Media reforms back to bite government

The federal government media reforms are set to be deliberated as early as this week in the federal cabinet, as Communications Minister Stephen Conroy races to implement certain changes.

The media law reforms came from two independent reviews into media ownership - the Independent Media Inquiry report (often referred to as the "Finklestein Report" due the leadership of former QC Ray Finklestein) and the Convergence Review Final Report.

On 30 November 2012, the government announced a package of measures as part of its initial response to the Convergence Review to enable television broadcasters to continue to invest in and broadcast Australian content. 

Minister Conroy is looking to push a change in media-ownership rules. Currently the rules cover a "two out of three" outlook; i.e. individuals or companies can only own a controlling interest in no more than two traditional media platforms - print, radio, and free-to-air TV. Minister Conroy is aiming to expand that to a "two of four" outlook, by including Pay TV in the mix, seemingly in response to murmurs within the industry that News Ltd could look to acquire Network 10.

Other recommendations in the package include a code of ethics for journalists, a tort of privacy and increased Australian content rules. 

The media ownership aspect is backed by the ACCC, with the chairman saying that "following our decision today to oppose Seven Group getting hold of 50 per cent of Fox Sports, that same logic would apply even more strongly to News seeking to acquire a free-to-air station.”

Responses to this have been mixed at best, with Senator Nick Xenophon saying that "Any government that wants to change media laws (in an election year) has more than a death wish," and senior politicians such as Wayne Swan and Bob Carr questioning the wisdom on taking on such a large media company such as News Ltd. in an election year. 

What does that mean for us?

What we as advertisers need to watch is any issues that could arise from this, as well as opportunities gained and lost. For us, media convergence is a massive positive - deals that can span different media are obvious helps when talking sponsorships, agency deals, and individual advertiser deals. But should these laws push through, we could lose potential options and have to make sure that businesses we deal with do not skirt the edges of the new media reforms.

The other huge thing that is missing form these reports is that of digital ownership. While a small mention of the extension of media regulation to cover online news sites with a minimum of 15,000 hits a year has been watered down. Digital media laws have been slow to catch up to the changing pace of the digital landscape (ownership and copyright being glaring examples), and it seems that once again the government has put digital media in the "too-hard basket" in regards to regulation and laws.

Loyalty cards of the future

In a huge move for loyalty card holders, Qantas has announced that their frequent flyer members will now be able to use their card to withdraw cash, shop, and check-in for flights when the new chip cards are rolled out later in the year.

With the advent of RFID chips, NFC swipe-and-go card payments, and mobile check-in shopping, the movement towards a cashless society is continuing unabated.

The Qantas chip cards will work in a similar fashion to a pre-paid debit card – funds can be transferred to the card via bank account of BPAY, including up to nine different currencies with locked in exchange rates.

But the really interesting aspect of this is what it will mean to other companies who have robust loyalty programs. As the new technology emerges and is integrated more fully across the nation, other companies can work with this trend to increase users in their loyalty programs by enticing them with more options than ever: the classic “What’s In It For Me?” consumer mindset. This is a boon on many levels, as increased users also lead to increased brand loyalty, as well as increased consumer data to help hone and refine offerings.

It will be interesting to see how quickly these cards will be taken up by the existing Qantas frequent flyers, and whether they are used to their full extent.

New radio ratings system

Announced last week, Commercial Radio Australia (the radio industry body) has awarded the next three-year radio audience measurement contract to international research company GfK, starting on January 1^st 2014.

GfK was founded in 1934 in Nuremburg, Germany, and expanded internationally through the 1960’s to the 1980’s. In 2005, through the acquisition of NOP World, GfK became one of the top 5 market research organisations worldwide.

The major point of difference GfK is looking to implement in its radio surveys is the advent of an e-diary that spans a multitude of devices – computer, tablet, and phone – to replace the current paper diary modality. GfK are looking to trial an e-diary pilot system this year to assess any major complications, although as they currently run e-diary ratings surveys in several countries, they are quietly confident in regards this issue.

GfK are also looking to implement a new radio audience behaviour panel to look at key issues for the Australian radio industry, including such issues as consumption of radio via the internet and by mobile devices.

This will create a new and interesting dynamic in radio advertising, with what could be a revolution in Australian audience measurement reflecting on advertisers. The preliminary reports released by GfK will make for an interesting read, and we will definitely keep an eye out as 2013 progresses.

What does the end of “loss-leading” beer sales signify?

It has come to pass that in the last week, Wesfarmers has announced the end of the so-called “loss-leading” sales in beer. The background to this as described by the media and industry experts, is that the larger supermarket owned alcohol retailers purchase beer at a certain price, then sell it at lower than that price to drive consumers in the door, hoping to make up the difference in sales of wine and spirits.

Wesfarmers is the first of the two major supermarket chains to announce the end of this “unsustainable” practice, and there may be serious ramifications when looking outward from these suppliers to the smaller vendors.

In an ABC interview, one vendor mentioned that it was often cheaper for the smaller vendors to purchase these discounted beers from supermarket chains than direct from the supplier. With Wesfarmers cutting back on their discounts, the may be seen a significant rise in beer prices across all vendors.

The flip side of this is the rise of the “grey importing” in the beer sector. Grey importing – or the sale of items that have arrived in the country through other than regular means – has been prevalent across the electronics sector for many years now, with the rise of Ruslan Kogan and his electronic empire. In regards to the beer sector, large breweries pay for the rights to brew and thus distribute certain international beers in this country. Grey imports see companies buy these beers for a much cheaper price from countries such as Indonesia and importing them for sale, enabling them to sell these beers at a lower price.

With beer drinking in Australia at an all-time low due to the continuing growing interest in ciders and RTDs, this may be seen as the absolute best time for Wesfarmers to discontinue their aggressive beer discounting practice to focus on their wider range of offerings. With supermarkets owning 65% of all alcohol sales business in Australia, this could help cement the shift of the beer-drinking culture in Australia.

The Australian Federal Election and the Advertising Market

One of the most cluttered times of year in the Australian media calendar are the months leading up to a national election. The reason behind this can be traced back to a 1992 high court ruling – Australian Capital Television Pty Ltd v Commonwealth – which prohibited the broadcasting of politically related material on electronic media such as radio and television during the period leading up to a State or Federal election (except in news, current affairs or talkback programs).

While the date of the 2013 election has already been released by Prime Minister Julia Gillard, the election has yet to be officially “called” – the predicted date for this is the 12^th of August. This means that the months leading up to August will be some of the most hectic across all Australian media, as the political candidates attempt to broadcast their message to the Australian public before the ban on political advertising comes into effect. 

With an estimated spend of $10m - $15m for the two major political parties EACH, as well as a higher than ever before spend from the Greens across the four weeks leading into the September election, the majority of this money has been expected to be aimed at Television, thus we are looking at horribly cluttered advertising medium.

Federal political parties have been known to refine their media placement strategy by dominating news and current affairs programs, pay loads to secure premium position in break or move pre-existing advertisers, and skew earlier in the week to be in and around the highest rating shows. It is also expected they will maintain a high frequency across the campaign period, so the activity will increase massively in the lead up to the election call.

The other reason behind this increase of advertising spend, is the fact that it is not only the federal political parties that use this period to talk to the Australian public, but other interested parties as well.

Groups such as the Australian Electoral Commission are looking to spend an estimated $5m across the coming months with messages about enrolling to vote, how to vote, and where voting will take place. Other groups who add to the clutter of this time are groups who want to get their message across, either backing or attacking certain political candidates. 

Associations as diverse as Nurses and Police Officers Unions, to groups campaigning for better schools and environmental activists, all take this time to push their agenda into the Australian consciousness, beseeching the public to back the candidate who agrees with their views.

What it means for us

The biggest impact this will have for the Woolworths Ltd business is forward casting in regards to advertising campaigns and launches. The TV schedules through late July and early to mid August should be finalised and laid down as early as possible, with an eye to minimal changes for that period. Avails are already starting to dry up, and will be extremely tight the closer we are to the blackout deadline. The most important thing for all advertisers over this time period is recognise the implicit issues surrounding the Federal Election and get their strategies in place as soon as they can, and be prepared for the possibility of many spot changes.

Below is a projected calendar of the lead up to the August calling of the federal election that has been built by Aegis Media, which will hopefully show in greater detail what it will be like across this time for advertisers.