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Panpa Bulletin : May 2007
20 PANPA Bulletin May 2007 advertising As advertisers, media agencies and publishers we are all in the process of re-engineering our businesses to take advantage of the chaotic change brought about by the digital technology revolution -- however the advertising sales end of the newspaper publishing business is changing very slowly. So how can newspapers make them- selves sexier to advertisers and agencies? To answer this complex question I will cover three topics: 1What is happening with audiences in the digital era and what's important to us as agencies and advertisers. 2What impact has the digital era already had on your business? 3What you need to change to continue a long and profitable relationship with advertisers and agencies? Digital change Digital change has thrown a large rock into the largely placid billabong of tradi- tional media consumption. As consumers and individuals our media repertoires have changed and will continue to change as a result. As marketers our business models and the communications channels and techniques are changing to fit. A clear recognition of the latter came at the end of last year when two of our great icons of communications, Time Magazine and AdAge, both made consumers their heroes of the year. Time Magazine awarded its Person of the Year 2006 to 'You' and AdAge awarded Ad Agency of the Year 2006 to 'The Consumer' Why? Because digital technology is gradually placing the consumer in con- trol of entertainment and the informa- tion industry. Australia is behind the pack with this process, but is fast catching up and hope- fully the new media legislation which comes into effect this year will accelerate the process. But legislation or not, Australian consum- ers love technology and aided with this they are already leap-frogging over any obstacles in their way to get the information and enter- tainment they want when they want it. Here are just a few recent Australian statistics to prove the point: • More than 70 per cent of the population have an internet connection at home, • 60 per cent of connected homes have broadband, • 80 per cent of the population own a mobile phone and send over 14 million SMS messages a day, • 81 per cent of the population own a DVD player, • More than 3.4 million MP3 players have been sold, • 2.6 million digital set top boxes have been sold, • Two million plasma or LCD TV's have been sold, • Mobile internet is on the move with growing uptake of blackberries and wireless broadband. The good news is that these devices are encouraging consumers to spend even more time with media, and what's more it is quality time, because they have more power to choose the media content THEY want whenever THEY want it, plus many of these devices are mobile so that people can access media in almost any location. The key word here is engagement -- a big unrealised opportunity for newspapers . Digital choice is also giving us the op- portunity to classify consumers in new ways and make that the priority for targeting. More and more consumers are being de- fined by their interests and attitudes rather than their demographics. The targeting priorities are being reversed. The main driver of all this change is the power of choice that has been handed to the consumer by digital com- munications technologies. Rupert Murdoch demonstrated he could clearly see this working among the younger generations, in particular Gen Next and Gen Y, when he purchased myspace 18 months ago. At the time, he said: "Young people don't want a godlike figure from above to tell them what's important. They want control over their media instead of being controlled by it." The investment has really paid off -- the myspace purchase price was US$580 million but analysts say it will be worth US$10-20 billion in a few years. The trend we see is that the marketplace is evolving from a purely mass market to a niche nation fuelled by digital choice. This applies to all forms of entertain- ment, information, products and services. Attracting agencies and advertisers Speaking at the PANPA Ad Forum in Sydney in March, Harold Mitchell, the chairman of Australia's leading independently owned media planning and buying agency, Mitchell & Partners explained how newspapers can be 'sexy' to agencies and advertisers. Highlights of his speech are reproduced in this article.