Is the ad industry down under going down under? - MARKETING Magazine Asia


Is the ad industry down under going down under?

Image source: World Economic Forum

Unprecedented situations by definition result in outcomes we are more often that not, unprepared for. A pandemic that forces people around the globe to stay at home opens up a plethora of consequences and while almost every nation’s economy takes a hit as a whole, some industries face challenges bigger than others.  

Last week News Corp Australia closed the print editions of its 60 community titles as its chairman, Michael Miller announced he would turn those newspaper mastheads to digital-only products because of rapid declines in advertising revenues caused by the COVID-19 pandemic.

According to The Age, these print newspapers’ survival was dependent on advertising from local businesses; that too closer to a life support kind of survival. 

In a statement by News Corp Australia, Michael stated that the impact of COVID-19 on the community print titles came on top of the toll on media from the refusal of digital platforms to pay publishers to use their content.

The Manly Daily is one of News Corp’s print products now on pause
Image source: Mumbrella Australia


“Australian media is passing its tipping point,” Michael said to The Sydney Morning Herald and The Age. “When you look at the financial positions of Ten, Seven, Southern Cross, oOh! Media, Nine’s broadcasting unit, potentially you will have less voices in the market and that’s inconsistent with what Australia Competition and Consumer Commission (ACCC) chair Rod Sims said two days ago, that we need to ensure there is healthy competition that comes out of COVID-19.”

Michael is concerned that the current situation would mean less voices are heard.

According to The Age, Rod calls the circumstances surrounding Australia’s media companies a “one-two blow” seeing that their revenues have been decimated this past decade by digital giants Google and Facebook. 

According to Mumbrella Australia, if newspapers are to innovate and flourish beyond the pandemic, they need to be acknowledged and supported as an essential service. 

As the industry faces its biggest downturn in decades, News Corp has called on the federal government to urgently force digital platforms Google and Facebook to pay for journalism. Australian media companies are also urging brands and advertising agencies to stop blocking digital advertisements that appear around COVID-19 news articles. 

The commercial radio industry is also looking to the government for some form of a crisis relief package, to help broadcasters handle falling ad revenues amid the pandemic. According to Mumbrella Australia, industry body Commercial Radio Australia (CRA) has already put forward a package of options to Australia’s Communications Minister Paul Fletcher, with the focus on lessening regulatory constraints and compliance burdens.

“We also call on the Federal Government to divert a proportion of its marketing spend from global digital platforms to local Australian radio at a time when it is needed the most,” said CRA CEO, Joan Warner. “Radio is the most local of all media; the targeted community service, sense of community and live and local content that we provide can’t, and won’t, be replicated by global platforms such as Google and Facebook.”

Commercial Radio Australia (CRA)’s CEO, Joan Warner says the commercial radio industry needs help
Image Source: Mumbrella Asia

According to Mumbrella Australia, Southern Cross Austereo (SCA), which delivers entertainment media solutions across a portfolio of Australian multimedia brands, has begun raising $169m in fully underwritten funding in a bid to keep itself afloat during the economic crisis caused by pandemic. 

Besides that, it has flagged further cost cuts, with tens of millions to come out of marketing, programming and other costs, leading to reduced marketing and promotions, less spend on programming, and reduced travel, entertainment, conferences and equipment upgrades.

Quoting Mumbrella Australia, “if coronavirus has an upside, it is reminding us of the essential importance of social order and connection at both institutional and individual levels.”

The devastating challenge facing the Australian media companies – which similar to in most countries, plays a central role in a community’s livelihood – is just the beginning for what could be the reality for many media houses around the world. The next set of actions from relevant authorities will determine the industry’s recovery period, if it lasts to see one.


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