Monday, June 23, 2008

Foreign Digital Expansion in Oz

A further call to Australian advertisers to get into digital technology comes with the news that French advertising business Publicis is to start a digital agency network Digitas in Australia in 2009.

http://www.theaustralian.news.com.au/story/0,25197,23905084-7582,00.html

Publicis global chairman and chief executive David Kenny broke the news at the Cannes International Advertising Festival and The Australian reporter Lara Sinclair was there.

Ms Sinclair saw this as evidence of part of a ‘land grab’ by global advertising companies in order to expand their own business to be the most successful on the international stage.

Publicis Groupe president Maurice Levy said reported that the group was "growing very fast in digital" and intends to create Digitas as a separate company to the Publicis group. He confirmed that growth would only come from digital.

Digitas was bought for $US1.3 billion in March 2007. It has been speculated that Publicis bought into digital because it did not have the experience within its original business. It has expanded from two offices worldwide last year, to 16 to date.

However, the main debate on digital between agencies is whether it should be contained in a mainstream agency group or kept separate.

Business chief executive Hamish McLennan, who is looking to buy into digital business, said ‘the internet was so entrenched in mainstream marketing it had to be central to an agency's operations‘.

Another advertising company has reported that it was best ‘to combine digital and mainstream’ media.

Further, company Euro’s marketing section has unveiled an operation that incorporates digital in advertising in New York. Global chief executive and former head of its Australian office David Jones said its inspiration came from a ‘Sydney model’, called so because it created by the Euro branch in Sydney.

Mr Jones went as far as to say: "I wanted everyone (in New York) to understand that this was the digital agency taking over the ad agency."

But there are other companies such as Publicis, Leo Burnett and Saatchi & Saatchi, and media networks Zenith Optimedia and Starcom MediaVest are creating ‘stand-alone’ digital companies to accompany their advertising companies.

Good news for Australian economic growth is Australian company Omnicom. Their digital business is earning 13 per cent.

More news that Australian companies are lagging slightly behind; while Australian advertising businesses will be facing an economic downturn in the near future, global companies are coming to Australian shores in order to expand on an international scale. But it’s not all bad news: it is good to see companies such as Australia’s Omnicom, are holding their own, and to see that Australians are at the forefront of innovation new synergy in Euro’s new branch. However, the advice is important for local advertising agencies to take note of – it seems the future of advertising is a combination of ‘digital and mainstream marketing’, whether this means stand alone companies, or companies that combine digital investment with their current advertising groups. Personally, combining the two disciplines makes more sense to me in terms of synergy. Evidence suggests the digital element of advertising will become inextricable, as noted in the Cannes advertising awards this year (see blog entry ‘Australian Advertisers Warned’).

Bad Press

According to The Australian reporter John Lyons, the Labor Party has gotten some bad press recently, thanks to Kevin Rudd’s senior media advisor Lachlan Harris’ aggressive nature towards the press, women in particular.

http://www.theaustralian.news.com.au/story/0,25197,23897344-7582,00.html


Reports have come from journalist experiencing intimidation from Mr Harris for writing a story he did not agree with. According to Lyon’s source he threatened to end her career. Another female producer felt humiliated by his response ‘Why are you ringing me to tell me this?’ during a call to update him that she would be taking on the production role.

The Sun-Herald's Kerry-Anne Walsh was told she could expect to", have 100 people ready to roll tomorrow morning to trash you and your paper", if a story she wrote about Rudd was printed.

He has told another person on his mobile ‘I'm on the other line, let me just piss this other call off’, whilst on a call to another female journalist.

During the press junket on Rudd’s tour of US, Europe and Asia, the seating arrangements on the plane, apparently made by the ‘RAAF’; males and females were segregated - men were seated in the front and the women at the back of the plane.

Incompetence has also been claimed, one incident occurring after sorry day had been announced another journalist was told Aboriginal Affairs Minister Jenny Macklin would be doing a doorstop at 11.30 that morning in Melbourne. Ms Macklin’s press secretary was told nothing until two hours before the meeting.

There are reports he has also offended Prime Minister Kevin Rudd; turning his back on Brendan Nelson during his reply to Rudd's apology on Sorry Day and refusing to wear a tie for a meeting with President George W. Bush.

This kind of evidence really speaks for itself. Clearly Mr Harris should not be in this position of power. This kind of behaviour is unacceptable towards anybody, be they male or female. What is of more concern is that he works with the press, people who respond to the public need for freedom of information. You would think that this, intimidation, rudeness and apparent sexism would be a call to sack any other worker from their job, let alone a job with this much exposure. Mr Harris, whose job it is to report to the press about the Rudd government and more to the point - as much as possible make the Rudd government look good - is doing the exact opposite with these abominable practices.

Sunday, June 22, 2008

Murdoch Fights Advertising Spiral

The Australian reporter Lara Sinclair says that the Rupert Murdoch owned News Corporation is set to beat the expected lack of advertising in print and television through the expansion of pay-TV in its European division – having bought 25 per cent the German Pay-TV company Premiere.

http://www.theaustralian.news.com.au/story/0,25197,23897228-30540,00.html

Mr Murdoch says that their involvement in the business will ‘more than compensate’ for loss in advertising in other areas. He has also hinted that revenue from this area will help fund other purchases.

Mr Murdoch is clearly expecting the loss in advertising revenue: ‘Our cable programming businesses are going to be a great profit driver for us in the coming years (if) advertising on TV stations and in newspapers has a hard time.' 'They will more than compensate.’

Mr Murdoch predicted a recession for at least two years, but expects the US to bounce back fastest, due to its ‘ability to innovate’.

He said the stress on advertising due to anticipated inflation would mean a ‘difficult couple of years’, and that ‘We’re all going to feel it in our business.’

However, he also indicated that many could take advantage of the situation and ‘increase our market share.’

Mr Murdoch is also owner of MySpace, and was at its relaunch in Cannes recently News Corp president and chief operating officer Peter Chernin said the changes would help usability: ‘It's much more about the user experience than it is about driving revenues.’

Neither Mr Chernin or Mr Murdoch are concerned about the programs rivalry with Facebook, Mr Murdoch calling it a ‘flavour of the month’ with MySpace doing well in the US in terms of advertising.

This is more confirmation that advertising is set for tough times. With Australia already set back in terms of expanding into such areas as internet TV, this could be a concern, particularly for those looking to start up companies any time in the future. While media moguls like Mr Murdoch may have other areas to expand to cover his losses, many Australian media companies, and certainly the smaller independent ones, may not. However, sharing his market knowledge could be helpful on that front, for those that have enough money to buy shares in a recession.

Further Mr Murdoch’s reports on MySpace and its need to please users instead of just extending the profit margin is in direct line with what Ross Dawson has said is what internet consumers can expect from the 2.0 version (see blog entry The Web we Weave: Australia’s 2.0) and is good news for anyone online. Hopefully our advertisers will keep this in mind in the construction of future internet campaigns to improve their chances of success in competing with the American industry.

Australian Advertisers Warned

Australian advertisers bring home four golds, seven silvers and 13 bronze Lions from the Cannes International Advertising Festival this year.

http://www.theaustralian.news.com.au/story/0,25197,23905102-7582,00.html

However, reporter Lara Sinclair points out that if Australian’s broadband infrastructure is not improved, our $12 billion advertising industries will not be able to compete on the world stage.

For us the winners this year were the divisions of Press, a ‘traditionally weak’ area that received a gold, silver and three bronze and Direct Marketing which also received gold, a silver and three bronze.

Advertisers won two gold Lions; one for a citizenship campaign starring rapper Snoop Dogg, and the Olympic campaign.

In Film, the impressive Schweppes balloon bursting slow motion also won a gold.

However, the worry concerning broadband came when only one silver was awarded in the Cyber section, particularly when ‘ almost every speaker at Cannes’ spoke about the ‘importance of incorporating digital thinking into advertisers' communications strategies’. It was also made clear that the future of advertising lay in ‘digital thinking’ and ‘storytelling’

Adding to this concern was any addition of an Australian finalist in internet TV and mobile TV categories.

Ms Sinclair points out that while ‘internet film is not a big feature of Australia's advertising scene’ it quickly needs to become one, to remain viable in the future.

More concern that Australia isn’t pulling its weight in the world arena. Not only are we lacking in new and inventive ideas in terms of internet programming, it seems advertisers are following suit. As Ms Sinclair points out, this may be due to the lack of support given by the government to expand on a fast-speed broadband infrastructure. It seems to be a continual concern, throughout this blog, that the government has not responded quickly enough in the areas of broadband or digital television. Hopefully the future will not see Australia being left behind because of these oversights. On the other hand, it could be a case of Australian culture not willing to try and fail in terms of new ideas or in this case, innovations on different platforms of advertising.

The Web we Weave: Australia’s 2.0

2.0 is the latest web application and the ‘current phase of the internet collaboration and interaction’.

A conversation with Ross Dawson, a Sydney-based media strategist and Chairman of the global consulting firm Future Exploration Network explored his involvement in the second annual list of Australia’s top 100 web 2.0 applications, held in collaboration with the finance magazine BRW.

http://www.abc.net.au/rn/mediareport/stories/2008/2272922.htm

Mr Dawson reports that over the last year there has been 'a proliferation of innovation in the web 2.0 space’. Not only are people creating programs to make money, but for more creative purposes as well. He says that seeing a number of the applications listed last year ago dropped out of this year’s list due to being sold, or ‘given up’, is ‘a sign of a healthy system, an innovative system where people stop things that don’t work and increasingly find things that work.’

He has noted that Australians wanting to start up a new internet business go overseas, particularly the US for funds, although there are communities that help fund the best innovation. He says that the decision to go overseas is not only to obtain finance, but also the contacts needed for a global business.

While Australia seems to be doing well in selling new mobile technology overseas, with companies such as bluepulse and funkysexycool, new internet innovation remains elusive. Mr Dawson says this is not due to Australian’s being any less ‘bright’, and ’ hopes to see things change over the next couple of years.’ One of the challenges, he says, is for Australians to be willing to try and fail before succeeding.

Mr Dawson has brought up an interesting point about Australian culture in this interview – we are not as willing to try if it means failure. He points out that in an ever changing area, such as technology, is a trial and error arena. In terms of coming up with innovative ideas, instead of just improving on ideas already conceived, resilience seems to be key. We need to find the bravery to learn to go out on a limb with ideas that may be a bit out there and could possible fail, pick ourselves up, and try again.

Canadian Copyright

Canadians are upset about new copyright laws that are supposed to bring the country up to date in this area. A bill, with the title - made in Canada copyright reform - was introduced the lower house recently. Those incensed by the bill claim that the government of Ottawa are giving into American corporate pressure.

http://www.abc.net.au/rn/mediareport/stories/2008/2279647.htm

There has been ‘considerable and aggressive online dissent ion about the changes’, with Facebook adding to 60,000 members of concerned citizens.

Professor Michael Geist, Canada research chair in Internet and E- commerce law at the University of Ottawa believes that despite the conservatism of the current Harper government, it will have to take notice of this voice of dissent. The Canadian voter, he points out, is online, with 7 million Facebook accounts in a population of 32 million. But he thinks it is necessary for the public to express their awareness to the wider community and campaign to elected officials.

Professor Geist says that the Harper Government made it clear, before they came to government 2 and a half years ago, that it would support ties with the US government. However, the Canadian business community has met the legislation with mixed feelings. There is ‘certainly support from many of these groups largely the Canadian branch groups for American industry’, but some record labels have recorded their support, while others oppose. ‘Some Hollywood interests are in favour of this, the documentary film makers are not’ and educators are also spilt in their opinion.

According to Professor Geist, the new legislation will hurt the community. He says it the laws will make it illegal to circumvent on Cds, DVDs, electronic book. This will mean that copying a movie from a DVD, a song from CD, or a television program, will become 'an act of infringement'. He agrees this as an everyday act for most Canadians; this will make most members of the community criminals.

Professor Geist believes the legislation would also affect the countries Internet economy for both individuals and businesses such as software developers. Developers, he says, depend on ‘openness’ within their business to realise new ideas. He says the new legislation would send mixed messages – encouraging the market through protection while ‘discouraging greater openness and flexibility’.

Professor Geist believes a fairer alternative to the legislation would ‘include some protection for these digital locks’ while still maintaining ‘some of the potential fair dealing and permitted usage’. He uses New Zealand’s copyright laws as an example.

Another issue is that many people have discovered that these laws ‘unenforceable’, as people will tend just to ignore them and Professor Geist does not feel that the government will be looking in people’s homes. But he warns they will hurt schools and universities, which will feel bound to follow copyright law. He says this will be limiting to both teachers and students.

While it is illegal in Australia to do much the same thing in terms of copying such materials, it does not seem to have affected our school system as devastatingly as this Canadian legislation would. Recently, I knew of a young student downloaded part of the Empirical March from the Star Wars films for an assignment and this was considered appropriate by the school. It seems that if the legislation goes through in Canada, students may be very limited to what they can use within schoolwork. Schooling is affected by the technologically saturated world we live in, and many take this for granted. It is not until our freedom to use such technology is threatened that we see how much of our lives revolves around it. In my personal opinion intellectual copyright should be open for educational and creative purposes, but with an eye to protecting those who earn the profit from such goods, and which without could not continue the work that we enjoy. It seems like a fine balance, but one which the Canadian government may need to readdress without Big Brother looking over its shoulder.

Friday, June 20, 2008

Community Station in Trouble

Unlike WIN TV, the future for a community TV station in Perth, Access 31, does not look bright.
http://www.abc.net.au/rn/mediareport/stories/2008/2279635.htm

The station has announced a solvency declaration and will close on June 27 if funding is not given from the Federal government, or an emergency package is not found to keep it afloat.

It’s Vice President Gerry Gannon has confirmed this fact on the media report recently. He believes that while the solvency declaration was put forward because the company simply cannot pay its current bills. He says a future for the station will also require additional proposed funding to have the station brought onto digital TV.

Mr. Gannon said considering the state of the station’s funds, declaring insolvency with ASIC was the only responsible action to take. At the moment the Mr. Gannon says the station is desperate for some kind of emergency package to keep the company going until Federal funds came through.

The station is currently petitioning Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy. Mr Gannon points out that ABC and SBS received 10 million to switch from analog to digital television, while community stations only want 4.1 million to make the switch. He points out that 42% of Australians now watch digital, and there is no future for community television if they are left to languish on analog.

Mr Gannon says that the station has been talking with State government and Lottery West in terms of emergency funds, but stresses that its future is dependent on the Federal government to make a ‘funding a time frame’.

While Mr Gannon sees the current government as having a stronger commitment than the previous government, and for that he is grateful, but considering the time limit the station has, it may make little difference.

The Federal government's decision to fund digital television was verified in The Australian article 'Canberra forks out to send us digital', published in the media section on Thursday, March 27, 2008. In this article Senator Conroy promised a 37.9 million funding and policy package. In addition to this the Senator said analog TV would be switched off on December 31, 2013.


It saddens me to see any community television die, particularly under these desperate circumstances. Community television has had a history of providing content that otherwise would not be brought to air. In my experience it has acted as a voice for those who wish to express themselves creatively. It provides a feasible means for local voices to be heard without the constraint of keeping advertisers happy. Essentially, it is uncompromised viewing and this should be held precious. Whether the Australian government holds the same view remains to be seen. But with issues like this it is also up to people to petition for their rights to hold such avenues to express freedom of speech. Has community television become so unpopular that nobody actually cares anymore? Is the majority of Australians content with the homogenised programmes provided by commercial stations that are funded by advertisers?