Gray Matters: putting up walls, analytics and performance, and how Kiwis and Aussies differ

  • Voices
  • May 2, 2019
  • Graham Medcalf
Gray Matters: putting up walls, analytics and performance, and how Kiwis and Aussies differ

Pay v Free

The digital disruption of newspapers and magazines will be well-known to readers of StopPress. The decline of classified advertising and free news on the internet shattered the core pillars of media profitability.

It was the then News Corp. chairman and CEO Rupert Murdoch said of Google’s news aggregation: “There are those that think they have the right to take our news content and use it for their own purposes without contributing a penny to its production. Their almost wholesale misappropriation of our stories is not fair use. To be impolite, it’s theft.”

Be that as it may, Google and Facebook are now the greatest disseminators of news provided by other sources.

It is interesting then, that The New Zealand Herald has chosen to head in the direction of a digital paywall. The Herald has resisted the move for as long as it could, while looking for a solution that would not drive its ever-diminishing readership even lower.

The solution is, in my opinion a clever one. Leaving aside the good news that current subscribers to the print edition will receive access to The Herald’s digital content at no extra cost (thank you!) this week’s launch of Premium Content digital subscriptions on nzherald.co.nz will give readers not only unlimited access to the very best of The Herald’s content but will also introduce them to “the very best of journalism from The New York Times, The Times (UK), The Financial Times and Harvard Business Review.

These join a “syndication stable that already includes The Washington Post, The Daily Telegraph (UK0 and the South China Morning Post”.

It is, as The Herald advised, “the biggest move on the local media landscape in 2019”.

Others have tried this move with limited success and many claim that The New York Times and others only survived the introduction of a digital paywall after they benefited from the “Trump bump”, a desire by millions of Americans to catch the latest scuttlebutt surrounding the 45th president of the United States.

It’s a brave move for The Herald when so many other New Zealand news sources are readily available online. Newshub and Stuff are no doubt extremely happy to sit back and watch the future unfold, with the potential of an immediate readership benefit for them and a nice trial being taken on their behalf.

The interesting aside for marketers and advertisers will be in their negotiations with The Herald sales reps, prior to the first definitive readership figures, after the paywall goes up. How, as a sales rep, do you sell advertising when the only readership numbers you have to offer were relevant only when news was free?

Money from subscriptions have never covered the costs of production and delivery. Even if publishers go totally digital, the writers have to be paid and advertising has always been the golden goose. The question is how much of a readership loss will there be once the paywall is introduced and what effect will that have on the decisions to be made by advertisers?

We wait with bated breath. 

Print v Digital

Like newspapers, magazines have been under assault from the digital disruption and ESPNThe Magazine is now the latest publication to abandon print. Our own NZ Marketing has only three issues a year compared to 11 issues a few years ago. StopPress has of course taken over the job of informing marketers and advertisers in real time, with the print edition focusing on long copy, in-depth features.

The balance between print and digital continues to be an ongoing concern for magazines and often, as in the case of ESPN the move from one to the other is made under financial duress, rather than the publisher taking a more strategic approach and recognizing the differing values of print and digital versions.

As AdAge reports, “magazines have been abandoning their print editions to cut costs, helping them cope with the loss of advertising revenue to tech giants like Facebook and Google”.

Last September, Freeport Press promoted a 10-question survey to a variety of magazine readers in North America. The survey concluded that consumers subscribe more often to print than digital and, “while publishers talk about embracing the digital future of their publications, ordinary people like you and me still prefer to read a good glossy”.

So how does this affect advertisers. In a feature in Forbes, Jeannie Ruesch from Xero makes the valid comment: “Print ads will be more effective if they are a complement to your digital campaigns already in play and entice readers to interact with your brand online.” Certainly, the publishers of StopPress and NZ Marketing would agree with that.

Data v Insights

There has been a lot written about marketing analytics recently, with articles like that in B&T headed “Finally! The definitive guide to marketing metrics and analytics has arrived, saying: “Mercifully, the good folk at Marketo have toiled away and come up with The Definitive Guide to Marketing Metrics and Analytics for your downloading pleasure”.

But this comes on the back of a Harvard Business Review feature that explains why marketing analytics hasn’t lived up to Its promise.

The HBR article quotes a CMO survey from 2018, conducted by Duke University’s Fuqua School of Business and sponsored by Deloitte LLP and the American Marketing Association, reports that “the percentage of marketing budgets companies plan to allocate to analytics over the next three years will increase from 5.8 percent to 17.3 percent—a whopping 198 percent increase”.

  1. The authors of the HBR article, Carl F. Mela and Christine Moorman say: “These increases are expected despite the fact that top marketers report that the effect of analytics on company-wide performance remains modest,” and more importantly, “this performance impact has shown little increase over the last five years.”

So, what’s the problem? Often data is not integrated and is difficult to analyse. A lot of data does not necessarily mean a lot of useful information. As Mela and Moorman write, “while it is true search advertising can be correlated with purchase because customers are in a motivated state to buy, it does not follow that ads caused sales. Even if the firm did not advertise, consumers are motivated to buy, so how does one know whether the ads were effective?”

Data and insights are not the same and all too often a strategic approach to marketing analytics is lacking.

Aussies v Kiwis

Over the years, many consumer goods marketing decisions in New Zealand have been made or overseen by marketing people in Australia, in fact still today many New Zealand marketers report in to Australian bosses. But are the markets the same and are our brand preferences similar? Well, if the latest Reader’s Digest Trusted Brands surveys are anything to go by, the answer is a resounding No!

There is only one brand appearing in the top 20 of the 20th anniversary Trusted Brands survey in both countries and that is Dettol – number one in Australia and number seven in New Zealand.

Iconic New Zealand chocolate brand, Whittaker’s, has won Most Trusted of all Brands Survey title for the eighth consecutive year but in Australia, Cadbury is the favourite chocolate, coming in at number 13. New Zealanders prefer to buy their hardware at Mitre 10, while our Aussie mates go to Bunnings.

Multinationals tend to look for efficiencies by centralising marketing teams but as Nielsen showed back in 2017, there are numerous differences between New Zealand and Australian consumers to look out for.

As the Nielsen report states: “While there’s some shared history and good-natured sporting passion between Australia and New Zealand, there’s also some key differences in demographics, how we shop and our views. When it comes to putting consumers front and centre for new products, marketing messages and media planning, a one size fits all approach requires finesse.”

Global v Local

Looking at the Most Effective Agencies 2019 and the Most Effective Independent Agencies 2019 it came to mind that the most effective brands seldom consider the most effective independent agencies, unless they too are not part of some multi-national conglomerate.

A Campaign summary report highlights Special Group which, “has ranked third most effective independent agency in the world, making it the #1 independent agency across Asia-Pacific. Other Kiwi agencies in the indie agency APAC rankings include True in at #4, Many Minds and Platform 29 have both ranked in at #15, whilst Shine Limited has ranked in at #21”.

In October, AdNews wrote: “The New Zealand creative scene has long been dominated by the battle of the big multinational agencies — Colenso and DDB — followed by the likes of FCB and Saatchi & Saatchi ….  many would argue, Special Group is NZ's strongest independent, with Shine and True also highly regarded.”

In the AdNews article, Special Group ECD and founding partner, Tony Bradbourne, said the region is better suited to the spirit within independent agencies. “Generally, in New Zealand, people want to do more innovative work than traditional work. They want to make things happen that have not happened before, whereas multinationals are good at doing the same thing over and over again and monetising that," he was reported as saying.

While WPP, Omnicom, Publicis Groupe, Interpublic and Dentsu are the largest holding companies globally, locally WPP has a smaller presence in the New Zealand market.

In June we read: “Nearly three-quarters (74 percent) of major multinational brands are reviewing their current agency arrangements.” This was according to newly-published research by the World Federation of Advertisers (WFA) and The Observatory International.

The study found widespread dissatisfaction from both agencies and clients and one wonders whether global appointments might have something to do with this and perhaps local appointments might allow top brands to tap into the services offered by top independents. Or is that just wishful thinking?

Afterthought

“The truth is: We need to fundamentally change the way we think about advertising. And marketing. And channels. And maybe ask ourselves, ‘What would Don Draper do?’ One idea. On a board. In a room. Making one point about the brand. Then translated into whichever channel can reach our target. Desperate? Maybe. But if the idea is big enough, it could do the trick, across markets and channels.” - Jörg Dietzel writing for Mumbrella

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