E-commerce, online clubs and communities in growth 

Commercial TV appears on course for COVID-busting growth in the three months to December this year over last and the late Australian billionaire media magnate, Kerry Packer, would have growled expletives of joy.     

In ACP Magazines, the father of troubled casino mogul James Packer once owned a more prestigious, powerful and vastly more profitable version of the German-owned Bauer Media, now owned by private equity and which yesterday rebranded to Are Media. 

Private Equity doesn’t like to lose. But perhaps surprisingly to some, Mercury plans to invest in its new media business. 

One beneficiary will be TV networks. Mercury wants to drive more consumer awareness for Are Media’s mastheads and plans to invest heavily in broad reach advertising campaigns on legacy media channels like TV. Magazines and TV were a blistering promotional combination for Kerry Packer for three decades. 

This time, however, the strategy is as much about driving audiences to magazine mastheads and their content as it is driving more users to the fast-growing online retail and comparison sites owned by Are Media – the Better Homes & Gardens e-commerce venture, for instance, is performing strongly, says Are Media’s CEO Brendon Hill. Expansion into more e-commerce consumer verticals is a high investment priority. 

Hill told Mi3 that audiences to sites like Beauty Heaven and Beauty Crew are up 30% through COVID while the Homes Club is up 40% and magazine subscriptions have lifted 8% year-on-year through Covid. 

“We have some great listing and review sites like  Beauty Heaven and Beauty Crew and we recently launched Bounty Parents,” Hill says. “I love these websites. They have such a rich community of data and then they also have different revenue models - subscriptions, listings, sampling, the list goes on. So there's some really unique products we have which we need to invest in and grow, which we are going to. We’ve been delighted with the performance of the Better Homes & Gardens online shop. We're selling a lot of products through there at the moment. There is potential for us to extend some of our brands or verticals into more e-commerce platforms as well.

Big mainstream magazine ad campaigns are back 

Hill says now that Are Media is the country’s biggest magazine publisher – circa 60% in readership share, he says – the company is putting its foot down to promote  both the magazine category and Are’s assets much harder to the Australian public.

When asked if the focus would be on Are’s digital assets, Hill says: 

“Look, we’d prefer to be investing there but we've also got to invest in our brands. It's really important that we grow our brands and nurture them and make them more visible to the public than what they have been. So we're doing a lot more above-the-line marketing of our brands and also we’ll do a lot more above-the-line marketing of the actual magazine category.

“Now we've come together under one house, we can invest in the magazine category as the market leader. So you'll see a lot more TV campaigns promoting the medium. That's an important part. Our partnership with our retailers is also really important for us. We're a big FMCG company as well and we need to do better for our retail clients.”

Are Media has just struck magazine distribution deals to be in Australia Post and Aldi stores for the first time. Hill says the combination of broader retail distribution and mainstream marketing is part of the new investment strategy backed by Mercury Capital. 

“We still reach about six in 10 Australians every month so it’s a big number and with our cross-platform assets we’re reaching nearly 10 million Australians,” he says. “So we're a big business but we also need to evolve and looking forward to the future and how we can diversify these brands and make more out of them.”

The new magazine business clearly wants to diversify and reduce its reliance on the digital advertising market by selling stuff directly to consumers rather than just sell ads to other companies who want to sell stuff to consumers.

Market talks hard post-Bauer

Hill says the company went to the industry in July for a “warts-and-all” assessment of the magazine group and discovered some big opportunities and brutal truth, which formed part of the internal team’s strategy for the re-brand and future investment plans.

“It was really interesting,” Hill says. “Our brands and our editors are still incredibly influential people and really highly respected, which is good. But we have a lot of work to do in educating the market about our digital offering and our digital strategy. Not a lot of people realise how big we are in that space and what we can do for them. 

“So it's on us to do a better job at that. We will be having a big upfront in early November, we'll tell people more about that part of our business and how they can use us.”

Why Are Media?

The re-brand from Bauer to Are was done from the get-go internally, Hill says. A team of top strategist, designers, editors and salespeople worked on a list of names, based on the market conversations in July. A long list of brands got down to 15 and then cut to six. After design mock-ups the final two options were voted on by Bauer’s senior team of 35. 

“We’re pretty delighted with it,” he says. “It really signifies a fresh start, a new beginning for us. And it's really, I think, a powerful name in kind of three ways. “One it's really easy for us to use in trade, and that's really important for us with our messages and such a diverse business which reaches so many different types of people with so many different brands. We can use it easily:  we are women, we are motoring, we are industry and in New Zealand, we are current affairs. So we can use it cleverly in lots of presentations. It encapsulates what we do really well and what we want to be in the future.”

Hill says what comes next is growth. “We’ll be looking for new initiatives, new products and rebuilds continuously,” he says. 

This article was originally written and published editorially on Mi3 and has been rephublished with Mi3's permission as a Market Voice for Are Media.