Gray Matters: Operating an OOH business, the state of TV, mergers, #metoo and a breakfast beer

  • Voices
  • December 7, 2018
  • Graham Medcalf
Gray Matters: Operating an OOH business, the state of TV, mergers, #metoo and a breakfast beer
Image: Hallertau Brewery Facebook

The proposed merger of QMS Media’s New Zealand out-of-home, production and digital media business (QMS NZ) and MediaWorks' radio, TV and digital business has raised eyebrows in certain quarters. But in April this year, Adweek ran a feature, How Out-of-Home Media Companies Must Reinvent Themselves as Publishers to Survive, in which Dave Etherington contended that, “OOH media owners can no longer just be real estate companies. They must evolve to become publishers."

What he was driving at was OOH being the only major advertising medium that is not content-driven. “With TV, radio, magazines, newspapers and the internet, advertising appears adjacent to content that draws the audience. OOH has never been content-driven, but rather real estate-driven.”

The proposal follows on the back of Europe’s largest radio company, Global Media & Entertainment, purchasing two UK based outdoor advertising assets: Primesight and Outdoor Plus, in September. In an article in oohtoday.com Bill Board poses the question: “Are there any success stories of radio owning and operating an Out of Home company?” His answer is blunt: “History tells us, radio does not know how to own and operate an OOH business.”

So, the management structure of the merged entity is going to be vital in the New Zealand iteration. We are already seeing the consequences of the rival goals of editorial creativity and revenue generation at MediaWorks, and we know how people and organisations resist change.

The culture of OOH companies is significantly different to that of radio, which in turn has been seen to be at odds with the culture of TV oriented bosses. Just ask Mitch Harris about that.

As highlighted in The Revenue Stream Revolution in Entertainment and Media on strategy-business.com, developing new sources of income is a vital strategic imperative in the entertainment and media ecosystem, and successful companies in this space have always benefited from multiple revenue streams. So, the merger makes sense from that perspective, but in today’s environment “traditional sources of advertising and revenues are drying up”.

The key conclusion is that: “Building new revenue streams requires making significant changes to the strategy, operating model, and culture of entertainment and media companies.”

Let’s hope Michael Anderson, CEO of MediaWorks, is correct in his assumption that the proposed merger, “will present an outstanding opportunity to build its market presence with product and audience breadth in an environment where it’s able to grow and enable its continued investment in local content across television, radio and digital".

Where’s the Remote?

Anderson and the rest of MediaWorks might well be reflecting on the seeming inability of Kiwi TV viewers to change channels, or indeed, the habits of a lifetime. Forget about Netflix, Lightbox or Amazon Prime, Three seems unable to make inroads against TVNZ 1. The top 10 television programmes for 2018 all featured on New Zealand’s favourite channel.

Three News can’t seem to dent 1 News and MediaWorks obsession with reality TV can’t seem to make inroads against the real (not fake) lives in sport, royalty and country life; or even those of cops and border control officials.

Our Australian cousins appear even more obsessed with news than we do with the top five watched programmes for the week ending Tuesday 4 December 2018 being 1. Seven News, 2. Seven news/today Tonight, 3. Nine News, 4. Nine News 6:30, 5. A Current Affair.

By comparison, in the UK there is, “currently a fairly even split between ITV and BBC One for the top spots,” according to tellymix.co.uk. The royal wedding features at number 10 compared to number four in New Zealand (yes, we are monarchists) but news does not appear at all in the UK top ten listings despite Brexit being the most important happening for the UK since the Second World War.

Soccer dominates the list with World Cup matches taking the top two spots. Perhaps here is a clue for MediaWorks – with Spark and TVNZ heading down the sports route there may be a further loss in viewership in the future.

BBC director-general Tony Hall addressed MPs in 2017, speaking of the threat posed by Amazon and Netflix to the BBC and ITV. He suggested, “BBC and ITV could join forces to form their own 'British Netflix' to take on the new competition from Silicon Valley.

Earlier this year, the New Zealand broadcasting minister appointed advisors to look into funding our public media. RNZ reported the Public Media Funding Commission would be “an independent and non-political voice for media organisations”.

It could do worse than consider an approach similar to that proposed by Hall and place additional funding in the hands of both TVNZ and MediaWorks to ensure we continue to have a robust and competitive free-to-air television service for the benefit of all New Zealanders.

Bloody Accountants

As an ex general manager of JWT in New Zealand, I was interested to read that after 154 years, J. Walter Thompson is no more and is to unite with Wunderman to form Wunderman Thompson. I can only agree with Michael Farmer writing in AdAge that recent agency mergers focus on the wrong problem and WPP’s addiction to cost reduction needs to change. Farmer hits the nail on the head when he writes: “What's really killing agencies and holding companies is the declining level of agency fees and billing rates, and the uncontrolled growth of agency workloads." These are "price problems" rather than "cost problems," and they are not currently being addressed by agency CEOs.

Gone are the days of commission funded resources and New Zealand agencies, in particular, have had to rely on overworked junior staff doing the jobs that used to be carried out by seasoned professionals who could fit their duties in between the long lunch and cocktail hour.

“Merging agencies to get rid of overhead and top management costs – has no long-term future unless it is coupled with serious efforts to regain control of fees and workloads,” says Farmer, who is the author of Madison Avenue Manslaughter.

Farmer wrote a piece for Mumbrella Asia highlighting shrinking ad agencies with low morale, low salaries and hiring freezes. He identifies consulting firms as part of the problem, where companies like Deloitte and Accenture are acquiring media and creative agencies, in an attempt to improve their own implementation capability, “required to retain clients after brand strategy work has been done”.

In another threat to the prevailing order, these same consulting firms are enabling clients to build successful full-service in-house agencies.

While we worry about the effects of an obsession with shareholder value or the changes wrought by digital, data, mobile and content, the very earth beneath the advertising industry is shifting beneath our feet.

Not Me

A link on StopPress took me to the section Genius from Elsewhere and a Time article, Victoria's Secret Created an Impossible Ideal of Sexy. Now It's Struggling to Stay Relevant, the theme of which is that Victoria’s Secret’s, “one-note definition of sexy is no longer shared by many American women”. This got me wondering how the age of #metoo has changed perceptions and influenced marketers and advertisers.

In June, SmartBrief asked this very question: The impact of #metoo on the advertising industry. “Many brands are working toward more fair and balanced treatment of women in their advertisements,” trumpeted Emily Crowe’s article. But have we seen much change in New Zealand, other than the Dove campaign for real beauty, which pre-empted #metoo and creatively showed that women come in all shapes and sizes?

“Research proves that ads and entertainment in which women and girls are accurately portrayed generate significantly more awareness, recall, and purchase intent than ads in which they are not,” according to the Association of National Advertisers #SeeHer Gender Equality Measure. The ANA AFE, which is a collective of America’s largest advertisers, launched the #SeeHer initiative in partnership with The Female Quotient (TFQ) to increase the accurate portrayal of women and girls in advertising.

The Advertising Standards Authority in the UK ruled in 2017 that it would “no longer tolerate ads which feature harmful gender stereotypes and will penalise them in much the same way that it would content which promotes unhealthy body image”.

Here in New Zealand, a complaint against an IAG TVC for State Roadside Rescue that showed a teenage girl staring into the open bonnet of a car with makeup running down her face was not upheld. The complainant said, “the advertisement portrayed female drivers in a sexist and degrading way and portrayed an out-of-date stereotype of women being helpless and over-emotional and in need of men’s protection”. However, The ASA ruled the Stereotype Did Not Meet Offensive Threshold.

This ruling was despite ANZA claiming: “Here in New Zealand there are already robust rules regarding stereotyping within the ASA Code.” The new codes became effective on 1 November 2018.

ANZA reported that the UK ASA’s report into gender stereotypes in advertising, “had gained a great deal of media coverage in New Zealand and raised questions about the rules applying to stereotyping in New Zealand's advertising codes”.

So where does that leave local ad agencies? Is there a greater awareness of the issue of gender stereotyping or is it a case of business as usual? Any StopPress readers care to comment?

If you are not sure about how the ASA codes are applied, The ASA offers an AdHelp Information Service. Or contact Claire Hofer, the Advertising Standards Authority education and development manager. She has been with the ASA for over two years. Her role involves developing and delivering training programmes on the application of the ASA Codes and developing resources to assist advertisers, agencies and media to understand and apply the codes.

Beer for Breakfast

Kellogg’s has unveiled a beer collaboration with Auckland-based craft brewery Hallertau to launch a limited-edition Crunchy Nut-inspired beer. Now that seems like a bit of a brand-association stretch but not the first.

“A brand partnership’s purpose is “to build a vehicle that allows the user base of both brands to get on board, and go on an adventure together,” says Gracie Page, a content marketing expert at Y&R London.

She was quoted in an article by Mark Kosin on Urbo.com, highlighting brand partnerships that failed miserably. Mark rightly advises that invariably, plenty of partnerships don’t go as planned and can end up having negative effects on one or both brands. “When things go wrong, there is usually some kind of disconnect at the heart of it all,” he says.

One example he gives is the originally good brand association between Shell and Lego. All went fine until Greenpeace got involved and released a widely watched and shared YouTube video that criticized the partnership by enveloping a picturesque Lego arctic with thick, unforgiving crude oil… all to a melancholy rendition of The Lego Movie theme, 'Everything is Awesome'.

How long before some anti-alcohol activists take a similar approach to the linking of an alcoholic beverage with a breakfast cereal. The brand association could go pop, before it even starts to snap and crackle. 

Afterthought

Receiving my first newsletter from Simon Virtue, general manager of MediaWorks, Auckland, I looked at the name ‘Local Insight’ and wondered if he ever considered calling the communication ‘Virtue Signalling’. 

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