It’s a sign of the times. Retail brands are shifting where they spend their advertising dollars, making for some eye-watering percentage changes for some sectors – and a reason to party for others. On the face of it, the print industry looks to be doomed, while the digital sector and, perhaps surprisingly, cinemas should be cracking open the bubbly. Lucy Clark looks at the figures and investigates the stories behind them
I won’t win a Pulitzer prize for investigative journalism by stating that the digital sector has had a bumper year.
Gaye Steel, marketing director at in-store retail communications agency Guihen Jones, says: “As Australian consumers are embracing digital commerce, retail advertisers have moved their budgets to start matching consumer behaviour.
“While traditional media will continue to have an important place, the shift to digital is inevitable because consumers are now connected to the internet everywhere they go. At the hear of all this is an informed, resourceful and connected consumer. Today’s shopper is potentially the smartest in our consumerised history.”
Australia is one of the most mobile-penetrated countries in the world, so it’s little wonder advertisers are moving to match this.
“Many bricks and mortar retail advertisers have traditionally viewed digital advertising as a minor part of their media mix, almost an afterthought,” says Stephen Scheeler, head of ecommerce, retail, automotive and QSR at Facebook Australia. “But this unprecedented rise of mobile in Australia has made this thinking dangerous.”
Retailers are, more and more, putting mobile at the centre of their advertising strategy. Scheeler predicts they will also embrace online ‘feeds’ and invest more in “the art of digital discovery.”
Mini Cullen, commercial director at social media curator Storify, explains: “Over the last 12 months we’ve seen a rapid growth of investment in content and marketing on digital platforms as retailers connect with their online audience in new and meaningful ways. This trend will continue in 2014.”
But should the SMI figures, and the worrying picture they paint for print, be taken at face value? The figures only take into account media agency spend. So what are the stories behind them?
It’s no surprise that the percentage changes for magazines make for gloomy reading.Peter Zavecz. director of magazines at Pacific Magazines, admits: “Magazines have been in a challenging market for some time. The total market is down 20% so retail is performing better than other categories. But no-one is happy about it.”
Zavecz blames the steep decline, in part, on newspaper-inserted magazines being lumped in the same category as paid-for magazines.
He adds: “Media agencies have seen print media as a soft target and have over-reacted. We believe we have been unfairly put in the same bucket as newspapers, as the transition to online has been much greater for newspapers than for magazines.”
Bauer Media’s director of sales, Tony Kendall, meanwhile, says: “Part of the shortfall in magazines, from our point of view, was the closure of Grazia and Madison. On top of that, the drop was driven by discount department stores that have needed to clear stock through short-term price discounting. Magazine deadlines don’t help there.”
Zavecz also points to more figures – which are, he concedes, estimates – from Nielsen.
“Nielsen’s data includes smaller agencies and direct clients,” he says. “It says that overall, when you include direct and smaller agencies, retail is down by 8%. Newspaper-inserted magazines are down 17%, and paid-for magazines down 6%.”
So how are magazines fighting this decline? “We have addressed a number of concerns from the media agencies about transparency of readership and circulation numbers, and timelier reporting of data,” says Zavecz. “And we are working with our TV partners at Seven West Media and digital partners at Yahoo to ensure magazines are included in the multimedia schedule.”
Bauer is planning better audience engagement through research initiatives “with a focus on how magazines connect with Australian women”.
Kendall is confident that new arrivals in the retail space Down Under will also help. “Next, Topshop, and H&M are entering the market and have made commitments to magazines in the next 12 months.”
The story for newspapers is different. For a start, the SMI statistics don’t provide the complete picture. Simon Baty, research and insights manager at The Newspaper Works, explains: “SMI only takes into account 30% of our retail spend. The SMI data comes from the media agency billing system, so it captures everything that comes from media agencies, but it doesn’t capture advertising that is booked directly with newspapers by advertisers.
CEASA (the Commercial Economic Advisory Service Australia) takes into account 55% of retail spend and puts the last fiscal year’s retail advertising spend in newspapers at $829,682,000.
Mark Hollands, The Newspaper Works’ CEO, adds: “There are definitely dollars moving between print and digital, but the fall in revenue is nowhere near as dramatic as cite in these SMI figures. Eighty per cent of Australians are reached by newspaper media (print and online) every month. There is hardly anybody who has disengaged from the whole thing. No self-respecting marketing manager can ignore that.”
Newspapers are working out how digital and print compliment one another for their advertisers.
Innovation is going to be the key to further growth, as Hollands says: “We would like newspaper sales teams to be encouraging innovation, and discussing the power of innovation in print with clients and agencies.
According to cinema advertising firm Val Morgan, retail brands did not traditionally advertise on the big screen – but they arrived with a vengeance in 2013, thanks to some compelling research.Dan Hill, chief revenue office at Val Morgan, outlines: “In 2012 we researched what people do after they go to the cinema. It emerged that 37% of people go shopping for groceries immediately afterwards, and another 30% go to eat or drink. We took that research to market and it resonated.
Woolworths, Wesfarmers and clothing retailers now advertise in cinemas. “I think we will now start to see the FMCG brands advertising in cinemas too,” says Hill.
He also cites the digitisation of cinema, which radically reduced the speed on screen, as a boost to retail advertising on the big screen. And the introduction of CineTam last year “provides a robust planning capability for agencies and clients”.
Interactive campaigns have also been big cinema hits, luring retail brands in. Cenovis ran a campaign that featured 3D motion recognition game on the cinema screen, and Nescafe’s 4D campaign saw the scent of coffee infused into the cinema.
“It’s not just about putting gan ad up on screen anymore,” concludes Hill. “There is the ability to connect with the consumer between the cinema seat and the shopping aisle.”