What you need to know:

• Nine pushes “total media” as it bids to unite its divisions and take a greater share of cross-channel ad budgets.
• Linear TV takes backseat in Upfronts, with streaming and on-demand matched on stage by publishing and audio.
• Major overhaul of 9Now. Live streaming the key focus ahead of on demand.
• Addressable audio push.
• Strong integration of news across TV, radio and publishing.
• Buyers laud bid to tie together channels, but warn upfront cash commitments will be smaller, certainly for linear TV, as market softens and headwinds strengthen.
• Netflix and Disney+ ad tiers seen as more of a threat than networks admit. Stan could be next, per buyers.
• Content slate viewed as “very solid”.
• Attention metrics some way off.

Nine is still banging the drum for ‘total television’ in market but the new mantra from its 2023 Upfronts presentation – the first from broadcasters – is “total media” as the group positions for a greater slice of Australia’s cross-channel ad budgets via TV in all its forms, publishing and audio. It was a less rowdy effort from Nine this year compared to what has been before although content across all its media units was a major focus. Nine's publishing and radio divisions finally shared the spotlight in equal measure to video and TV but at the expense of linear.

Media buyers lauded Nine’s bid to tie its media strings together. But they signalled fewer dollars could be allocated upfront for 2023. They are hunting better deals to see where the audience lands across all video channels as the economic outlook worsens. Omnicom Media Group boss Peter Horgan indicated his group's “float” – the money held back to strike opportunistic deals throughout next year – could be significantly higher than 20 per cent, previously considered to be at the top end of uncommitted annual TV budgets.

“I think most negotiators will be looking to maintain flexibility with so much movement of audience and performance,” Horgan told Mi3. “There will be less upfront and more scatter.” Could this be Omnicom’s biggest float year on record for television? “Potentially,” per Horgan. “You’ll have to wait and see.”

Against a less-integrated competitive set, Nine appears to have read the runes; its downweighting yesterday of linear TV and upgrading of broader assets could ultimately keep Nine buoyant amid an outgoing linear tide – if it can convince advertisers of its cross-channel scale and first party data credentials as 2023 unfolds.

"They have to change the way they go to market because that's what consumers are doing," said Peter Vogel, CEO of GroupM's Wavemaker. "If you look at how people are consuming content, yes, the big TV in the living room, which is now connected, is still the preferred place to consume that content but they're not consuming it in a linear fashion aside from news and sport. So I think it's the right message. They have to speak that message.

"It is great to see Australian confidence coming through," Vogel added. "We need big, strong media owners and publishers in Australia and the fact that they've worked really hard on their strategy to not only generate great content but across a lot of different platforms and then with data is a good sign. The content is solid, certainly the news coverage."

The Head of Media Intelligence at Publicis Media Exchange, Rowena Newman concurred: "Overall, it was a fantastic showcase of Nine’s cross media scale; a tour de force across TV, VOD, publishing, digital and radio."

When push comes to shove on cross-channel deals from Nine, one telco marketer suggested “it all depends on how flexible Nine is willing to be.”

9Now vs Nine then

Nine’s upfront reflected its new operating model. Four years after buying Fairfax and three years since taking full control of Macquarie, the company is finally aligning its divisions. Rather than TV hogging the limelight, publishing and audio had fair share of voice in front of 1,200 brands and buyers at Luna Park.

That said, BVOD was the centrepiece with a major upgrade of 9Now, which looks slicker than anything currently in market. As the global streaming giants prepare to launch ad-funded tiers locally, Nine is making high definition user experience the battleground in a bid to own both the lion’s share of on-demand and live streaming audiences.

It spies biggest revenue growth in the latter: Sales chief Michael Stephenson claimed live streaming is outstripping on demand growth by a factor of two to one, with Nine’s total live minutes up 63 per cent calendar year to date and 83 per cent up for FY22 versus FY21.

The network plans to accelerate that shift by automatically playing live shows on the 9Now home screen while launching ‘start-over’ functionality across programmes. That means viewers that arrive late to a show already ‘on air’ can start from the beginning – which will be counted in live numbers rather than on demand.

Those ads can’t be skipped and more live TV means more inventory for Nine: On demand currently carries 8 minutes of ads per hour. Live streams pack in 13 minutes of ads per hour, a 63 per cent increase, underlining Stephenson’s assertion that “the future of streaming is live supported by on demand, not the other way around”, as are an increasing proportion of Nine’s total TV future cashflows. While on demand currently makes up about 65 per cent of streamed minutes and live around 35 per cent, per total TV boss Richard Hunwick, the tipping point of live overtaking on demand could come within 12 months, according to Stephenson.

Meanwhile, the network is casting out new revenue lines by launching “pop up” streaming channels around major properties in a bid to hook more brands, effectively slicing and dicing its content investments via the TV equivalent of microsites. It calls these FAST channels, or ‘free ad-supported streaming TV’.

Chief product officer Rebecca Haagsma, a former 9Now director who returned to the firm in July after a six year stint at Telstra, said Nine will also launch interactive and shoppable ads in the new year, while 9Now ads across the piste are in full high definition, “a first in this market.”

News push, audio integration

Nine made news a major plank of its upfront – and has been busy integrating its news across publishing, TV and audio.

For digital versions of SMH and The Age, it’s launching digital ad insertion – streaming video and rich media, which means Nine can sell different ads in the digital version to those sold into print, including “false” covers. Total Publishing sales chief Jo Clasby said that would not cause conflict with existing paper advertisers – because they have so far been getting the digital version of the paper thrown in for free.

“It's definitely an option for them to add fries with that and get their ads rolled into today's paper [digital] publication. Otherwise it will be an additional sell for us to go after new clients… and get them trialling our other assets”.

To date, Nine has been missing a trick, Clasby admitted. “We’ve been giving away quite a lot,” with its main mastheads notching around 60,000 downloads on average during the week and circa 100,000 on Saturdays.

While Nine has been trialling programmatic ads within the digital papers, Clasby said it will initially launch via “handheld sales” to control quality.

Nine will also launch a machine-read of its news and broader lifestyle content, which brings audio ads – and audio advertisers – into its publishing business. Both Clasby and Nine Total Audio boss Ashley Earnshaw suggested that would bring upside to both business units rather than cannibalisation.

Meanwhile, in a fresh attempt to loosen News Corp's grip on the Queensland market, Nine is integrating TV and radio news content into the Brisbane Times, bidding to out-punch the Courier Mail. Tasmania gets its own 6pm news show via WIN.

For audio as a whole, “fully addressable” advertising was Nine’s major push, as the network talked up the scale of its logged-in first party audience data overlaid with location and loyalty data to target radio, live stream and podcast audiences.

Nine also touted the ability to “own traffic updates” to retail advertisers nationally by launching the Nine Traffic Network across radio, audio live streams and TV via Today, which could spell trouble for incumbent provider ATN.

Nine by claimed numbers – and first party audience match rates

Per Stephenson, Nine’s digital audiences now stand at:

• 20 million user IDs amassed.
• “More than 10 million monthly active users coming back into our digital ecosystem every month.”
• 16m people a month consuming news content across publishing assets.
• 12.5m combined print and digital readership across SMH and The Age.
• 3.5m combined readers of AFR.
• “Two million people listening to our radio assets”.
• 10m monthly audio streams and 600m streaming minutes “and more than 25 per cent of our [audio] audience is now consuming our content via live stream.
• At last year’s upfront, Stephenson said 9Now was sitting somewhere between 3-4m logged in users. That has grown to 4.685m.

As a result of logged-in audience growth, Stephenson claimed Nine is now averaging around 50 per cent first party data matching with brands – but said the push to integrate its TV, publishing and audio businesses should increase match rates.

“[First party audience matching] has got to be done at scale – it will never be done in isolation [within individual channels]. Television is more powerful alongside BVOD and that is more powerful if you have publishing and audio attached to it,” said Stephenson. “And Youtube can’t do any of that.”

Galaxy: Off peak programmatic buying hits 50 per cent, primetime and CPM-based cross channel buying next?

Last September, Stephenson said off peak TV buying via its programmatic Galaxy platform – which allocates audience reach via machines - was sitting at 40 per cent, stating an ambition to hit 70 per cent within 12 months.  It’s now circa 50 per cent, though Richard Hunwick said holdcos were programmatically trading off peak “above 70 per cent, because they recognise the efficiency … it’s direct advertisers who bring the numbers down”.

Stephenson said the capability to trade primetime inventory via Galaxy exists, but suggested most of the market is not yet ready.

“The reason we haven’t yet pushed the button is because media buyers are building reach modules – and the vast majority of your reach today comes from primetime on the main channel. But I think as VOZ shows reach starting to spread more evenly through other channels like 9Now … it just becomes about when you do you want to go [all-in on programmatic].”

A shift to CPM-based trading “would probably be the catalyst to start introducing some people to Galaxy from primetime on the main [channel] … because then you’ve got the trading for a consistent CPM across an entire audience profile”, said Stephenson.

That shift will come when a critical mass of buyers are ready, added Hunwick, at which point the network “will be ready to go reasonably hard”.  However, some TV network execs have privately told Mi3 that media buyers are reluctant to fully cede control of primetime investment to algorithmic buying.

But beyond Galaxy, Nine is already striking deals with blue chip advertisers across all its TV and video assets with common ad rates – BVOD, for example, has hitherto been priced much higher than linear TV. It was this cross-channel single pricing position that would give Nine some power in price negotiations for 2023, one agency boss told Mi3. "The only way they can get there is to do channel-agnostic deals. That means you get the same rate if you're advertising on linear or BVOD so you can optimise across platforms without incurring a premium rate." 

Attention metrics: Not ready yet

Nine struck a deal with Amplified Intelligence just before last year’s upfront, stating that it hoped to have an attention product in market by April, but Stephenson said attention as a tradable currency remains some way off. Nine is working out how to “mine the granular data we already have” but “won’t rush into doing anything”.

Next year is the new target with buyers also grappling with how to plan and buy based on attention versus traditional reach metrics.

“Right now, the [attention] data advertisers and agencies have is at a very early stage, it is very shallow, with almost no level of detail”, per Stephenson. Either way, he reiterated attention metrics will always play second fiddle to TVs traditional currency

“Will people look to optimise against attention? I think that's possible. But I don't think anyone's going to be buying a TV schedule across linear and BVOD based on attention,” he said.

“The metric by which you transact and trade will forever be the gold standard of OzTAM television ratings and the VPM numbers that all become a part of the VOZ database,” said Stephenson. “That will be the currency.” But eventually, “those looking to extract maximum value out of their campaigns will be able to optimise against attention.”

Asked for thoughts on Byron Sharp’s recent assertion that advertisers should not pay more for greater levels of attention than required to do the job, Stephenson, an alumnus of University of South Australia, suggested Nine holds a different view – but needs to build the data to prove it.

“Byron Sharp was my professor at university, and I’m still a little bit frightened of him. It’s early stages, but what we are exploring is whether greater levels of attention can deliver greater business outcomes. Our belief is that if someone is paying more attention to an ad for longer it will be more effective – and if effectiveness is a proxy for business outcomes, then that seems to make sense.”

‘Small’ Netflix ‘threatens Youtube, not Nine’…

Stephenson dismissed Netflix and Disney+ as serious rivals for ad dollars.

“I think 9Now will be differentiated as a fully ad-funded product, whereas what [Netflix and Disney] are going to be selling is a subset of their product – a tier which is relatively small. I read in Mi3 that [Netflix] is already discounting by 45 per cent before it’s even started. So what was small just got 45 per cent smaller,” suggested Stephenson.

“I suspect the smart buyers thinking about buying ads from Netflix, albeit the targeting is basic, would be taking that money from Youtube so that they can grow their premium proposition – because what Netflix does have is premium content,” he added. “I don’t imagine you would take that money from Seven, Nine or Ten’s BVOD products. You'd be taking it from user-generated social video.”

… though media buyers disagree

OMD co-CEO, Sian Whitnall implied the streaming giants might be more of a threat than Australia’s incumbents will admit – and pointed to the “complete pivot” of this year’s upfront.

“Last year was all about being a tech company. Maybe the competitive landscape has changed, but this time it was content first,” she said. “Maybe that shows who Nine sees as the competition.”

Carat Chief Investment Officer Craig Cooper backed that view.

“Netflix is a definite threat – not just for Nine but for all the networks – and for Youtube.” Cooper thought the local launch of ad-funded tiers from Netflix and Disney+ may ultimately lead to an ad-funded model for Stan. “They may have to launch one to compete – probably not in 2023, but in 2024.” However, he thought a “late mover advantage” could end up de-risking any Stan ads launch.

More broadly, Cooper thought a genuine cross-platform play represents a smart move as well as a broader hedge: “That’s where the audiences and the money will be … It looks like Nine has finally got everything working together." It was about time, Cooper suggested, "but good for them.”

Publicis Media Exchange Head of Media Intelligence, Rowena Newman, had a similar line on the potential for a Stan ads play.

“While nothing was said specifically about the launch of advertising in Stan, the inclusion of Stan in the Upfronts does beg the question, given the launch of Netflix’ ad-funded platform later this year,” she said.

Newman’s broader observations: “Nine mentioned they are leveraging 20 million signed in users this year, which is a huge jump up from the 14 million claimed in last year’s Upfronts. My team is keen to understand more around programmatic radio and the traffic network. They both sound interesting, but weren’t covered in much detail.”

The slate: "very solid"

The programming slate looks very solid, per a vox pop of buyers. Nine nosed its show reel with The Summit, an Endemol Shine-produced adventure strategy game akin to Survivor on a mountain, where ten players race to the top with a million dollars at stake. Stephenson reckoned it will be “the biggest new show of the year” and will run across live broadcast, streaming and on demand.

My Mum, Your Dad, from the makers of Married at First Sight, was billed as the “ultimate social experiment… kids nominate their parents to find love for a second time”. Publicis Media Exchange's Rowena Newman predicted it would be “a runaway hit … what’s not to love about an awkward mash-up of Boomer Love Island and GoggleBox?”

Gordon Ramsay also returns with what looks like the love-child of Dragon’s Den and Kitchen Nightmares. It’s called Food Stars.

There’s also a Warnie miniseries; plus Big Miracles, which follows ten couples trying to have a baby via IVF; Aussie drama Human Error and in a reality double-header, a bid to find Australia’s most identical twins.

Per buyers, news and sport also look strong, with returns and new variants of past performers, including The Block and Lego Masters.