Although the release of last week’s ad spend figures by the ASA served to confirm trends that have been obvious for quite some time, a general consensus among those in the industry is that the figures don’t give an accurate reflection of changes that are occurring in the industry.
As soon as the figures became available to the public, Alisa Higgins, the general manager of the Interactive Advertising Bureau of New Zealand (IABNZ), sent out a release in which she called out radio media partners for double-posting their results.
“Radio is including online ad spend into both the radio and interactive categories, but not explaining this in the notes section. [And this] makes me question where their growth is coming from,” said Higgins.
While The Radio Bureau's managing director Gill Stewart admits that there was some duplication, she rationalises it by alluding to radio's revenue figures.
"The $267 million reported revenue for radio in the latest ASA numbers accounts for both agency and direct and includes all aspects of radio revenue from on-air, on-street, online to mobile and social. The Radio Bureau’s revenue accounted for just over 26 percent of the total radio industry turnover last year, which was considerably higher in terms of growth at 16 percent; this reflects radio’s relevance in the multiple platform space where we’re seeing significant growth from customised branded content and digital solutions as agencies and advertisers increasingly appreciate radio’s role in the innovation, activation and experiential space."
And radio isn’t alone, as it is also thought that certain magazine publishers conflated their interactive and magazine ad-spend figures under the magazine category.
ASA chair Hilary Souter was questioned in regard to how this could’ve been allowed, but she says the ASA’s role in the process is restricted to serving as a trusted platform for sharing the results.
“We are a collection agent," she says. “The numbers are generated by the members, and we are trusted to reflect the totals that they give to us. The members are also required to explain their methodologies, which we also include in the report.”
The fact that the onus lies on media partners to provide the figures has caused Higgins to encourage media partners to adopt a more transparent approach to reporting their figures.
“It will be a challenge for the industry to ensure we are measuring correctly as definitions of ‘traditional media’ change, but in the meantime we need to be transparent so we have a clear picture of the total market.”
But even if media partners were completely transparent, this wouldn’t necessarily provide a clear picture of what was happening in the industry. As the industry has developed, the lines between the traditional categories have become blurred, causing some to question the ASA’s role.
“It comes down to what the purpose is of the ASA ad spend reporting," says Bauer chief executive Paul Dykzeul. “In its current form it [the ASA ad spend report] provides a ‘relativity’ measure and an indicative guide to annual media type performance. There’s certainly a case to be made that it’s no longer relevant to split out spend by media type as the majority of media companies sell across platforms, particularly digital."
The increasing digitisation of publications that were traditionally paper-based has caused News Works to introduce the term ‘news brands’ into its vernacular, and the organisation’s executive director Jenny Stiles believes that this provides a more accurate estimation of how newspaper titles are performing in the industry.
“The majority of our members’ brands speak to readers across a range of media platforms and deliver a quality audience to advertisers across these platforms … We believe the way ad spend figures are categorised is out of step with the way many of our members consider their businesses and categorise their revenues, and with the massive change going on in the media market at large.”
Liz Fraser, MediaWorks' director of sales and marketing for TV, has however snuffed out the possibility of using this approach in television.
"The ‘news brands’ approach is being used by newspapers because their print readership numbers are so low (and continuing to drop) and they’re coupling them with online visitors (unique browsers) to bolster them up. The reality is the agencies see right through this, and if TV were to do this then they’d see right through us also."
Despite this aversion, Fraser does see merit in Stiles' belief that extra categorisation could increase the credibility of ad spend figures.
“I agree that the categorisation of Interactive covers many different mediums. With my TV hat on, if interactive were to be broken down into separate categories, this would ensure TV remains ahead of the pack for some time, and other media categories would also look better by comparison. I can understand why some in the business are pushing for this to happen, and there are good arguments for extrapolating out advertising on mobiles and tablets (IAB already splits out mobile advertising), and also separating out social media advertising, although in the end, social media is online/digital/interactive, whichever term you prefer.”
These sentiments also carry over to TVNZ, where the broadcaster's head of sales and marketing Jeremy O’Brien also believes that it might be time to update the structure.
“We feel it could be useful to take a look at how ASA report the figures, given the rapid change in the industry. From our perspective a growing portion of our advertising revenue comes from TV viewed online (so it’s categorised as interactive rather than TV), which may suggest that over time we might want to explore a new definition,” he says.
But the ASA isn’t going to bring about these changes unilaterally. As is the case with providing figures, the onus to define categories rests with the media partners.
Souter says the ASA is willing to open a dialogue in this regard, and notes that this wouldn’t be the first time that the ASA has undergone a change.
“I think it’s worthy of discussion. Media members have shown interest in discussing this, and there have been changes in the past. In the early days, the ad spend table only had five categories, but we’ve seen this expand over the years. And there’s definitely room for further change,” she says.
So what will it take to bring about this change? And what should it look like?
Back in the day, billings were used as a gauge for the size of a client, and it is still used to show the performance of the industry. But marketing isn't just about spend in traditional channels anymore and many clients are spending more on content marketing, events, PR and much more besides. So where would something like sponsor-heavy The Block NZ, a bespoke magazine for a client, an experiential activation or a series of online how-to videos fit in to the equation? Should they all be left out? Or can they be factored in to show where that money is going?
The obscurity between the marketing and editorial lines has made it particularly difficult for the Radio Bureau to provide an accurate summary of its ad spend, says Stewart.
"Last year, The Radio Bureau’s revenue from branded content and digital comprised around 10 percent of our total revenue base — there are some difficulties with exact breakdowns of total digital platform revenue, given that this is derived from both display and customised digital solutions which more often than not are part of branded content and promotional activity."
And Ben Goodale, the managing director of .99, agrees with the sentiment, saying that consumer mobility within the industry makes it even more difficult to rely on the ASA's figures.
"We're in a dynamic market, but the ASA numbers aren't issued regularly enough – so something which is much more timely, reflecting the rapid change in media properties due to the speed of change in the digital space, would be highly desirable. At the moment we are reliant on quite fragmented and sometimes conflicting sources of info. I think we'd all like to be able to make better informed decisions on media use especially with digital elements reflecting what's happening now rather than a longer time curve."
Souter has suggested that several industry players—particularly the IABNZ— have already expressed interest in updating the structure, but Dykzeul believes it doesn’t simply come down to talking about change.
“If the industry wants significant improvement to the ASA ad spend model then it is going to require resource and industry-wide collaboration and we need to clearly understand the payback for that investment,” he says.
Higgins claims that the IABNZ has already suggested getting involved but, much like Dykzeul, she recognises there might be financial restrictions that preclude this from happening.
“IAB and other media members of the ASA are keen to take this task off them and look for a better mechanism. We use PwC to collect sensitive data from our members for the quarterly IAB/PwC Interactive Ad Spend report so we would be interested in looking at something similar. Of course, all good things cost money so we as a group will need to look at how this is funded.”
While there are certain encumbrances to overcome, both Stiles and O’Brien expressed interest in collaborating with the organisation to redefine the structure of the annual ad spend report.
O’Brien singled out the IABNZ’s use of subdivisions—display, classified, search, social and mobile—in the interactive section as something which could be helpful in the future.
Lassoo’s owner and strategic manager Anna St George also believes that increased categorisation could help to render results that are more reflective of the industry.
“The TV One News app has over 339,148 downloads and more than 710,000 people have downloaded the NZ Herald’s app,” she says. “So appetite for news is not diminishing; it’s just how it’s being consumed. Therefore breaking down the spends further is timely and would provide for a more relevant picture of the trends,” she says.
And while this approach might work for a while, it also comes with a unique set of problems: the risk of a slippery slope of sub-divisions; industry changes that obscure lines between the subdivisions; and the question of where multi- or omni-channel campaigns should be allocated.
In addition to further categorisation, Dykzeul has also suggested more regular reporting and he has expressed a partiality toward Nielsen’s use of ratecards.
“In terms of ad spend measurement Bauer’s and the MPA’s priority was to get behind the improvements that Nielsen are undertaking in their ad spend product, which is based on ratecard and has the advantage of being very drillable by advertiser and media type.”
And while ratecards might provide a more objective means of measurement, they have also been criticised for a lack of accuracy.
So, our dear StopPress number crunchers, what's the right approach?