MEDIACOM Marketing Digest 6 October 2004

MEDIACOM Marketing Digest 6 October 2004

6 OCTOBER 2004

It's War The ink is barely dry on the first edition of the Herald on Sunday, and already the war of the words has begun.

Fairfax NZ CEO Brian Evans has described as "outlandish" claims by HoS publisher Rick Neville that the first edition of the new tabloid sold well over 100,000 copies.

Mr Evans pointed out that the HoS had given away at least 50,000 copies free of charge.

The press release rumbles on, but we think you get the drift. Fairfax aren't about to surrender the Sunday market without a battle. For its part, the Herald on Sunday has just begun the fight. At stake, apart from the lucrative advertising dollars and the hearts & minds of readers: bragging rights and a fair degree of mana. This is, after all, the most significant newspaper launch in at least ten years.

As for the paper itself, there's already no shortage of opinions on the merits or otherwise of the first edition.

It's unlikely any first issue could measure up to the hype and hoopla promised by the build-up. And various commentators have criticised this or that aspect. We're going to go against the trend, and rate it as living up to our expectations.

In what ways? Well, firstly because the HoS feels more like a magazine than a newspaper, despite the format. The stories are background pieces, leisurely in pace, not hard news. If you were expecting crack investigative journalism, sorry, this was never going to be the vehicle - that's a role that newspapers have largely abandoned to the 60 Minutes of this world, despite the endeavours of crusaders like Pat Booth in the glorious past.

What else? A bulky sports section that focuses on the national religion, rugby, almost to the exclusion of anything else - appropriate for the market. A kids' comic section led by a cartoon the kids actually know about, The Simpsons. A 7-day newspaper TV guide that carries enough channels (including 19 Sky channels) that viewers can plan their week's TV without referring to SkyWatch. Paparazzi pages, with revealing glimpses of Z List celebrities. Two pages of weather, for the meteorological junkies. Quirky back page trivia. And an unashamedly female SundayLife magazine, light and frothy but substantial enough to compensate for the alpha male-targeted 36-page sports section.

Our conclusion, based on a sample of one issue: the Herald on Sunday has successfully carved out a niche of its own. It's a style suited to the less frenetic Sunday reader environment, and doesn't directly compete with the other Sunday papers (except in terms of share of wallet). We would read it, as we read other magazines, for opinion and comment, not news. Overall, the new publication draws its inspiration from a blending of international formats, applied effectively to local content.

Would we recommend advertising in the new publication? Sure, for the right target market. Instead of another Sunday paper? Probably not, unless the HoS pencil is particularly sharp when it comes to rates vs readers. Overall, we'd expect the HoS to start by cannibalising ad dollars originally intended for the Herald Weekender, before pulling in dollars in its own right.

The Mobile Teen An Australian survey has found that 89 per cent of teenagers aged between 13 and 19 in Sydney and Melbourne have mobile phones.

The survey of 600 teenagers also found that 68 per cent of them admitted they did not follow a budget plan to limit the amount of money spent on calls or text messages.

Most teenagers with a mobile phone had a pre-paid account which was favoured over a monthly plan by 63 per cent to 28 per cent, according to the survey.

The average monthly amount spent on pre-paid phones was A$32.

And 43 per cent of teenagers on a pre-paid credit account top up as soon as their credit has expired, with only 14 per cent saying they waited until they had next planned to buy more credit. When teens did buy more credit, 21 per cent said they had to get their parents to pay for it.

It was already evident to any casual observer that the cellphone has become a vital component of the teen lifestyle, here in NZ as well as around the globe. This Australian data reinforces that conclusion, and highlights the amount of disposable income soaked up by the must-have gadget of the new millennium.

With the latest generation of cellphones, 3G, now rolling into New Zealand, can't wait to see what the phone bills are like in a couple of years ....

The Juggernaut Rolls On The Radio Network continues to colonise the world - this antipodean chunk, anyway - with its various brands. Over just the last month or so, we've seen Hauraki networked into Wellington & Whangarei, ZM into Timaru & South Canterbury, Coast FM to Tauranga & the Kapiti Coast, Newstalk ZB to Queenstown, Alexandra & Wanaka and urban legend Flava rapping into Hawkes Bay.

On the one hand, we might lament the fragmentation of the regional landscape, as listeners around the country are divided into ever smaller audience segments. Want to reach a critical mass in Whangarei? Now you need to add one more station to your buying list.

On the other hand, these new stations better serve the interests of consumers in the smaller centres, whose musical tastes are just as diverse as their metropolitan colleagues, even if they've previously lacked a station that would meet those needs. If your target audience is anyone other than "all people", you're now a little bit closer to the utopian ideal of reaching your target nationally through an appropriate radio strand.

There's just one potential flaw in this thinking, alas - and that's the presumption that those who programme the various networks are consistently able to deliver the content best suited to listeners throughout New Zealand. Which is why a market exists for the independents - the BFMs, George FMs and Mai FMs of this world, who decry the uniformity of commercial radio and proclaim their own alternative offerings.

Our own take: that the relentless networking of the national brands, especially into regions previously served by stations that enjoyed a dominant market position, is eroding the "local" strengths of radio in favour of vertical (national) segmentation. As a result, radio will become less and less cost-effective for local advertisers, but more effective for targeted national campaigns.

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Online Advertising Builds Brands The European Interactive Advertising Association (EIAA), the pan-European trade organisation, last week announced the results of the largest ever consolidation of online branding studies in Europe.

The study, conducted by Dynamic Logic, suggests that online marketing works as a means of building brands and increasing purchase intent. It also reveals that online advertising has a slightly more significant impact on FMCG brands, a sector not traditionally seen as a widespread adopter of online marketing.

The EIAA Study of 200 online campaign reports, including responses from over 160,000 people in Europe reveals that, on average, online campaigns were responsible for a 5.4% uplift in brand awareness, a significant lift above the existing high levels of brand awareness (69% amongst the brands analysed). The increase in brand awareness is evident across each of the vertical sectors analysed, with FMCG online campaigns registering a 5.9% increase, automotive 5.7% and electronics 3.4%.

In addition to brand awareness, the report also reveals online campaigns raised ad recall by 45% on average across Europe. Message association saw a 21% increase whilst brand favourability rose by 5.7%. Again, FMCG campaigns surpassed other sectors studied with a 9% increase in brand favourability.

What does it all mean? A tale full of sound and fury, signifying nothing, to borrow the cliché - nice to know that online advertising can build a brand, but you'd be hard-pressed to find an advertiser today who would settle for that result from online activity. Online is about interactivity, accountability and results, about building relationships with users, not "making them aware of you".

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ENDS

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