The decision by Bauer to move local chief executive Paul Dykzeul and commercial director Paul Gardiner to Australia sees two of the most influential figures in the local magazine industry depart.
The pair has been shifted to the much larger Australian market to steady the ship after a tough period, which included the departure of former CEO Nick Chan and a $4.5 million lawsuit won by actor Rebel Wilson in September.
In contrast, the New Zealand side of the business has been relatively stable, with Dykzeul and Gardiner running a stable shop despite the continued long-term decline in magazine advertising revenue.
As Gardiner sits down for his final chat with StopPress before heading abroad, it seems almost a little unfair that Australia has managed to pinch two key figures from the local market. So the first question has to be: should the market here be concerned about the loss of local talent?
Gardiner immediately shakes his head and before explaining that the business has a strong leadership structure in place without him and Dykzeul at the helm.
"We have Brendon Hill who’s going to be managing director, who’s been here for over two years. We've got Tanya Walshe who’s also stepped up and then you’ve got Kaylene Hurley who’s been in the business for seven years. What we’ve done is set a really strong platform for the next phase on the back of Paul and myself leaving," he says.
Asked about the struggles in Australia versus those in New Zealand, Gardiner stops short of comparing the fortune of the business on either side of the Tasman directly, pointing out that Australian industry faces challenges not quite as pronounced in New Zealand.
“Bauer has performed reasonably well in the Australian market, but the issue with magazines in the Australian industry plays out at a category level,” he says.
“Magazines, as a category, in Australia underperform versus every other market in the world. They have a lower share of advertising than most other markets in the world.”
Having not quite yet reached Australian-level self-confidence, Gardiner admits: “I actually don’t know why that is, so a big part of my job will be to find out.”
The massive divide between the local and Australian magazine categories was apparent when SMI released its ad spend figures for both markets earlier this year.
While the Australian magazine market dropped by 16 percent (AU$ 29 million) year-on-year for the 2016/2017 financial year, the local market remained stable with a 0.2 percent ($64,000) increase in spend.
At the release of the results, SMI chief executive Jane Schulze credited the strength of the New Zealand market to the work done by local media owners in convincing advertisers that magazines remain a compelling medium by which to reach consumers.
“The local owners have done an amazing job of holding the line,” she told StopPress at the time.
When perception becomes reality
Holding that line over the last few years has meant defending the industry against the sentiment that magazines are a dying medium, an argument often premised on declining circulation figures.
To its credit, the broader magazine industry has responded to this challenge by investing more in digital initiatives, revamping the Magazine Media Awards to include a wider array of categories across disciplines and launching of the Magazine 360 tool, which gives a total view of how magazine brands are tracking across channels.
All this may help to shift the misconceptions of those already working in the industry, but Gardiner is more concerned about those who arrive with these perceptions already firmly embedded in their personal habits.
“One of the biggest fears that I have is the digital native, coming up through an agency, who has never read a magazine or has never watched a free-to-air TV show,” he says.
“As a category what are we doing with those guys? What are we doing to give them a sense of understanding around our category? How can you be expected to put our medium down as a recommendation on the schedule if you’ve never consumed it?”
Gardiner’s point is that media agency neutrality is difficult to achieve when those making placement decisions have unconscious biases informed by their personal media habits, which in turn might not be consistent with what a client’s target market might consume. To counter this problem, Bauer runs agency induction days, during which they invite agency interns into the business to give them a sense of how everything works.
“We try to get in early, at the beginning of the media planner cycle,” Gardiner says.
“We get them to pull together a magazine, we take them on a photoshoot for their own front cover and we just try to immerse them into our business.”
While there’ll always be work in convincing the magazine sceptics of the continued relevance of magazines, Gardiner says he has seen the pendulum swing more recently.
“I do think advertisers are realising that they’ve almost gone too far the other way,” he says in reference to mad rush to digital.
He puts this down to research from the likes of Peter Field and Mark Ritson showing that digital advertising isn’t always as effective as a more balanced media mix.
“There’s no correlation between time spent and ad impact. You’ve seen this massive increase in time spent, but you haven’t seen the same with ad impact. Just because you’re in the same proximity of an ad impression or a media message doesn’t mean you saw it. Engagement is still the holy grail and that’s the game we play. We play at the quality end. That’s our message to the market.”
A self-fulfilled prophecy
Although there are promising signs in a resurgent faith in print media, Gardiner doesn’t shy away from acknowledging that the channel’s scale—in print at least—is still steadily declining and he posits the blame for this squarely on the shoulders magazine owners and publishers.
“It’s a self-fulfilled prophecy that magazines are going to continue to decline by three to four percent every year,” he says.
“We’ve kind of accepted that, and in a way, it’s our own fault.”
He argues magazine owners have also bought into the perception that New Zealanders are becoming less inclined to pore through the pages of a magazine from time to time.
“We tend to think magazines aren’t for the younger audiences coming through, but we actually haven’t created products that resonate with them.”
Gardiner continues, saying that creating new products that are simply a replication of what already exists in the market isn’t going to drive different results. Consumers will shun the product.
“You can’t expect 30-something-year-olds to start paying for magazines,” he says. “If you launch a magazine under the old model, the chances of success are limited. You’ve got to look at another way of doing it.”
The most obvious example of Bauer flipping the traditional model is the free weekly urban title Paperboy, launched 12 months ago to target younger city dwellers. The innovative thinking behind this product lay in the distribution model, which focused on minimising the effort it took for the target market to gain access to the magazine.
The magazine is dropped into letterboxes, at cafes and public transport depots, giving readers an instant curated experience in the places they frequent.
Less than a year in, the title has already won numerous accolades at the Magazine Media Awards and has quickly wedged its way into the public consciousness. But popularity doesn’t necessarily equate to financial sustainability, and Gardiner admits that relying on a single source of revenue can be tough in the mag industry.
“No one’s produced a product like this in the world. So, have we got it right? Editorially yes, but we need to tweak the commercial model a little bit… We’re tweaking the bin distribution and the letterbox distribution, so we’re constantly changing the product with a view to making it sustainable in the market.”
The product has also been licensed for distribution in Sydney and Melbourne, one-off editions have been released in Christchurch and Wellington and Bauer is now also poised to release one-off summer editions in the Coromandel and Tauranga.
Each of these moves is about testing the water and taking a few risks in a bid to see how far the product can go. And while some of these experiments might not work, Gardiner believes it’s always better to try something and move on if it’s not working.
“Traditionally, in the magazine market, new products wouldn’t clean their face until two to three years after launch, but this is the new world. Now, they have to wipe their face right away.”
Given the uncertainty across the industry at the moment, Gardiner says there’s also an element of fear-induced inertia that sometimes precludes publishers from trying something new.
“Whenever we launch something, the challenge is always going to be that we might eat into the existing portfolio,” he says.
When combined with the ever-present possibility of failure, this issue might make a publisher reticent to invest in a new product or some other ambitious idea.
Although there’s no way to remove the risk entirely, and Gardiner says that extensive market research can help to at least provide an indication of whether an idea has the potential to deliver new revenue to the business.
Without the backing of the insights team, Gardiner says it would’ve been easy for ideas such as Nadia and Paperboy to be shut down. It wouldn’t have been far-fetched for someone on the team to argue that Nadia would eat into Woman’s Day or that nobody in the target demographic would want to read Paperboy. These would both be compelling arguments if the conversations were only based on hunch or perception, but Gardiner says the research behind each idea gave the team the confidence to flick the switch.
“With the launches, we’ve had over the last 12 months, 90 percent of the ad revenue we’ve gained has been new money and it hasn’t affected our readership numbers with our existing base—which is exactly what we wanted,” Gardiner says.
To some degree, Gardiner is also applying his ‘give it a go’ approach to his own career, leaving his comfort zone to take on a high-pressure role in a much bigger, more competitive market.
“I’m very lucky to have a network of support and collegiality around Bauer in this market,” he says.
“I’ve grown up in this market, and all my colleagues are now running the agencies. I’m really lucky enough to call a lot of them my friends and that’s what I’ll miss at a senior level here. It’s taken a long time to build. That’s a challenge in Australia. Entering a bigger market and redeveloping those relationships, which doesn’t happen overnight.”
Having done a bit of the work in the Australian marketers over the years and with Dykzeul already settled in, Gardiner won't be entering the Outback as a solitary fresh-faced Kiwi but the pressure will be on to deliver results quickly.
"There’s a category job there to be done in Australia. If we can grow the category, then Bauer will do well."
And if he succeeds in doing that, then who knows? He way very well end up on a flight to Hamburg in a few years.