BotW: Crunchtime for SCA takeover; When the going gets tough for marketers; Seven-versus-everyone (Part 7); Foxtel flattens; Canberra wakes up to social media
Welcome to Best of the Week, mostly written on board QF1 out of Sydney and hastily filed during the Singapore stopover (apologies for any typos – it’s already time to reboard…) I’m headed for London, and Advertising Week Europe.
Today: The dash for marketing growth (at all costs?); more aggro between Nine and Seven West Media (but is Nine really the innocent victim?); The government opens another front on social media (why?); Tuesday shapes up as a key day for the ARN-SCA takeover (could it all end next week?); and News Corp’s tough numbers (how long until the restructure?).
Happy International Migratory Bird Day.
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Going for growth
If the 565 attendees of Thursday’s Australian Association of National Advertisers’ Reset conference had been playing a drinking game where they had to down a shot every time somebody said the word “growth” they’d still be drunk this morning.
Across the day, from the moment AANA CEO Josh Foulkes opened with the words “Let’s talk about the stuff that matters most to people in this room, growth”, the agenda was unapologetically focused on just one thing: Selling. More. Stuff.
In tougher economic times, marketers are getting back to basics. And if the AANA has read the mood of its members correctly, then fluffy stuff like diversity and sustainability is on the back burner for now. It’s all about growth. Growth, growth, growthity growth.
Last year’s AANA Reset event was a cavalcade of inspirational presentations and discussions from the feelier end of the marketing world. The Voice, Net Zero and business as a force for good were among the topics. There were plenty of moving moments, but delegates would have been forgiven for wondering whether it might have been nice to have a marketer or two more on stage discussing how to sell shit.
That’s also been the mood music from other quarters. Sir Martin Sorrell, boss of MediaMonks owner S4 Capital, called it last year: “Sustainability and diversity, unfortunately, given the economic pressures, given the lower GDP growth, higher inflation, higher interest rates, the priority for any CEO will be ‘where’s the beef, where’s the sales?’
“Like it or not, people are moving lower down the funnel, looking for performance measurement and return on sales. Diversity and sustainability, sadly, takes a little bit of a back seat. Sadly, because of economic pressures which are huge. There’s a disconnect between what CEO say and how companies are behaving.”
That certainly fed through to Reset which delivered a helluva course correction. If you weren’t a marketer with a story to tell about how to sell a big pile of stuff, you were not coming on stage.
Admittedly, diversity slipped into the conversation for Anheuser-Busch InBev’s Richard Oppy after he took the audience through some of his spectacular Cannes Lions greatest hits, including Budweiser’s recovery from its last minute Qatar World Cup ban.
But Oppy was less comfortable with an audience question about last year’s Bud Light backlash when it featured TikTok personality Dylan Mulvaney, a transgender woman, in its marketing. The lesson he told us that the brand learned: The audience wants brands to stay out of politics.
Carried away with purpose marketing
Being on the right side of history is all a little 2023.
That would have sounded sacrilegious if he’d uttered it on the previous year’s stage. Particularly accompanied with his observation: “Sometimes we get carried away with purpose marketing”.
Boost Juice founder Janine Allis was all for rugged individualism too. Don’t surround yourself by people defined by verbs such as “victim” was one of the rules for business she imparted. She did not appear to come from the “bring your whole self” to work school of thought. But avoiding losers and victims probably helps sell more stuff.
Not that the conference content choices made by the AANA is a criticism, by the way. I rather like the singular focus of CEO Josh Faulks. His priority as fighting for an industry being squeezed from multiple directions, including greater regulation.
The AANA’s job is to divine the mood of their members. If the reality of capitalist life in the C suite is this quarter’s numbers, not next decade’s average sea temperature, is what matters, then job done.
In 2024, marketers who want to get ahead will need to leave the saving the world stuff to somebody else.
Or that’s the message I took from it all, anyway.
Seven vs the world
It was another eventful week for Australia’s most challenged media company.
Thursday morning saw a couple of developments that on the face of it suggested the Seven West Media war-on-everyone continues under new boss Jeff Howard.
The AFR carried the news on its front page that it will no longer be printed by SWM’s Colourpress after the cost was abruptly doubled. In a market where most newspaper presses have closed, Perth will be the first metro market where the AFR will no longer be available as a newspaper. #Worldisfukt, as they say.
And on another page of that same edition came the news that Mildura – “an area roughly the size of Belgium”, as the AFR quaintly put it – looks likely to be the first market without a Network Ten signal. That’s because WIN and Seven West Media (yes, them again) pulled the plug on their loss making joint venture Mildura Digital Television, saying it will end next month.
For a company whose proprietor bankrolled the Ben Roberts-Smith defamation case against Nine and inserted itself into the Bruce Lehrman fight with Ten, Seven keeps finding itself in these wars with its rivals.
The AFR and Nine went big with the argument that the canning of the AFR in Perth represents an abuse of market power by Seven West Media. They even rolled out former ACCC boss Graeme Samuel who observed that the move “appeared to be a breach of section 46 of the Competition and Consumer Act, which says companies must not engage in conduct that has the purpose or effect of substantially lessening competition”.
And for good measure, the AFR also hinted that it thought Seven’s The West Australian had been lifting its exclusives once the AFR pages had been sent through for printing.
Nonetheless, Nine’s declaration of the death of the newspaper in Perth came as a surprise to Seven West Media, which had indeed asked for a (big) price rise and given notice of termination of the contract, but believed it was still in the midst of a commercial negotiation about better terms. SWM Media argued in yesterday morning’s edition of The West Australian, that it was a “low level commercial” discussion.
Nine says that it will not be complaining to the ACCC, for all the column inches it dedicated to the apparent abuse of power. So if it really was being extorted in a good faith negotiation, why not?
There’s posturing from both sides. Nine will complain loudly, while improving their bottom line. And Seven may have been surprised, but you can also bet it enjoyed turning the screw on Nine. Both The West and News Corp’s The Australian (also printed by Colourpress) may pick up a few Perth readers on the AFR’s print exit.
Even if SWM isn’t entirely the villain, the new battle suggests there’s no thawing in the festival of hate at a time when the TV industry’s best hope of survival is speaking with one voice.
Is the SCA takeover about to die of old age?
Next week is a significant one in the saga of ARN Media’s attempted takeover of Southern Cross Austereo.
On Tuesday, ARN holds its annual general meeting, and CEO Ciaran Davies will need to update his shareholders on the progress of the complicated bid.
Deals die with age, and this one is getting ancient.
To recap, the proposal saw ARN partner with Anchorage Capital Partners. If it happens, ARN would take SCA’s Triple M network and place it alongside its Kiis network, while ACP would end up owning SCA’s Hit Network and ARN’s Gold network, alongside the SCA regional TV licences. Both companies would jointly own a single audio streaming company.
The advertising market has gone backwards since ARN kicked things off all the way back in October.
In a less complicated merger, that might not change the calculations too much – both companies have taken similar hits so are still proportionally about the same size as each other. But this deal involves cash on top of SCA shareholders receiving ARN shares
The wild card is Anchorage. While radio is down, TV is off a cliff, and those regional TV licences are worth less with every passing month (as the Mildura situation has demonstrated).
Yet changing the terms of the offer is a non-starter. The board of Southern Cross Austereo only reluctantly accepted the improved indicative bid on behalf of shareholders; I can’t see a circumstance in which they’d accept a reduced offer.
Until now, all that the deal has cost Anchorage is time. There’s been no binding offer. Anchorage could simply walk away. They’d look like time-wasting chumps, and lose their credibility for the next move, but it would not cost them anything.
It’s time for Anchorage and ARN to put up or shut up.
Don’t be surprised if the deal dies on Tuesday,
Social media in the Canberra crosshairs
This week saw the latest development in what is becoming one of the media themes of the decade: the relationship between Australia and the social platforms.
On Friday, communications minister Michelle Rowland and treasury minister Stephen Jones announced the creation of a Joint Select Committee into social media.
That looks like an attempt to create some interparty consensus around what is going to be a battleground for many years.
It comes against a backdrop of the industry waiting on Jones’ decision on whether to designate Facebook after owner Meta decided not to renew its payments to publishers. The move would likely see Facebook remove Australian news from the platform altogether which would be calamitous for smaller publishers. Designating, or not designating both come at a cost for Jones and Rowland.
And the US decision to force the Chinese owners of TikTok to sell or be banned will also echo into Australia.
Creating such a committee is different to ones put together to look at a specific topic then disband. It will create deeper expertise among both politicians and their staffers. And it will a starting point of legislation that stands a better chance of getting crossparty support.
The scope of the committee – and there’s no indication yet of which pollies will be on it – also includes “the important role of Australian journalism, news and public interest media in countering mis and disinformation on digital platforms”.
I have a hunch that this single sentence in the previous paragraph contains the seeds of a rethink of how journalism might be publicly funded. That would be a huge development.
News Corp does it tough in video and news
News Corp published its quarterly financials on Thursday morning Australian time.
Foxtel, majority owned by News Corp, reach an unhappy milestone. It was the company’s least profitable quarter since Kim Williams turned it into a profit engine two decades ago.
EBITDA – earnings before interest, taxation, depreciation and amortisation – profits were US$66m for the quarter. It was also Foxtel’s worst quarter for revenue since the beginning of Covid.
And yet, what is impressive is how relatively well Foxtel has done at clinging on, even as streaming hollowed out its original broadcast model.
This quarter’s $455m revenue is down, but not off a cliff. That’s because it managed to pivot to streaming.
The problem though is that the content, particularly sport, is more expensive than ever while streaming customers pay less than the pay TV ones used to.
The other side of the pincer movement is that Foxtel’s total number of streaming subscribers appears to have peaked at around 3m across Kayo, Binge and Foxtel Now. It hasn’t declined yet, but it’s been stuck at or below the 3m streaming subs mark for five quarters now. It’s hard to see how Binge hangs on when Warner Bros Discovery finally, finally launches Max into the market in the coming months and takes away the HBO content.
The tough going for the business of news was also on display in the numbers.
The worst of News Corp’s financials were to be found in the very last lines of the 24 page report – News Corp Australia’s total revenues. Reported in US dollars, which made things look even worse because of fluctuating currency, total revenue was down from $749m a year ago to $693m this quarter.
Within that, advertising was down from $316m to $272m.
However, the investor call saw the questions from analysts more focused on the positives. News Corp has signed another global deal with Google. And real estate is booming (there were two call outs in the briefing for Aussie Damian Eales who seems to be impressing his bosses in his role as boss of Realtor.com).
And there were even more hints from global CEO Robert Thomson that the company is closing in on a restructure – presumably News Corp and Fox Corp coming back together in some way. I wonder whether the apparently imminent local restructure will be timed to coincide with a bigger global upheaval.
Across its global divisions, News Corp finished the quarter just about flat compared to 2023 – up $320m to $322m in profit. In this market, flat is a win.
Unmade Index finishes down
The Unmade Index finished the week on a down note, losing 1.5% to land at 537.9 points.
Ooh Media, down 4%, had the worst of it.
COTW: Fight for our forests
In each edition of BotW, our friends at Little Black Book Online highlight their Campaign of the Week
LBB’s APAC reporter Casey Martin writes:
This week’s Campaign of the Week comes from Photoplay for Greenpeace. The use of stop motion to create a simple to understand yet effective message of the troubles facing our country is brilliantly done.
The childish nature of the stop motion animation creates a sense of urgency to fix the problem before it becomes the problem of our future generations. The craft and creativity is wonderfully combined.
In Case You Missed it…
On Monday we looked at the growing pressure on Nine and its CEO Mike Sneesby:
On Tuesday, after Qantas settled its ACCC ghost flights prosecution, we examined a return to normality for airline marketing in a post for our paying members:
On Wednesday we asked why and how Australia’s big media decisions are now mostly being made offshore:
On Thursday we talked to the team behind fast growing local influencer tech play Fabulate:
Time to leave you to your Saturday.
Abe Udy and I will be back with an audio-led edition of Start the Week on Monday. Well, it’ll still be my Sunday night, but you know what I mean
If you have five minutes today, please do complete our survey on how AI is being used in the industry. Every answer helps us build a better picture.
And if you have half a day on May 28, come to HumAIn. We’ll be talking about it.
Have a great weekend
Toodlepip…
Tim Burrowes
Publisher – Unmade
tim@unmade.media
