You need to know this: 

• PwC's Justin Papps says "meaningful measurement" is on the rise. "We've seen clients with 26 dashboards they look at everyday" but they still "might miss the big picture"
• Papps says the market should emerge from "the funk of the last 6-12 months" but media owners will see growth diversifying outside of advertising

• Papps believes firms that have cut-back marketing investment will need to reweight brand building programmes if they want to grow in tandem with a rising economy. PwC is making that case to the c-suite and boards

• Nine's Michael Stephenson says "it's not quite rivers of gold but I definitely think it's a more positive outlook" for the December half
• Omnicom Media Group's Kristiaan Kroon sees an improvement for the December half and a return to growth in 2020
• Southern Cross Austereo's Brian Gallagher believes new regulatory developments around data "will democratise the platform argument".
• All four execs agree a renewed debate around the role of reach and brand building is becoming more sophisticated
• Kroon says media owners have "not been given enough credit" for how they have adapted to a digital environment 

To hear the live debate between these execs, representing $4 billion in media and marketing clout, listen to the 25 minute Audio edition here. It's a rich, nuanced, smart industry discussion. And perfect when you're on the go.    

Is the media funk lifting?

Against the background of a sluggish economy and the cyclical round of cost cutting that has seen top of funnel short-termism trump brand building, PwC’s Media Outlook sees internet advertising – chiefly Facebook and Google - continuing to hoover up ad dollars for the foreseeable future (PwC forecasts by media sector to 2023 are here).

But media owners and buyers think the tide is turning and they don’t think the digital duopoly - in the face of privacy pressures and marketers’ increasing desire for greater value from first party data - will have it all their own way. After “paralyses by analysis” and focusing too narrowly on targeting, a return to marketing fundamentals may be on the cards, according to PwC’s Justin Papps. Nine’s Michael Stephenson, SCA’s Brian Gallagher and Omincom’s Kristiaan Kroon also see opportunity for Australian media companies.

That said, PwC still predicts most of the money will go to the tech platforms. 

“Yes, that is definitely the case,” says Papps. But with Amazon bedding in to Australia, the days of duopoly may be numbered. “Amazon is not going to be a small player by any stretch.”

How the platforms “sort themselves out” in the aftermath of the ACCC’s report could also impact market dynamics.

A return to reach?

Nine’s Michael Stephenson and SCA’s Brian Gallagher suggest that their investment in digital channels and measurement will deliver growth regardless of PwC’s predictions, whether through non-linear television or through podcasts, or other digital formats – and that marketers now realise micro targeting at the expense of reach may have gone too far.

“You see a lot of people pulling back, unsure whether they’ve actually lost more than they’ve gained in the process of hyper targeting their audiences,” suggests Gallagher. “What we’re starting to see is sensibility return to the market about the purpose of reach,” he says. “Reach is becoming more and more important.”

But Gallagher admits that there is work to be done to make transacting as slick as buying from the platforms.

“We haven’t done that. So if we can measure more effectively our audiences across platforms and couple that with technology that allows us to be [bought via a dashboard] … then we have probably the two things that would protect us a little bit from some of that outflow [of dollars].”

Nine’s Stephenson points out that all of the local Australian media businesses have invested in “complex data infrastructures to make advertising more effective and more efficient”. They are all, to an extent, ‘internet’ businesses and their investments are starting to pay off, he suggests - particularly as advertisers seek partners that can help them better leverage assets.

On the reach argument, Omnicom’s Kroon says it is non-binary, that marketers, particularly large brands, need to go both broad and narrow to drive growth and conversion. But he agrees that Australia’s media companies can start to turn the tide by leveraging their investments and taking advantage of the challenges now encircling the FANGs.

Big tech feels a different sensation

“I think there is pressure on big tech,” says Kroon. “In the last four to five years, there’s been a huge investment by traditional media in Australia - and I don’t think we give Australian media enough credit for how it’s adapted to a more digital age.” Publishers in the US and the UK are “nowhere near” their Australian counterparts, he suggests. 

Meanwhile, Amazon is coming into the market, Salesforce and Adobe are gunning for other parts of the marketing stack – and marketers want partners that can help them not just wring value from their data, but enhance it.

“Clients have come to understand their own customer data. So when they advertise, they want to grow their understanding, to enrich what they know. Google and Facebook don’t work that way,” says Kroon. “You can enter their ecosystem and you can activate, but it’s very difficult to take that data out and add it to your own.”

Given the “Catch-22” Google and Facebook find themselves in with antitrust and data privacy investigations around the world, Kroon thinks local media may be able to regain some lost ground.

“I do see some changes from Google and Facebook. They’ve still got the momentum for now. We’ll see what the ACCC says in a couple of weeks. But I think the Department of Justice investigation in the US is serious for them … with the CEOs talking about it over the weekend and feeling they need to be on the front foot. That’s an interesting backdrop for them,” says Kroon.

“You’ve got new platforms [making inroads]. You’ve got the local operators improving where they are. If data is the new currency, as clients reach the second stage of wanting to enrich data, where do the platforms play in that?  They might be the tech provider, but not necessarily the strategic partner.”

Does Kroon sense that local media owners might be more malleable and willing to share data?

“I think where there’s a fair value exchange, yes. If everyone’s handling the data correctly, I think there is more willingness to do that - whereas a global business can be hamstrung by the strictures that are placed upon it.”

Measurement rising

Across all of the interviews conducted with marketers for PwC’s outlook, “the thing that we saw was that the businesses that are going to grow over the next five years are the ones that are not defined by their legacy platform”, says Papps.

But as ‘legacy’ media diversifies, he and Kroon agree measurement is critical to achieving that growth – and providing it to marketers in a way that extracts the signal from the noise.

“I think having multiple touch points as a very large media owner becomes very important to help a CMO get where they need to,” says Kroon. “The other challenge is avoiding paralysis by analysis. So much information comes at our teams, at CMOs, internal data as well. How do you bring that back together in a coherent plan but still structure around the fundamentals that have been in place in the past?”

Nine’s Michael Stephenson believes VOZ, the incoming ‘total TV’ metric, will provide marketers with a clearer picture.

“VOZ gives us the ability to measure cross-platform reach and frequency across both live linear television and BVOD. It will also give us the foundation to be able to deliver or trade against audience segments as well as age and sex demographics,” says Stephenson. “So, I think the ability to measure both of those things via a single panel from an independent third party is really, really important and a big step towards the future.”

PwC’s Papps agrees – and thinks it will help marketers rediscover disciplines cast aside in recent years.

“Michael’s point is really important. We spend a lot of time in the outlook report talking about reach. One of the things that we see behaviourally is, in some instances, those fundamentals of marketing are sort of being lost [with regard to the importance of reach]. But we also talk about the complementary nature of all media working together - and to Kristiaan’s point - it’s not binary,” says Papps. “It’s ‘how do I use all of these pieces together to really drive that reach?’ The fact that we’ll be able to measure it is probably the biggest step forward I think we've had for the media industry.”

Speaking to CMOs about VOZ, Papps says they are “absolutely dying to get their hands on this, because it removes the subjectivity and they can actually get a true view of how all of these things work together … I think that’s where it gets exciting”.

Breaking the cycle

PwC’s outlook predicts overall growth, but won’t set pulses racing for many media owners. The forecast follows a gruelling start to 2019, with first quarter agency bookings back -4.2% year on year. The macro economic picture has led to business cost cutting, with marketing budgets in the CFO’s crosshairs. 

Papps says the “education piece” PwC and others undertake with CEOs and CFOs “is helping them understand marketing as a driver of growth, not a cost”. 

If that’s the case, why does marketing as a growth lever have to be re-explained every few years?

“I don’t think it’s ever been easier to actually track causality between marketing activity and sales,” says Papps. “That said, we’ve got to make sure that whoever is in the boardroom understands long-term brand building and short-term growth - because I think you can get distracted by the short-term activity.”

Kroon says CMOs “get it” when it comes to achieving a mix of short and long-termism in marketing, but that proof points for their individual businesses are required. “That is a gap we need to close together.”

Nine’s Stephenson says it is incumbent on diversified media owners “to prove the power and effectiveness of all of the channels individually and also how all of those channels work together to deliver both of those outcomes, long-term brand building and short-term sales outcomes”. 

But should Australia emerge from the “funk of the last 6-12 months”, Papps believes firms that have cut-back will need to reweight brand building programmes if they want to grow in tandem with a rising economy.

Nine’s Stephenson says early shoots of recovery are already beginning to emerge. It’s not quite “rivers of gold,” he says, “but I definitely think it’s a more positive outlook”.

SCA’s Gallagher says his sales teams have been working all angles, particularly in the SME market, ignoring the oft-contradictory tales coming out of newspapers around the housing market and other key economic pillars that can impact business confidence. “We’re confident of a good July to December,” he says.

The year ahead

What should marketers – and the broader media supply chain – keep top of mind for the year ahead?

“My big tip is to keep that absolute laser-like focus on reach but [keep it] complementary,” says PwC’s Papps. “So, how do I use all of my media channels to really drive that reach as best as I can? Because for marketers, ultimately that’s what’s you’ve got to do: acquire new customers or grow your current ones.”

Papps says “meaningful measurement” is also key. “We’ve seen clients with dashboards that have 26 different factors that they look at everyday. But they might miss the big picture  … because they get so obsessed by [minutiae].”

Over the next year, Papps believes, “if there was a return to the fundamentals of marketing applied to the new world … that is where the wins are going to be”.

“We’ve come through a period of noise. Now it is about getting back to the fundamentals.”

That would be music to Michael Stephenson’s ears.

“It’s the reason why we are doing what we’re doing. We’ve created environments for brands to communicate key messages, launch products, launch variants; redefine marketplaces … enabled by the technology that we’ve invested in locally here in Australia; that’s been our model,” he suggests. All of which is “deeply rooted in the thing that is our competitive advantage: content.”

SCA’s Brian Gallagher is equally bullish, for two “fundamental” reasons.

“One is that I think regulatory protections that are going to come to consumers around their data will democratise the platform argument somewhat,” says Gallagher.

“I think it will help us because we’re at a point with our current data where maybe it’s not enough [on its own], but it’s gold standard and it protects consumers - and when we enhance it, it becomes even more important

“When we work together to have cross platform measurement that is protecting consumers, we become pretty eminent,” says Gallagher. “So, I feel very enthusiastic about that aspect of our business.”