Treasurer’s Office announced the ACCC will publish an
Ad-Tech Inquiry Issues paper in March 2020 – interesting times ahead!
in December 2017 the federal government directed the ACCC to analyse the
Digital Platforms in relation to consumers, journalism and advertising on those
platforms. By ‘platforms’ they basically meant Google and Facebook. The report
came out in June 2019 and we are now getting to the interesting phase of seeing
what can be done.
June 2019 the ACCC said they had serious issues relating to market power of
Google & Facebook affecting the media, advertisers, businesses and
particularly consumers. They were scathing of Facebook & Google as well as
the Digital advertising market. The ACCC had particular concerns that consumers
do not realise how much of their data is collected and what is done with it.
They also said the rise of Facebook & Google had caused significant harm to
the news and to journalism. They said “the use of data can exploit behavioural
biases and consumer vulnerabilities on a scale we’ve never seen before”
ACCC recommended a branch to be set up within the ACCC to ensure a great deal
more transparency and oversight of Google and Facebook. This branch will
investigate the serious scrutiny of the algorithms of Facebook & Google
which they believe is anti competitive or misleading behaviour. The ACCC also
made a point about the very opaque and unclear Digital advertising market. They
also want an inquiry into the AdTech systems so they can see who is making
money and at what level. The Government has set up new fines and the ACCC
literally said “they were anxious to use new fines in Australia that will
amount to many hundreds of millions of dollars”.
Social media is the
way for people, brands and groups to communicate and interact online. It has
been around for more than 15 years, but lately we have a seen a surge in both
the number and popularity of social media platforms such as TikTok, Lasso &
Social media got its name because users are able to engage with each other in
the form of user generated content, commentaries and many more functionalities
that platforms offer nowadays.
For businesses, a rise in social media brings both opportunity and
responsibility with the amount of data & accessibility that marketers have.
Social Media is an important pillar of Digital marketing and it helps brands
accomplish the following goals;
• Community building
& brand engagement :
o Making it easier for brands to talk and address their audiences
o Brands can now more easily announce new products and business developments to
o Promote events and increase both registrations and attendance
• Brand awareness
o Brands can now build awareness through social media with organic social and
o With social media it has become easier to discover a brand – through friends
recommendations, influencers and ads
• Websites traffic
o Increasing site traffic, driving leads and sales as a result of organic
social activity and ads.
Below are the top Social platforms in Australia by number of monthly Unique
Users (source Nielsen Dec 2019):
All the major social networks offer paid advertising options. Social media
advertising allows brands to reach a wider audience than those who are
following them. The advertising options are ever evolving on Social platforms
and they include demographics and detailed targeting options with variety ad
formats to reach your desired audience and achieve your brand goals.
traditionally the smallest ad spending month in Australia so the figures never
look that great. The interim January figures have just been released and it
looks like we are kicking off 2020 the same way we ended 2019 – a negative year
on year performance. The January figures are approximately 10% down compared to
January 2019. This excludes the Digital bookings although once the Digital
bookings are added we expect to still be in the negative.
The Automotive and Retail categories continue to be in the ‘Top Declines’ for
the month. Perhaps not surprising given the bushfires, Travel spend was also
down. All the media are down although the one spot of good news was Street
Furniture had a substantial increase from January 2019
1. A 30 sec TV ad in
the 2020 Super Bowl was around $5.6million USD 2. More than $500 billion a year is spent on advertising worldwide
3. 4 million Australians aged 14+ (19.1%) now use meal delivery services, up
from 1.98 million (9.8%) Interestingly ‘Food Delivery Services’ advertising has
grown 4 fold since 2016 to $42 mil in 2019
4. Only 12% of Australians expect 2020 to be better than 2019. This puts us
43rd of 47 countries … at least we’re more positive than Italy (11%), Jordan
(7%) and Lebanon (5%) – Roy Morgan