In the first of a new series of reports exploring the opportunities and challenges facing media owners in local markets, WARC takes a closer look at goings-on Down Under.
Australian media owner interviews
The forces re-shaping Australia’s advertising market in many ways mirror the global picture, with digital becoming ever-more fundamental to brands’ media plans and traditional media owners struggling to retain market share.
The country’s ‘great switch’ – the point at which online media ad investment overtook spend on offline channels – occurred in 2018, and digital platforms are absorbing almost all growth in the sector.
According to WARC Data forecasts, internet ad spend will grow 5.6% to A$10.3bn; in contrast, spend on newspaper advertising will drop a further 11.7% to A$919.7m, dipping below the A$1bn threshold for the first time. The outlook is more promising for OOH (up 7.2% to A$1.2bn) and radio up (1.6% to A$1.3bn).
Interviews with four local media owners – Nine, Australian Radio Network, Verizon Media and oOh!media – underscore this state of flux in the Australian market. Several key themes emerge:
1. A temptation to diversify
For some media owners, the response to the rise of the global digital ecosystems has been an expanded portfolio and the avoidance of dependence on any one particular channel.
Take Nine: following a recent bout of M&A activity, including its merger with Fairfax Media, the company’s operations now span TV, radio, VOD, print and digital – and include content brands such as The Sydney Morning Herald and The Age.
“The pace of change in the media market remains unabated and Nine is determined to ensure that we are at the forefront of the future landscape in Australia. The fragmentation of traditional media has been occurring for some time and there is more competition for audiences, and more competition for revenues,” Nine writes.
While Verizon Media explores new content platforms including live events and e-commerce, Australian Radio Network (ARN) is branching out from pure-play radio into digital audio and podcasts through its partnership with iHeartRadio.
2. Proving channel ROI
The need to prove effectiveness, and therefore justify ad spend, is paramount among Australia’s media owners. For ARN, that means emphasising the ability of audio advertising to deliver longer-term outcomes for brands.
“Radio is often thought of primarily for its capabilities in driving a short-term performance result. This is why when we look at our top advertising categories, they typically skew to those that operate with a recency strategy along the path to purchase – so automotive, retail and finance.
“However, there is a lot of evidence to demonstrate that radio and, more recently, audio can play a valuable role in longer term brand building, particularly for those who have invested in their audio brand.”
3. Responding to consumer concerns around data privacy
As European and US marketers grapple with the implications of data privacy regulation such as GDPR and CCPA, so too must Australia’s advertisers amend their approach to managing and processing customer data, particularly in the wake of a much-publicised inquiry by the Australian Competition and Consumer Commission.
“There’s an environment of mistrust when it comes to data, with a consumer awakening in the last few years to how data is being collected, stored and used,” Verizon Media writes. “As a result, marketers are doubling down on how they understand and invest in direct data-driven relationships with their customers: first-party data.”
Nevertheless, all four media owners interviewed by WARC emphasised the growing importance of data insights to delivering campaigns for clients. ARN highlighted the recent integration of Adobe’s DMP (data management platform), and its subsequent ability to gain insights from cross-platform listening data.
Outdoor ad firm oOh!media, meanwhile, argued that its greatest “secret weapon” is its ability to deliver “unparalleled insight” into the buying behaviour and movement patterns of Australians at scale via its ‘Smart Reach’ tool.
“Our data partners and data scientists have combined trillions of data points – including 2.5 billion banking and purchase transactions annually, and more than three billion geo-signals from mobile devices – to tell a powerful story of who Australians are based on what they buy, where they go and where they spend time, in addition to where they live,” writes oOh!media.
4. Cross-industry collaboration
A focus on short-term results among Australian clients is proving to be a major concern across the ad industry.
In an effort to combat this mentality, a collation of media owners – including ARN, Nine and oOh!media, as well as Foxtel, JCDecaux, News Corp Australia and others – launched the Advertise or Die campaign in December 2019.
The campaign, which rolled out across outdoor, radio, premium digital, print and TV channels, highlights the role advertising plays in delivering long-term sustainable growth through a series of witty, tongue-in-cheek, channel-specific executions.
Nine predicts that “proven media” will continue to work together for the benefit of the industry, and that campaigns will become “more usual” as media owners “stand united to create much needed change”.
Given the challenging economic conditions forecasted for the year ahead, Australia’s media owners remain hyper-aware of the pressure to not only prove their value, but also evolve advertising offerings at a much faster pace to meet the needs of modern marketing ambitions.
The months ahead could be a golden opportunity to redefine relationships and the role their channel plays in advertisers’ media plans.