What you need to know: 

• Airtasker aims to replicate the success of a 2016 equity-for-media deal with Seven West Media, this time looking to audio via ARN and outdoor via oOh!media to drive brand salience in the Australian market via $11m worth of inventory on a pay later with interest or equity deal.
• The choice will be down to Airtasker, and if all goes to plan, CEO Tim Fung said the latter will be unlikely.
• The brand gets the opportunity to drive much needed brand salience while gaining a share of voice boost as others pull back marketing spend, without the strain on cashflow or having to raise in a tough market.
• Airtasker needs to boost takings in Australia to help fund its expansion into the UK and US.
• Fung thinks traditional media stands a better chance of delivering that boost than the likes of Youtube, Google and Meta. It’s less cluttered and more trustworthy, he said, and OOH is “unmissable”.
• Some media owners suggest taking minority stakes for inventory weigh too heavily on cashflow to be worth it. But ARN agency sales chief Angus Leech thinks the longer-term payoff will go beyond the deal – though he said ARN has no plans to make a habit “at scale”.

Share economy

ASX-listed gig economy platform Airtasker will launch a major brand play in the back half of this year, bidding to use $11m in media across radio and out of home to boost its Australian business – and in turn fund its UK and US expansion.

Deals struck with audio network ARN and outdoor business oOh!media have given the Australian-founded tech business advanced access to a respective $5 and $6 million in media spend in exchange for delayed payment in either cash or Airtasker shares.

In financial terms, that’s a two-year convertible note with a 5.8 per cent coupon rate, which at maturity, Airtasker can elect to pay in full or convert into ordinary shares at a 10 per cent discount to its 30-trading day volume-weighted average share price.

Or as the firm's founder and CEO, Tim Fung put it: “In two years’ time, we pay them back the $5 million with interest rate of 5.8 per cent ... or we can choose to give them shares based on the share price at that time”. Airtasker struck a similar deal with UK broadcaster Channel 4 six months ago, which according to first half results for the 2024 financial year delivered a 30 per cent lift in ‘posted tasks’ – i.e. people using the platform to get jobs done.

Media models

The media for equity/on tick model appears to be on the rise – Scaleup Mediafund, owned by News, Network Ten, Nova, Foxtel, FoxSports, oOh!Media and REA and run by ex-News and Foxtel exec Michael Lamont, has struck and managed similar deals for 17 start-ups since launching in 2017 (though played no part in Airtasker's latest arrangement). 

In Airtasker’s case, the ARN and oOh!media deals make way for its first local above the line (ATL) effort in two and half years, and the brand is hoping to build on the brand awareness it kick-started through its 2016 equity deal with Seven West Media. Over the five years of that arrangement, Airtasker grew 20x, while Seven gained a 5x return when cashing out at IPO for $50m.

Fung has said the deal saw brand awareness move from roughly two to 25 per cent in the space of six to 12 months. Today, he says prompted brand awareness sits at around 64 per cent.

“It was one of the best partnerships and moves that we made in the history of Airtasker,” Fung told Mi3 after the company went public in 2021.

This time the deal structure is different deal and Fung said it’s unlikely that the brand will be giving away any shares in two years’ time.

“We actually have plenty of cash on our balance sheet,” per Fung – $17.1 million in cash and term deposits at 31 December 2023. That most likely means Airtasker will “repay the note in two years’ time ... Therefore, what it represents is really a forward promise.”

It also represents a growth bet that the current crunched consumer economy – which poses a challenge for marketplaces reliant on people paying 'taskers' when household budgets are under pressure – will have lifted by then, in turn boosting Airtasker's market cap.

Right now, "the share prices for growth stocks are not favourable," he acknowledged, "so you don’t want to raise money on today’s valuation.”

ESOV play

Fung is also aiming to capitalise on budget cutting by rivals and more generally to get a larger share of voice as brands "pull back – they are getting more shy because of the current economic environment".

Going large when others shrink provides greater opportunity to drive brand salience, per Fung. “We need our unprompted brand awareness to be much higher, i.e. when you see that your bathroom is dirty, or you see that your tyre needs to be replaced, or you see that your drone is stuck in a tree, we need Airtasker to pop into your head straight away.”

“Lots of people know Airtasker, but are we top of mind? That’s what we’re trying to drive”.

Performance media, he suggested, won't deliver that kind of win.

"The digital space is incredibly crowded and fragmented”, he told Mi3. "Platforms like Google and Meta have lowered the friction to be able to advertise – you can advertise one ad for 20 cents [on those platforms]. What that has done is invited a lot of smaller, less trustworthy brands onto those platforms. Whereas outdoor media is filtered for trustworthy brands at scale. And it's unmissable.”

The likes of Canva agree – but while a lot of start-ups have realised that the old 'growth hacking' playbook is well out of date, Fung suggested not everyone in tech has got the memo.

"A lot of people in the tech community are a little bit apprehensive about investing in above the line media. A lot of them have been trained [to think that] Youtube and Google and Meta are superior forms of marketing … and they can be great forms of marketing as well… But actually outdoor media, audio media are really powerful mediums as well – and I think we have probably swung the pendulum quite far towards smaller scale digital media."

Airtasker will be able to activate its new stock of outdoor and audio inventory as they wish, and Fung said the brand has something cooking for the back half of this year.

“In spring and summer in Australia, you’ll be seeing Airtasker much more around the place. Hopefully we can paint the town Airtasker blue.”

Sound partnership

The upside to what is effectively a deferred payment term is a little more cloudy on the media owner side. Cashflow is ever important in an already strapped advertising market. But according to ARN’s national agency sales director, Angus Leech, there’s a few key draws in a media partnership with a brand like Airtasker.

First, there’s the potential for an ongoing relationship. “We see Airtasker as a new client to audio, which is always exciting, bringing a major brand into the fold,” Leech told Mi3. “We look at partnerships with a long-term view, and we're really impressed with how the dialogue was going with Airtasker, and I think we'll continue to work with them for a long time."

Second, he says there was a natural alignment between brand and content “Airtasker felt like it would fit in the fold very organically, which made the deal a nice fit for us”.

The third piece was the potential for a shiny new case study that demonstrates what ARN’s assets can do for a growing tech brand. Per Leech, “it allows us to showcase the strength of ARN” across broadcast and digital. “Airtasker wants to have a proper footprint across Australia, and we think we can do a very good job of making that happen for them.”

The reality is that within a soft market, it converts potentially idle inventory into revenue for ARN and oOh! – even if the pay day is two years' off. But some question the strategy, with one media chief saying their company has no interest in similarly structured equity deals – in their view, the cashflow impact isn't worth it.

For the same reason, Leech said ARN has no intention to “actively ramp up” on this front.

“At the end of the day, we're a very commercial business, and we'd assess every partnership on a case-by-case basis. This one was really complimentary and made sense. So it's exciting to move forward with it, but I don't think it would be wise to make that something that we're trying to do at scale.”

oOh! declined to comment on its strategy.