What you need to know:

• Hardest-hit media channels through COVID - radio, outdoor and cinema - see audiences return but face a CPM crunch as media agencies look to grind out deep discounts, some under the cover of not breaching malus clauses in their advertiser contracts
• SCA, Val Morgan, QMS and oOh!Media warn the current bargains won't last beyond the first few months, as advertisers begin to wade back into the market
• Val Morgan's Guy Burbidge says there is "no way slashing CPMs by 30%" is sustainable
• Outdoor providers oOh!Media and QMS are seeing increases in activity, conversations, and bookings with August and September showing strong signs of advertisers coming out of hibernation
• QMS says its audience reach has bounced back to over 70% of pre-COVID levels
• oOh!Media CEO Brendon Cook says bookings are directionally returning to previous year-on-year levels but still have "a ways to go".
• Premium inventory is still in high demand - Cook says oOh! just secured the highest price ever for one of its key pieces of signage.
• Cinema is preparing for a limited ticketed session, commencing from July 2.
• The first few weeks will primarily feature films that had their box office run cut short due to COVID, with Disney's Mulan the first new film to premiere in cinemas on July 23.
• A survey by Event Cinemas of over 20,000 active cinema-goers showed that once cinemas reopen, 94% of respondents intend to visit just as frequently, or more often.
• SCA sales boss Brian Gallagher says the network has seen month-on-month growth in forward bookings for June, July and August but comes amid estimates of a slump of up to 50% in ad revenue for metro radio operators since the beginning of the lockdown
• Gallagher says his regional radio network is approaching year-prior levels, underpinned by national advertisers. The Boomtown regional economies initiative from media groups, he says, has made an impact. 
• SCA has seen double-digit revenue growth during the pandemic in its digital radio division.
• Despite increased road traffic, Gallagher says radio networks won't get another audience survey to trade on until September, leaving the sector with only the two results for this year.

Wheeling and dealing: the CPM crunch

As radio, outdoor and cinema prepare for the great swing, they all face one big, hairy looming challenge:  Agencies and advertisers are hunting deep discounts and longer-term hacks in CPMs.

Expectations that a CPM crunch could extend well into the back half of the fourth quarter for OOH was quashed by oOh!Media CEO Brendon Cook, who says while there may be early exemptions or reduced rates for heavily impacted zones like airports, premium price points overall would hold.

"People still want premium locations at the appropriate time but for scale and a big audience reach play, you probably have got a more negotiable situation at the moment," Cook told Mi3.

"That will change, of course, because the markets will come back, so what we're hearing from the agencies is they are advising clients to get their reach through display from now to August because as things return, outdoor is likely to be a very different proposition."

CEO of rival out-of-home provider QMS, John O'Neill, agreed but warned there needs to be some caution about perceived value versus real.

"The fact that we now have the data to show real audiences, we would urge advertisers to look at the whole picture and ensure they are making the right decisions based on the most accurate data available," O'Neill says.

"It is important that clients get what they briefed – not just ‘bonus’ to deliver a perceived value in areas where it is not needed."

SCA Chief Sales Officer Brian Gallagher says no-one is immune; there's not a media player in the market that hasn't already felt the pressure to value-add during this crisis. "When all you're competitors are doing the same thing, it's hard to stand out and not comply with what the market is doing," he says.

While there will be some advertisers and agencies who take advantage of lower rates and value-adds, Gallagher says they will ultimately have to raise their budget to "make up the ground" lost to those who have supported media owners from the start.

"I wouldn't back media to be providing continuing discounts when actually the market will dictate that there will be an increase in demand and that will go to price," Gallagher says.

"Price is elastic and goes both ways, so anybody that wants to see long term capitalisation on a decrease in their CPMS needs to have more than one trick in their bag because that won't hold. When the market increases demand that that strategy will go out the window."

Still, there is already evidence of some media companies making a dangerous, fast grab for market share with deeply discounted rates which many warn will take years, if ever, to recover from the new rate baseline.   

Val Morgan Managing Director Guy Burbidge says he had agencies to look for cheaper deals when it came to above the line media given the “forecasted reduction in ad spend due to COVID”.

However, he is taking a more value-based approach to client conversations rather than a cheaper price compensation decision, adding that there is no value for cinema in driving CPMs down by 30 per cent.

"We are open to working with key agencies and clients on this to ensure that the value is appropriate but I'm looking to rebuild the business and simply hacking away at the CPMs isn't a route we’ll be taking for the long term progress of the business, the medium and our people," Burbidge says.

The radio daze

A sector that heavily relies on the daily work commute, radio was one of the first that felt the pinch of the pandemic.

Metro radio ad revenue has fallen by up to 50% since the lockdown began and while digital audiences are booming, traditional audience peaks throughout the day, breakfast and drive have changed .

Gallagher says radio was impacted most heavily in the SME sector which was forced to slash ad spend immediately.

According to data from the Commonwealth Bank, credit card spend is up 5% nationally from this time last year, which Gallagher says has predominately been spent with local business. The data also showed a tilt away from online shopping since the pandemic began, as in-store spend grew.

It's a good sign for the radio industry, as local enterprise growth will signal a return to spend across metro and regional.

"We're certainly starting to see growth return, with each month improving on the last. September will likely round out the worst of it and we are already starting to see that with strong revenue support coming in at the start of October," Gallagher says.

"Discretionary expenditure is starting to return to normal. Then you've got an impending domestic tourism boom by the likes of which has not been seen before. There's a lot of pent up boredom and cash seeps into the travel market, which is going to have a particularly attractive impact on our regional market."

Gallagher says one of the positive areas for SCA throughout the pandemic has been the double-digit growth for digital radio and podcasting.

He says the number of briefs coming through for addressable audio has more than doubled over the last three months and is continuing to prove its value as audience adjust to a more casual listening experience.

As for the more traditional radio trends of breakfast and drive, Gallagher says there are positives and negatives.

While it is likely the major networks will experience a return in audiences for those key slots, the benefits won't be felt until September when what would have been radio survey six comes through.

At the moment, Gallagher says most buyers have only the first two surveys to use as a yardstick, which is why they have opted to use other areas of the SCA offering.

"We're not going to see an immediate benefit of the increase in people back on the road until another survey is released September when it returns to its normal schedule," he says. "But the media buyers are obviously anticipating an increase in commuter travel and we may see some of that spend as a result. Just not the complete picture," Gallagher says.

"I think if things keep going the way they are in relation to infections and so forth, we will see that concern start to tail off but we still need to wait until we have a defined measurement of what that is before we go to agencies."

Outdoor evolved: lessons to be learned

While obvious that outdoor was one of the hardest-hit during the crisis, Cook says it has also provided opportunities to better evaluate consumer behavioural trends.

He says that despite road signs and transport signage suffering, data from DSpark allowed them to better utilise other assets including retail and suburban signage.

"However, that was then and we are rapidly adjusting in-line with the restrictions. From our data, 50% of transport is back to normal and that represents a large part of our daily audience," Cook says.

"Public transport of course remains up to the discretion of each state, however, regionally we are pretty close to seeing all of our audience movement and behaviour return to normal and metro isn't too far behind."

Cook's biggest takeaway from the pandemic doesn't lie in revenue and audience he says.

He believes the outdoor industry has a bigger lesson to learn - safer and more protective contracts between media owners, vendors and agencies.

"We need to take some lessons from this in a similar fashion to what we did with SARS and how we approached contracts with airports," Cook says. "I don't think anyone is comfortably going to sit here today and say this is or isn't going to happen again."

Hopefully we'll learn and society will react quicker and better than we did over this pandemic and I think that will be the case. But I think it's going to be incumbent on out of home companies to look more closely on how they handle severely disruptive events outside their influence."

O'Neill says like everyone – the industry hopes this does not happen again, however it would be even more of tragedy if we don't learn and evolve from a societal and commercial perspective.

"It’s not about getting out of contracts, calling in favours and re-negotiating commitments. If uncertain times strike again, no matter our size or position in market, we will always look to work collaboratively with clients, agencies, partners etc to ensure we all have a future beyond the downturn and that we deliver what is right at all times."

Lights, camera, action.

For Hoyts Group CEO Damian Keogh, the return of cinema could not come quick enough.

Cinema is arguably the hardest hit channel of all as every movie theatre across the globe closed its doors.

Keogh says the ramifications could see the global box office down 40% year-on-year, while other reports have estimated losses at upwards of $6bn for 2020.

However, cinema-goers in Australia are in for a reprieve as the doors to Hoyts, Event and other smaller operators open from July 2.

There will still be restrictions Keogh says but remains confident that the rapid and positive changes to restrictions will only further benefit the industry.

"We will be open albeit with a limited ticketing system, based on a state-by-state approach. Expect to have more gaps between you and the next person, that's the easiest way to explain it," he says.

"Obviously with Hoyts we are lucky in the changes and renovations we made to our entire cinema network, in that we have a lot more clearly defined space between seats and those in front and behind you."

For the first three weeks, Keogh says the content shown will be films that were cut short during their initial run, with the first Hollywood production to hit the big screen being Mulan on July 23.

There are still global concerns over the future of production, as Hollywood searches for alternative shooting locations. Australia and New Zealand have already stuck out as obvious solutions and the local film industry is already calling out for increased funding to better serve those opportunities.

Earlier this month, Ausfilm boss Kate Marks told the Sydney Morning Herald it was already courting $900m worth of possible Hollywood productions.

Val Morgan Managing Director Guy Burbidge is confident in a serious return of not just audience eyeballs but advertising dollars.

A survey by Event Cinemas of over 20,000 active cinema-goers showed that once cinemas reopen, 94% of respondents intend to visit just as frequently, if not more often.

Burbidge says advertiser confidence is somewhat in-line with audience sentiment, and will continue to ramp up as major titles are released towards the back end of the year.

"We're really impressed with the level of engagement we are already getting and it's been very encouraging to see that some of them are also coming through from the SME market," he says.

"There's no doubt though that the fourth quarter is when things will really take off, as those big hits like James Bond, Wonder Woman, Black Widow and Peter Rabbit start to rollout."

Burbidge says the next step, and one of the reasons why he is against an ongoing lowering of CPMs, is to educate the market on the larger than usual slate of content that will be screened for the remainder of the year.

"There's no doubt there will be an almost 'overload' of content to come out of this and as audiences have now gone through every level of content available on streaming and primetime TV, we are excited by the expected bounceback of movie audiences as they yearn for the social experience of cinema again."

As for the takeaways for cinema, Burbidge says trading flexibility will now be at the core of how the business operate in the immediate future.

Using the shutdown to reorganise and streamline sales processes, he says agency partners will now have "peace of mind" know that contracts and campaigns will be easily shifted, paused or delayed, should any external impacts emerge going forward.