Pearman Pulse - September 2019
TELL HIM HE’S STREAMING!
It
could be argued Television viewing has changed even faster in the last 6 years
than ever before. The very definition of what it is to watch TV has been
challenged by the introduction of the streaming services which have now well
and truly infiltrated mainstream culture. The average user is consuming
approximately 10 hours of ‘streaming’ TV a week.
Watching Television via the internet on TV screens, phone apps, computers and
tablets has grown enormously in Australia as bandwidth has expanded and data
prices have come down. It began with the Government stations introducing
streaming catch up services for ABC iView in 2008 and SBS On Demand in 2011.
Network 10 introduced their catch up in 2013 (10 Play) and followed by 9Now and
7Plus a couple of years later. The giants of streaming TV, Netflix and
Stan, started in Australia in 2015 while Amazon Prime Video arrived in 2016.
In terms of paid streaming, Roy Morgan estimates around 55% of Aussies have
streaming services otherwise known as subscription video on demand
(SVOD).
Although paid streaming is increasing its footprint in the TV landscape,
Traditional TV still accounts for 46% of viewing while SVOD accounts for around
35%. The bad news for Traditional TV is SVOD viewing is growing and making it
harder to reach substantial audiences. This is also bad for advertisers as SVOD
is yet to carry advertising however the subscription model of revenue has
proven a struggle in what is a seriously competitive market. Netflix’s
debt continues to grow and at Jun’19 was around $24 billion (USD). We’ll say
that again, $24 billion!! They paid approximately $420 million in interest
alone in 2018. Without a continued increase in subscribers they could run
out of cash suggesting they may be forced at some point to incorporate
advertising onto their platform.
Foxtel joined the streaming revolution back in 2013 with the launch of Foxtel
Now which has now just been moved to the Foxtel Go app. As Foxtel
continues the battle against soaring sports broadcasting rights and pressure on
subscriber numbers they have also recently launched Kayo Sport as their
streaming sports platform. Since its introduction in November 2018, the
number of Kayo users has continued to grow with the latest figures revealing
331,000 subscribers nationally.
While Kayo seems to have sports streaming in Australia covered for now, regular
drama streaming is set for a big shake up. Apple TV+ is launching in
Australia on the 1st November at $7.99 per month and will be giving
buyers of an iPhone, iPad or Mac a free year of streaming. Apple is
reportedly prepared to spend billions of dollars to establish itself in the
market. Then there is the might of Disney that is coming to our shores on
the 19th November with the launch of Disney+ and its enormous amount
of in demand content.
Although these new entrants will continue to fragment TV audiences, streaming
could be highly beneficial to commercial TV with its ability to collect a great
deal more audience data and possibly deliver similar benefits to online advertising.
If all this choice is confusing and you’re desperate to find out the value of
Jousting Sticks we suggest you subscribe to Amazon Prime Video as they have The
Castle.
WHAT'S NEW IN THE MEDIA - FOXTEL
Foxtel
is probably under the most pressure today since their launch in Australia back
in 1995. The enormous competition from the streaming entrants for both
content and lower costs is clearly ramping up. They also lost the contract to
sell Network Ten advertising which they have had since 2015. CBS (Ch10’s
owner) wants to control their revenue and has therefore brought advertising
sales in house.
This may not be such a bad thing as previously Foxtel had a great deal of
trouble selling both Foxtel and Ten particularly given they were operating off
two different sales platforms. This allows Foxtel to concentrate on their own
product and in fact recently they’ve introduced two new sales
initiatives. We can now buy a 6 second ad as part of a “Q Break” on
Foxtel. The Q Break has a 3 sec intro (informing there is a quick ad
break coming), then two six-second ads at the end or start of a program. They
also introduced an “M Break” which is a one minute ad break with only two
advertisers.
Foxtel’s latest announcement is they are closing down their Digital Foxtel Now
platform and hoping to move people over to the Foxtel Go app.
DIGITAL UPDATE
DIGITAL PROGRAMMATIC – BEGINNERS
GUIDE
Programmatic
Digital buying is a buying method that requires a highly sophisticated software
system to manage booking activity on numerous sites, serving the creative to
multiple locations and then paying each site based on its delivery. No
media agency owns this complex software however they use companies that do,
which are known as ‘Demand Side Platforms’ (DSPs). The term ‘Trade Desk’
means the agency buys direct with a DSP which is usually a benefit for clients
as there are less companies adding a service fee.
One of the main benefits of Programmatic activity is the ad placement is
optimised based on a particular interaction such as click through, conversion
on your site, etc all while the campaign is running. Programmatic advertising
has been attractive as it is seen as accountable and usually at a lower cost
than going direct to a particular site.
Unfortunately, in the early days, Programmatic was somewhat abused as some
buyers loaded up the Programmatic rates 100-400% and even at that rate it still
seemed reasonable to clients as it was delivering an accountable outcome
(compared to the higher prices of direct buys). Those days seem to have
gone as clients woke up to what was happening and some of the larger clients
took it in-house. These days clients can expect to pay 18-30% on top of any
Programmatic cost. Within the cost there should also be some “insurance”
costs built in to ensure the ads are viewable and verified (to prevent brand
risk or ad fraud).
SMI suggests digital programmatic spend is around 30% of all Digital
advertising. Programmatic ads can be either Display, Native, Audio or
Video. Interestingly, the Domain website now only accepts Display
advertising if it is booked Programmatically.
SMI UPDATE
The
interim August results are again showing a depressed advertising market. The
August results are showing the market to be back -16.6% although late Digital
bookings should reduce that figure substantially. When Digital is
excluded from the mix the decline from the remaining media is a lesser 10.1%.
All major media are also again reporting lower ad spend so far this month, with
Outdoor back 15.4% after growing a whopping 22% in August last year.
At this early stage SMI is reporting growth from only eight of the 41 product
categories with very significant declines in ad spend seen for Domestic Banks
(so far back 28.9%), Gambling (back 29%) and Retail (-21%).
Over the calendar year the Agency market is back 6.4% from last year’s record
level of $4.6 billion, representing a fall of $298 million.
FAST FACTS
- From 2020 Newsagents will no longer be home delivering newspapers. News & Nine have organised their own distributors to do it
- According to IPSOS - Professions considered untrustworthy by Australians: Politicians (64%), Advertising Executives (55%), Bankers (52%) and Clergy/Priests (42%)
- Dogs vs Cats? 38.7% of Aussies own a dog, 23.6% own a cat
- We all get a free 7 day trial of Apple TV+ from 1st November
- Australia's longest-running newspaper is the Sydney Morning Herald, first published as the Sydney Herald in 1831
- The median income of the ASX 100 company bosses is $4.5 million a year … how do you get one of those jobs?
Pearman Pulse – August 2019
IS BRANDING MAKING A COMEBACK?
Since Pearman started in 1996 we’ve seen many changes in the
advertising world;
- 1996: the internet was a few years old and just starting to gain momentum
- 2000’s: media consumption began to rapidly fragment
- 2010’s: advertising became captivated with Digital
- 2013: ‘Data’ started becoming the next big thing
Over these 20 or so years there has been a substantial shift in annual advertising budgets from Brand (long term marketing) to a direct response focus (short term marketing). This is driven by a significant shortening of marketing reporting cycles even though business leaders know short term focus is bad for business.
It now seems as though ‘Branding’ is making a comeback based on the recent Sydney Adweek. The Financial Times presented their ‘Importance of Branding’ study having interviewed 500 readers in the C-suite & marketing fields. While Mark Ritson’s talk was answering the question, ‘what drives effective branding?’ He reviewed around 6,000 Effie awards (https://www.effie.org/) to determine an answer. In addition, we have been hearing from our overseas contacts that more clients are talking about ‘Branding’.
The Financial Times research found 83% of business leaders believe Brands continually deliver to the bottom line. However they also pointed out that only 27% of company boards had ‘brand health’ as a KPI. Perhaps one of the biggest issues threatening Brands today is the job tenure of CEOs, CMOs and ad agencies as it is substantially shorter than years gone by. This means each brand is being looked after by many more custodians and it doesn’t take too much to pull a brand off course if people with differing ideas get in control.
Both the Financial Times and Ritson suggested companies ideally should have campaigns with two distinct advertising objectives – short term & long term. The short term objective (eg. sales uplift) covers the direct response and helps to fund the long term objective of building the brand (thereby helping long term sales growth, reduced price sensitivity, emotional connection, etc).
The studies also reinforced a Brand’s creative message is pivotal to the effectiveness of marketing communications campaigns. A company with consistent strong creative generates and holds customers going far beyond the functional benefits of the product to the emotional triggers (think Old Spice, “I’m on a horse”).
A company’s Brand is clearly worth a great deal with the Financial Times’ study showing ‘brand’ contributes 25% of most company’s intangible assets. Interestingly, over 80% of the market value of the S&P 500 businesses is made up of intangible assets such as Brand, Goodwill, Patents & future earnings. As an example, Apple has an approximate market value of $900 billion, with tangible assets (property, plant, equipment, etc) being $100 billion and intangible being $800 billion. Even with Apple’s enormous annual profit of around $60 billion there is no doubt a huge amount of Apple’s value is in their Brand, not just their future sales.
The Financial Times study addresses what they see as the Board-brand rift and “how business leaders have stopped building brands”. It is an interesting read and ends with recommendations for general management. Please let us know if you want a copy and we can send you the complete research.
WHAT'S NEW IN THE MEDIA - OUTDOOR
JCDECAUX
JCDecaux are trying to stop the Outdoor industry from giving over inflated discounts of 80-90% off market rate. They have recently finalized a complete overhaul of their digital large format assets which they vow will change the way agencies buy billboards. Their “market rate” cost for each site has been slashed based on a subjective quality and value of the site. Each site has a more realistic market rate and as a result discounts will become much more modest (around 8-12%). They plan to re-educate the industry and encourage media buyers to review sites and rates based on a cost per minute and cost per thousand metrics as opposed to inflated discounts. Beyond this, they have also reduced share of voice ad rotation from 1 in 10 advertisers, to 1 in 6, which they believe with increase viewability and total contacts by +67%. They will also implement category exclusivity for each billboard. This new way of trading will take effect from September 2019.
DIGITAL UPDATE
TO POD OR NOT TO PODCAST
In the past 2 weeks we’ve dived head first into the world of Podcasting. Seminars, meetings and our Head of Digital (Lex) even appeared in a podcast as a guest speaker, albeit on his favourite subject, Basketball.
Podcasting was previously know as “audioblogging” and dates back to the 1980s. Podcasts generally last for around 20 minutes to an hour and can be listened to when you’re connected to the internet or downloaded and listened to later.
Advertising opportunities on Podcasts are generally;
15/30 second ads: These appear mostly either at the beginning or during the podcast
Generous Host Read: a 1-5 minute long endorsement of the advertiser's product or service where the podcaster will create a narrative around their affinity with the product. Usually accompanied by sponsorship of the podcast.
Host Read: a 30 second live read by the host.
Podcasts can be made by anyone with a passion and a microphone which means there is a massive long tail of podcasts with an average of 30-50 listeners. However the commercially viable podcasts have 50-80 thousand listeners a podcast. (Such as Mammamia's suite of podcasts).
Around 1.7million Australian’s downloaded Podcasts in the last 4 weeks and they were predominantly aged 25-44. The major benefit for Podcasts are their ability to target particular audiences based on their content. From an advertiser point of view we need to ask what impact that alignment can make and is the cost worthwhile. Based on a cost to reach 1,000 people, a 30 second ad on a Podcast can be approximately 20-50x more expensive than reaching them on Radio. Besides cost, the other barrier is we cannot control when the advertising will be heard. Measurement of people listening whilst connected online is simple but it is much harder when the podcast is downloaded and listened to at a later date.
Podcasts are very much an “environment” buy and can be helpful for branding as long as the price is not prohibitive.
SMI UPDATE
Any hope of an advertising recovery in May & June has been obliterated by the latest interim July’19 expenditure data released yesterday. Jul’19 spend is down a whopping -17% compared to Jul’18, excluding late Digital and other bookings.
Even once those late bookings are included we are possibly looking at a decline of ad spend in excess of 10% for the month. The last time Australia had a double digit monthly decline was 7 years ago in Aug’12 when it was -11%.
All media have suffered greatly in Jul’19. The ‘interim’ declines for Jul’19 vs Jul’18 are TV (-10.7%), Digital (-31.5%), Outdoor (-16.5%), Radio (-11.2%), Newspapers (-16.1%), Magazines (-31.5%). Cinema bucked the trend with a 47.7% increase in ad spend for the month of July.
FAST FACTS
- 6pm News (on Seven or Nine) continues to regularly be the highest rating program on TV each night
- Google Maps (AR) – now literally puts you in the street as you walk along https://www.youtube.com/watch?v=3u9dt_WhsLI&feature=youtu.be&t=14
- Fathers Day 1st September: Australia has 4.6mil Dads (2.5mil should get socks & jocks as they have kids U18 at home)
- Is home ownership more difficult now than it was for your parents? In 1976 home ownership was 68.4%, in 2016 it was 67.1% (Census data)
- SBS has 9.1% audience share vs 7,9 & 10 but for BVOD they punch massively above their weight with a 32.8% share.
https://www.ceodaretocure.org.au/my-fundraising/donate/20/dominic-pearman
Pearman Pulse – July 2019
How much should I spend on Digital Advertising?
This is a question often heard from clients. Although prior to the arrival of Digital we were never asked how much should be spent on a particular media such as Radio, Print, TV, etc. Ideally, the question should simply be “how much should I spend on advertising”? However, to answer the specific Digital question, we have looked at Digital as four distinct budgets – Search (SEM), Online Classifieds, Optimising a website (SEO) and a ‘Display’ budget.
SEM seems to be a mandatory for the majority of clients and is effectively today’s equivalent of the Yellow Pages. As SEM directly relates to a specific search (albeit product name or category interest), clients should establish the ‘cost per acquisition’ (CPA) they are prepared to pay and limit spend on SEM to that CPA. The budget effectively sets itself. Interestingly, in days gone by Yellow Pages ads were predominantly booked direct by clients and didn’t come out of the Ad agency budget. As a guide, SEM presently accounts for close to 40% of all Online Advertising*.
Online Classified advertising relates to very specific sales sites such as cars, property, jobs, etc. If you are a retailer in those industries then Online Classified advertising is probably again mandatory. It is also likely that it could take up the vast majority of those clients’ budgets. Within the total Digital advertising spend, Online Classifieds makes up around 19%*.
SEO is a cost that arguably could be classified as part of the ‘Communications’ budget on a P&L as opposed to coming out of an advertising budget. Adjusting / optimising a website to rank higher naturally on Google searches seems more related to ‘communication to clients’ than brand building. The objective of SEO is to influence Google’s algorithms and open a window to the company, not to build a brand.
Within ‘Display’ we’re including Static, Video and Paid Social. The question of how much to spend on Display naturally changes from client to client. Some clients spend 100% of their budget on digital although they tend to be smaller clients with smaller advertising budgets. Looking at SMI Data** the Display activity for clients is sitting at around 20% of all advertising spend. This figure has grown at around 2% share each year for the last 10 years. For most clients with an ad budget greater than $500,000 it seems that 15-20% is the norm for Display. It must be stressed this is simply an average not a recommendation. The Industries** spending the highest proportion of their budgets in Display are Banking (around 30%+) and Insurance, Travel & Automotive who each spend approx. 25%.
Display Digital is just another media channel and should be treated on its merits like any other in terms of what it can arguably contribute for a client. Every medium needs to be measured and made accountable for what it does for a Brand, whether that’s lifting awareness and brand recognition, generating leads, increasing foot traffic, making sales or whatever the marketing strategy calls for. Unfortunately Online & Offline advertising is often sectioned off and looked after by different people or companies. It is no surprise that each person or company will most likely recommend a higher proportion of spend in the medium they know best. The best media plans will always be achieved from a holistic and unbiased overview of each and every media.
*Source: IAB Australia March 2019
**SMI: sourced from the major media buying agencies in Australia
WHAT’S NEW IN THE MEDIA – TELEVISION
Network 10
According to Rod Prosser (TEN’s Chief Sales Officer) – CBS are looking to use Australia as a “test bed” for new formats. We are being told programming will be more cohesive and should (famous last words) improve overall performance in terms of consistency and ratings.
New local content – My Life is Murder, One Born Every Minute, Sydney’s Crazy Rich Asians, The Amazing Race.
New overseas – Beecham House and Masked Singer.
Returning – Bachelor, Bachelorette, Survivor, Playing For Keeps, Trial By Kyle, Gogglebox, Pilot Week testing
Just on air now – Body Hack, Five Bedrooms, Taboo, & Kinnie.
Clearly TEN are maintaining their return to the under 50s target, something they did well for many years over a decade ago.
Now they need to deliver on programming, on audience and ultimately for the Network on revenue. We will be keeping a keen eye on the second half of 2019 to see what happens.
DIGITAL UPDATE
It’s School Holidays, but where are the kids?
So it’s school holidays, and chances are instead of your kids being outside jumping in puddles, they are on their phones using their favourite app ‘Tik Tok’, the App formerly known as Musically. Essentially it is a video sharing app (user generated like YouTube used to be), where kids tape themselves being silly or generally showing off (often set to music) and broadcast it to their friends or to the world at large. If the consumer enjoys the content they can like, comment or befriend the user. Or they can swipe up and see how the next kid will entertain them.
The latest forecasts for Asia Pacific by market research group Forrester shows the popularity of TikTok is spreading with more than 700 million monthly active users globally. There are already 200 Million users alone in India (compared to 300 Million on Facebook). The app is currently available in 150 markets, in 75 languages, and has been ramping up its presence in Australia.
Other short-form video apps such as Vine have shut despite their popularity due to their failure to find a revenue stream. However TikTok managed to monetise it’s offering within one year of its launch through a variety of revenue models like in-app purchase of coins and virtual gifts, but advertising accounts for most of its revenue. Brands are increasingly collaborating with TikTok to reach younger consumers in Asia
Nielsen states that the platforms active users in Australia are at 67,000 in April. The App’s search volume* grows significantly during the school holidays, and although the minimum age is 13, the age gateway doesn’t require proof, so even your young kids (7-12yo) just need to download and sign-in to get on-board.
Like every new emerging platform, advertisers can engage with these audiences, by creating native ads and target audiences within the platform itself (self-service). Needless to say your ad (preferably video ad) needs to be entertaining enough so these Gen Z audiences don’t swipe up (ignore your advertisement and continue with their digital lives)
SMI UPDATE
The June’19 SMI figures are ‘hot off the press’ and enable us to compare FY19 to FY18. However, late Digital bookings still need to be added so the FY19 figures are somewhat under reported. FY19 also does not include Federal Government spend whilst FY18 does.
From Sep17-Aug18 SMI showed 12 consecutive months of increased advertising spend. On the other hand, the Oct18-Apr19 months were not kind to most media with declining advertising spend at around -5.5% per month. The good news is the May & June months seem to indicate some improvement in advertising spend.
Overall, if we assume $50mil of late Digital bookings and allow for past Federal Government spend, it is reasonable to say the FY19 total spend looks to be at least the same as FY18. In other words, the yearly advertising spend is relatively static – not decreasing or increasing to any degree.
One surprise in the figures is Outdoor has had a poor Jan-Jun19 period being down -1.5% for the six months. The Outdoor medium has grown for 9 consecutive years and still has the highest increase (+4.1%) of all media for FY19 but this is Outdoor’s lowest increase since FY14.
FAST FACTS
- 2GB is the No1. Station in Sydney at 14% share, however Smooth has 1,051,000 weekly listeners in the last week with 2GB having 677,000
- Magazines are still launching! Pac Mags launch “New Idea ROYALS” this month after Bauer launched “It’s Your Day” in June. Universal have also launched “Well Being Wild” and “Being”.
- New Large Format Digital posters are being erected outside Westfield Shopping centres managed by JCDecaux
- Ninja Warrior is holding it’s audience after a strong Monday night of just under 1.3M Nationally
- The US Federal Trade Commission has voted to fine Facebook around $US5 billion ($7.1 billion) over violations of previous commitments to protect user privacy
- Ebay.com.au is the top shopping website with 68,200,000 monthly visits and a high pages per view of 9.8.
Pearman Pulse - June 2019
AUSSIE, AUSSIE, AUSSIE, cOIn, cOIn, cOIn !!
It’s no secret that Free to Air (FTA) broadcasters lose money on televising sport. Australian sporting bodies have continued to balloon the costs they charge the Television Networks for the rights to air them, reaching a level that has now perhaps become unsustainable.
The AFL signed a $418 million per season deal from 2017–2022 with Seven & Foxtel, which marked an increase of 80% on their previous broadcasting deal. Seven also paid a whopping 80% increase for the rights to air the Cricket compared to the previous Nine deal. While Channel Nine’s latest contract with the NRL has seen a 70% increase on the previous arrangement and their Tennis deal was up 50% on what Seven previously paid.
The networks have shown a willingness to pay top dollar for sports rights as they provide a platform to cross promote their upcoming programs to a large audience. Sport also delivers high and consistent ratings that few other programs can guarantee and are believed to deliver a ratings ‘halo’ effect. One such event that consistently draws massive audiences is Nine’s State of Origin. Rugby League’s annual State against State rivalry has upheld audiences reminiscent of prime time television thirty years ago. Last year, Origin Game One was the highest rating program of the year with a national audience of 3.45 million. The first Origin game this year had a national audience of 3.2 million.
All these sports rights for the FTA networks have been possible due to the Government’s anti-siphoning laws prohibiting Foxtel from certain sports unless the FTA networks have the right to televise the events. However, it seems unclear if these laws affect the major Telco’s and Internet giants such as Amazon, Facebook, Apple, Twitter and Netflix. These companies pose a real threat to the FTA networks as they have tenfold the profit and can easily outbid them. This was evident when Optus outbid Fox Sports to secure the English Premier League for $60 million per season in 2016.
This threat is also apparent looking overseas as Amazon Prime outbid Sky Sports in the UK to secure the ATP Tennis broadcast rights and has now secured a small portion of the English Premier League with 20 matches per season. Australians love to watch their sport although it may become more costly for all of us in future years.
WHAT’S NEW IN THE MEDIA – OUTDOOR
MOVE invests $1.3m into the first phase of its digital measurement project
In 2010, MOVE revolutionised out of home audience measurement in Australia – at last we were able to tell advertisers a reach & frequency on their outdoor media plans and deliver some accountability to them.
Most recently, MOVE have now announced a further $1.3 million investment through a neuroscience project assessing audience engagement with digital and traditional out of home across formats, environments and travel modes. This will look at the increased impact and engagement of Digital out of home formats in a hope to further drive accountability of the Outdoor media
DIGITAL UPDATE
Apple driving user experience …. at the expense of Advertisers
At Apple’s 2019 Worldwide Developers Conference, they announced the launch of their own ‘single-sign-on’ function. This function is already being used by Google and Facebook allowing users to register to new apps by simply signing into their existing Google/Facebook accounts. Whilst this is a convenient solution for users, it also allows Google and Facebook to extract data and track users across multiple apps.
So what is the core difference of Apple’s single-sign-on scheme? Instead of collecting and sharing users’ data to developers and advertisers, Apple adheres to their Privacy Policy. They will protect and safeguard their data and utilise it to create a seamless user experience across all Apple products (iPhone, Safari, Apple Music and Apple TV). Hence, as Apple allows users to utilise their Apple IDs through their single-sign-on solution, they are muscling out Google and Facebook.
With Apple’s integration of authentication offerings through Face ID and Touch ID, it’s only a matter of time before the 8.6 million Australian iPhone users move to their single-sign-on function. Moreover, Apple intends to restrict data for advertisers by hiding user’s email addresses from third parties. Ultimately, making these iPhone users harder to reach through their emails.
This is not the first time Apple has attempted to knock out advertisers but is part of a broader privacy push in the past few years. In September 2017, Apple introduced Intelligent Tracking Prevention (ITP) on Safari internet browsers. The ITP blocks third parties from collecting information on users across the internet and has led to hundreds of millions of dollars lost for advertising firms.
Advertisers should stay on top of these privacy updates and the possible impacts it will have on their ability to communicate with potential customers. It has never been more vital for advertisers to continue to experiment in creative ways to produce useful, meaningful, and contextually relevant advertising messages.
SMI UPDATE
The April’19 SMI data makes it seven consecutive months of negative ad revenue and is down 10.3% compared to April’18. However it is important to acknowledge April’18 was an unusually good month due to the Financial Services Royal Commission and Commonwealth Games. On the other hand, April’19 did have an extended Easter period as well as election advertising.
The only two media to increase ad revenue this month were Newspapers and Radio. The increase in Newspapers (albeit small at 0.8%) is solely due to the Political Parties, Industry Associations and Unions category. While Radio (up 5.4%) can also thank the election for a decent month. Interestingly, comparing the Political Categories Media from 2016 to now, the mix shifted away from TV (down 16%) and into Radio (16.9%+), Digital (9.8%+) and Press (a strong 79% increase).
FAST FACTS
- Aladdin ($5.74M in the past week, $15.71M total in just 2 weeks) survives Godzilla ($2.65M) & Rocketman ($4.52M) to remain No.1
- Seven is again the #1 network in combined Channel Share in the current survey year-to-date.
- 2GB’s Alan Jones has proved he was worth the $8M for 2 years after dominating the Sydney market with 17.6% breakfast share, with ARN’s Kyle & Jackie O trailing behind on 11.8%. In Melbourne, Macquarie Media (3AW) also took out the top overall spot, with Smoothfm back in second place.
- iTunes will be officially replaced by Apple Music as part of the next MacOS update, which also includes Apple Podcasts and the Apple TV app.
- In terms of the highest number of monthly active users, Facebook dominates the market with Facebook Messenger, Facebook, Instagram, and WhatsApp Messenger all being the top 4 mobile apps
- However, the top ranking mobile app by revenue was Tinder followed by Neflix
Pearman Pulse - May 2019
Likely media winners & losers from Saturday’s election?
Looking through all the political parties’ policies there are no mentions of any media reforms for traditional / offline media. Not surprising as the major reforms on the traditional media were passed in October 2017. They included; • Abolition of the ‘75% audience reach’ rule which allowed commercial TV stations to reach more than 75% of the Australian population. • Abolition of the ‘2 out of 3 cross-media control’ rule allowing companies to now control multiple media (Radio, TV, Press) in the same geographic market. (Nine could now buy Fairfax) • Abolition of the TV & Radio ‘licence fees’ that they used to pay to the Government. This saved TV stations around $130m and Radio around $18 million Labor’s policy will benefit the ABC as it will reverse the freeze on government funding as well as providing an additional $15 million to support regional news and restore shortwave radio in the NT. This will deliver an additional $100 million over 3 years to the ABC compared to a Liberal government. Liberal’s policy states they “will hold social media companies and other technology companies to account”. This is predominantly to ensure social media (aka Facebook) removes abhorrent violent material expeditiously. They also have a ‘Consumer Privacy’ policy that will have amendments to the Privacy Act 1988 to ensure social media companies and online platforms do not misuse personal information they collect, particularly about children. This may possibly put further restrictions on any company collecting Data. Another Liberal policy is to “conduct a Senate Committee Inquiry into digital platforms, their role as publishers and the need for further regulation”. The Greens have Media & Communications principles predominantly around freedom and diversity of the press and access to independent media. Their aim is to have ‘regulation of the internet to be transparent, accountable and protective of privacy, freedom of speech and access to information’. It’s a reasonable bet to assume no matter who gets in, Facebook and Google will have greater scrutiny or restrictions on them in terms of data they collect and content they share. This may not be that concerning to them as we think issues around transparency, brand safety and tax liabilities are more likely to financially affect them. We also expect all websites may need to ask for permission to collect consumer data the way European websites are required to. FYI, interestingly the fine for not voting is $55.
WHAT'S NEW IN THE MEDIA - CINEMA
Avengers: Endgame had a historic opening week with the movie in its first week with $50.13M – easily sailing past Star Wars: The Force Awakens ($38.5M)
Endgame is now number 3 on the all-time Australian box office list after just 2 weeks bringing its total to $65.8M at the end of the weekend.
DIGITAL UPDATE
Amazon, The
sleeping giant of digital advertising in Australia
In July 2018, Amazon opened up its e-commerce service to include
the Australian Market, 10 months later we now have advertising representation
in Australia from Amazon.
The Unique Browsers (UB’s) on Amazon in March 2019 according to
Nielsen MediaView was 7.4 million which is getting closer to eBay who have
10 million UB’s.
The advantages of advertising on Amazon or eBay is that we can
target in-market intenders (via its product search capability), its scale, the
ability to target post transactional audiences as well as being able to
record a real time ROI.
As advertisers we welcome new digital players in the Australian digital landscape especially players like Amazon who bring innovation (such as Alexa) and more choice for targeting at scale (alongside the known big players of Google and Facebook). According to eMarketer, in 2018 Amazon became the third largest digital ad seller in the United States behind Facebook and Google while beating Microsoft and Yahoo. We expect they will continue to grow in Australia.
SMI UPDATE
March results for Ad spend continue the downward trend sine Q4 2018. We are now experiencing first quarter results for the market back 4.2% to
$1.52 billion with only Outdoor (+$958k) delivering any meaningful growth in this period.
The Media market is still stuck in a rut after the record high in the period of the year prior and also a fair amount of uncertainty with the impending election.
Obviously with the upcoming election, the strongest growth category in March was Political Parties/Associations/Unions (increase of $7.8m year-on-year to $12 million). The ‘Political’ spend will increase astronomically once April & May are included. Particularly when the United Australia Party’s estimated $50m+ is added.
FAST FACTS
- The Voice starts on Sunday (May 19) with Deltra Goodrem, Kelly Rowland, Boy George & Guy Sebastian – last year it was the 6th highest rating regular program
- Nine and News Corp close TV Channel Your Money
- Production has started this week on a new real-life medical series called Emergency, based on the doctors & nurses at the Royal Melbourne Hospital
- Lego Masters grand final delivered a metropolitan audience of 1.5 million
- 3.7% of Australians purchased groceries online in the last 4 weeks
- 28.6% of Australians have been to the cinemas in the last 4 weeks
- 1.7 million Australians accessed the Netflix app in the last 4 weeks
Pearman Pulse - April 2018
MAFS, MKR AND TV AUDIENCE PREDICTIONS
Quarter one has been big for TV…..
No one (not even Nine), could have predicted the success of the “most talked about social experiment” in TV reality history – Married At First Sight.
Gone are the days of people tuning in to watch contestants slave over technique & skill to fufill their dream of becoming a chef, or proclaimed DIY renovators shedding blood, sweat and tears in the hope of making a few bucks to fund their next reno. We are living in a time where Australians crave drama, romance and scandal.
In 2018, MAFS had an average metro viewership per episode of 1.3mil with the finale/reunion hitting 1.8mil metro viewers. To 2019, average audience has grown 7%, with the final reaching a whopping 1.986mil metro viewers. MAFS has bucked the trend of gradually declining TV audience due to fragmentation and the ever increasing ways to consume content. Nine are proclaiming that this is the best start they have had to a TV year in Nine history, with MAFS audiences spilling over into other programs as well.
But what did Nine predict? In Sydney for People 25-54, Nine predicted the finale episode (and selling spots to advertisers as) of MAFS delivering 7 tarps. With a 15 sec spot costing around $12K and a cost per tarp of around $1,700 (highly inefficient), advertisers avoided it waiting to see audience delivery.The actual delivery was 12 tarps, so Advertisers flocked to buy short terms MAFS spots.
Seven on the other hand overcooked audience predictions for MKR, & found themselves in a hot mess with average viewership down 25% so far (scheduled to wrap up after Easter). In it’s 10th Season, MKR is struggling to retain it’s long-standing loyalty losing a big chunk of viewers to the drama and scandal of MAFS. On further investigation, Seven had predicted this season to do as well as last year, tarping spots in Sydney around 7. In reality spots rated 4.5 tarps. An over promise and under delivery, a media buyers worst nightmare.
And what about Dancing with the Stars on 10? The Network predicted 5.2 tarps in Sydney against People 25-54, however as the season has progressed a gradual decline has followed averaging at 2.7 tarps per episode.
It is obvious that no network either by using a “forecast” model that incorporates Oztam TV ratings, programming tags and trending algorithms OR the traditional methods of “Same time Last Year” or “Last 4 weeks” audiences, there is never going to be an exact science to predict audience. A media buyers job is to make calculated decisions based on cost efficiency and the best investment of the advertising spend. No network can accurately predict what Australians will watch on TV, and until then we continue to balance the risks with the science, manage the Networks delivery and hold them accountable to what they promise to deliver.
WHAT'S NEW IN THE MEDIA - RADIO
Southern Cross Austereo are now the official re-seller of Sound Cloud as of April 1 – Sound Cloud is the world’s largest open audio platform (similar to Spotify, iHeart) and has on average of 2.5 million Australian users.
Sound Cloud has around 1 in 5 of their users paying for the platform, whereas Spotify have 2 in 3.
Compared to Spotify, ads are “non-skippable”. Sound Cloud was previously only sold programmatically.
DIGITAL UPDATE
Latest news within Apple TV+
As you have probably heard, Apple is finally launching their Video On Demand (VOD) Service Apple TV+ later this year.
Now with Apple, there are a few things to consider. Firstly, they are known as innovators (the late Steve Jobs made a career around this premise). Their company reputation alongside their price premium was built on this premise, so it’s very interesting that Apple is so late to the game in launching a VOD service
Apple TV is not an innovation of any kind. It is simply a copy, a clone. Apple may cast Hollywood Stars to promote the service, albeit a few are actually going into production for content for Apple TV. However Apple are so far behind in content play that it will take a few years and hundreds of billions of dollars to catch up and if so, even have a competitive offering. Netflix, Stan, Amazon & Google are already in the Australian market for paid VOD, not to mention the defunct Channel 7’s Presto. Australia has always been a market for duopoly and one challenger when it comes to long term business (think Coles/Woolworths and Aldi, or Telstra/Optus and Vodafone). So it will be hard pressed to see Apple TV+ become successful. The only advantage Apple has is consumers loyalty to the brand and a larger distribution platform via iPhone. Apple loyalists are a crew of disciples who still believe in the brand but have now delved into the technical side. Presumably though Apple’s unique operating system will be cast aside as that historically makes it very difficult for operating and interfacing on other systems with Apple powered devices. Time will tell if loyalty is enough to ensure Apple TV is a success.for advertisers.
SMI UPDATE
The Media Agency market suffered in February, recording its largest percentage decline in ad spend in almost ten years. Compared to the same (record) month last year, all major media reported lower ad spend as demand fell away.
TV is most affected by the Olympics inflation of same month last year, with its total down 11.7% (ex Government). Digital ad spend is down 7.4%, Outdoor 2.1% and Radio 2.4%.
The financial year ahead is looking a little subdued with the total spend back 1.2% at $4.56 billion with only the Digital (+2.6%), Outdoor (+6.7%) and Radio (+2.5%) recording gains.
FAST FACTS
- Married at First Sight Finale pulled in a whopping 1,986,000 Metro viewers
- The Split: Westpac & Mamamia collaborate on a new divorce podcast
- Today Show’s ratings have been in freefall since Karl left, there are rumours he is on the return
- Apple have gone into the finance space releasing a virtual credit card – more details to be released
- MAFS has the highest social interaction so far of 2019 – 6 million interactions across Facebook, Instagram & Twitter
- Apple are launching “Apple Arcade”, a subscription based model for Gamers. This will launch globally in the last quarter of 2019. There will be access to over 100+ games.
Pearman Pulse – March 2019
MEDIA MERGERS
In a world of fragmenting media consumption it is no surprise that Media Owners are looking at consolidation to protect their revenue and compete against the likes of Facebook and Google. But how will this affect advertisers? Not a lot, is the answer. Definitely in the short term although in the long term there is a case to say fewer competitors will deliver upward pressure on advertising rates. However this should be considered knowing it is a “buyer’s market” for advertisers and that the ACCC is keen to maintain healthy competition.
The buyer’s market has come about due to the enormous increase in media advertising inventory while the amount of advertising dollars in the market has only increased by low single digits at best. Advertisers now have so many more TV stations, digital channels, radio stations, outdoor sites & cinema screens to choose from. Given negotiation is all about supply & demand, the massive increase in supply and little movement in demand has naturally created the buyer’s market. In addition to this, most of the media are also delivering less audience which again allows for greater negotiations. Although there are areas in each media that could be considered a seller’s market, e.g. prime outdoor sites and high rating programs, the vast majority of available inventory favours the advertisers.
The latest outdoor mergers (oOh!/Adshel and JCDecaux/APN) add Street Furniture to each entity’s offerings. oOh! bought Adshel which is around a quarter of their size while JCDecaux took a huge jump gobbling up APN, around 125% bigger than themselves. The possible concern for advertisers is that JCDecaux has traditionally been reluctant to negotiate hard and could bring that attitude to the APN inventory. However, JCDecaux were able to do that as their CBD Street Furniture was short on supply and high in demand. With APN’s mammoth inventory we suspect the laws of supply and demand mean they face a new reality. For advertisers, before these mergers we had two companies to deal with if we wanted Street Furniture and after the merger we still have two companies to negotiate with for Street Furniture. JCDecaux will presumably be selling the benefit of its global data capabilities to advertisers.
The Nine and Fairfax merger again should not make much difference to advertisers. In terms of deals across multiple media (Digital, TV, Print, Radio) we do not see any additional benefits to advertisers. TV stations have consistently owned other media such as magazines, digital & outdoor companies and it has always been better for advertisers to negotiate with each individual medium. The benefits seem mostly for Nine as it becomes Australia’s largest media company, increases revenue, protects its share price and enables more cross selling to Fairfax clients.
The key to ensuring any future mergers do not adversely affect advertisers is the ACCC. This was evident in 2017 when they knocked back a proposed merger between oOh! and APN. The merger which would have combined the two largest providers of out-of-home advertising in Australia, creating a market leader with over 50 per cent of all out-of-home advertising, and an even higher share in some segments, such as roadside billboards. One of the major concerns for the ACCC was that the proposed merger would substantially lessen competition for advertisers.
WHAT’S NEW IN THE MEDIA – TELEVISION
There has been a lot of change in which Network owns the rights to air what in the sporting world. Here is a snapshot of where you can find the major codes.
DIGITAL UPDATE
YouTube – The Good, The Bad & The Ugly
The Good – Many advertisers choose to leverage the YouTube platform because of its ability to deliver video adverting to a tailored audience at scale, and at a competitive price.
The Bad – User generated content by nature has a certain element of risk. YouTube has historically seen advertisers pull out of the platform as their brands have shown ads before dubious content (Race Hate/Terrorist Groups etc.) Although YouTube has countered this with rules to ensure that advertisers do not show up before non-brand safe content, advertisers still need to calculate if the risk is worth the reward of getting your message delivered to the masses at a great price…
The Ugly – Recent articles published in Forbes and TechCrunch reference a very worrying flaw in YouTube’s current algorithm, that details how child predators easily gain access to, and target streams of innocent videos or vlogs of young children uploaded by themselves. Whilst the content is not sinister, the concern is the user comments left by predators and the nature of how they share this content, enables these predators to flourish on a mainstream global platform. Although your ad technically is not seen before dubious content, the content is tainted by the comments left below the video content.
Already, Coke, Coles and Commbank have pulled advertising from their platform. YouTube has quickly rectified this flaw – by removing comments on videos depicting children
SMI UPDATE
2019 has started with softer ad demand in Agency Bookings with a 12.2% decline for Jan/Feb’19 compared to Jan/Feb’18. This is the first year-on-year fall in advertising expenditure since 2013. The main reason for this seems to be a decline in spend by Government, Domestic Banks & Insurance.
For the Jul18-Feb’19 period, spend is down 2.4% across all media although Outdoor is the star performer having increased spend by 6.4%.
Digital is sitting at around -1.1% for the FYTD (with late bookings to come through from February) however for the first time it has started to see a decline in bookings which will be interesting to see if that continues for the full financial year.
For the FYTD, Newspapers have declined 7.9%, Television has seen a 5.4% decline, Magazines have the worst record at -18% and Cinema is down 16.9%.
FAST FACTS
- Take-up of subscription video on demand (SVOD) and pay-as-you-go services increased by 54 per cent, from 5.9 million to 9.1 million (paid and non-paid) at May 2018—Netflix is the most used service and accounts for 3.9 million subscribers.
- Nine reports small FTA growth for its live coverage of first NRL match – 1,183,000 (Storm vs Broncos)
- Google, YouTube and Facebook are the most visited websites in Australia in 2018. Australians are using the internet on average 5h 4min per day
- Voice search is taking off, as 1 in 4 internet users are using voice search or voice commands. This is set to disrupt the Search landscape, as instead of scrolling through search pages, people will only hear selection of one or two results
- Australians love Online video, with 87% watching some form of video online and 57% using the internet to stream television
