Opinion

Shop assistant to media mogul: how Damian Eales rose to the top at News Corp

Screen Shot 2015-07-13 at 8.36.05 amAfter forging his name as a marketer Damian Eales is now one of the most powerful media executives in Australia. He sat down with Nic Christensen to talk about his new role, how Ted Horton influenced him and the challenges and opportunities facing News Corp.

“I have to tell you reading The Sun headlines during meetings is a very entertaining way to pass the time,” quips Damian Eales, as he looks down at the Apple Watch on his wrist.

“Even during this interview my iWatch has buzzed,” says the former retailer cum bank marketer who now finds himself in charge of some of Australia’s biggest and most powerful newspapers, before saying News Corp Australia will have its own apps on the device “imminently”.

It’s day two for Eales in his new role looking after papers like The Daily Telegraph and Herald Sun, and as we sit in his corner office on level five of News Corp Australia’s Holt Street offices he is in a gregarious mood.

He has reason to be.

Daily Telegraph front pageEarlier this month he was named managing director of metro and regional publishing for News Corp Australia – a brand new role combining sales, marketing and financial responsibility for 17 major mastheads – making the man who started working with News Corp’s marketing department just over two years ago one of the most powerful media executives in Australia.

The challenge ahead 

His new remit gives Eales responsibility for mastheads spanning the length of the East Coast, from the big city titles like The Daily Telegraph and Herald Sun to more provincial publications including The Hobart Mercury and Geelong Advertiser in the South, to The Northern Territory News in the north. But he is quick to downplay the size of that empire.

“We are a big business and it is a slice of that business,” he says, before conceding “but of course our metros and regionals are important titles.”

Indeed they are. News Corp’s mastheads regularly draw national attention and set the news agenda for much of the wider media, but they are also a sector which faces major structural challenges.

Despite the company’s line there has been a “levelling out” in ad sale declines, print revenues are still falling at a rapid rate.

Sharb Farjami

Farjami

The last Standard Media Index data showed media agency spend on print newspapers was down 10.9 per cent year on year in May, a decrease of more than $10m across publishers. That continuing drop, and relatively lower rate of pickup for digital advertising across mastheads, is a major challenge facing Eales and recently promoted national sales director Sharb Farjami.

Those revenue decreases come as print circulations continue to decline, with key metro titles like the Daily Telegraph shedding close to 23 per cent of weekday print sales since 2010 (359,171 sales in Feb 2010 to 273,241 in the Feb 2015) – although News would argue its subscriptions have dropped less than rivals Fairfax. That challenge is magnified with questions over how digital subscriptions are growing given News has consistently refused to release figures for titles other than The Australian and Herald Sun.

Add to that the resistance by a number of media agencies to use the data from publisher backed readership survey EMMA and it is clear that Eales has some interesting challenges ahead.

Are the challenges of the role daunting?

“Yeah absolutely it is,” Eales admits.

“You’d be mad if you said that it wasn’t (daunting) but that said it is an exciting frontier that we face into.”

Given the size of the challenge what was it that made one of Australia’s most high profile marketers – who could have taken a senior role in a number of sectors – choose a role in the media?

“Honestly, I see it as a massive opportunity,” says Eales. “Our business had a lot of amazing assets.

“We have emerging digital businesses, subscription revenues and products that we can provide advertisers that help clients with both a scale and a specificity of connection with an individual customer that is almost unrivalled.”

He cites his own retail experience for a case study in how media might play out.

“If I look at my own personal history – in a different industry – in a department store sense and you look at how that particular business has transformed and department stores have expanded into other retail formats over time.

“I think that’s what we (in the media) face too and that is very exciting.”

“First and foremost I think I’m still a shopkeeper”

Eales’ retail background is important and it’s quickly clear that not only did he learn a lot on the shop floor but that he is intent on applying those lessons to one of Australia’s biggest media companies.

myer_logo_large“I was working in Myer since I was 14,” he says. “I loved working on the floor in retail. It taught me how to sell something and how to up-sell to something better.

“It taught me about listening first, and selling second. It taught me that a beautiful product sells itself, and everything else needs a pitch. It taught me that presentation leads to profit.”

Eales worked at Myer all through university – where he gained an honours degree in speech pathology from the University of Queensland – and eventually became weekend manager of his store in charge of  around 100 staff on any given day.

“I loved my time at Myer and when I went to resign, my boss said, you’ve done a great job, why not give it a year and do our cadet program?” he explains when asked why he never became a speech therapist.

“If you don’t think you want to still do it after that you can go back to speech therapy. I loved it and never looked back. I worked about ten years at Myer and then 14 years at David Jones.

“First and foremost I think I’m still a shopkeeper.”

McInnes

McInnes

Eales rose up the ranks at David Jones and quickly became a key lieutenant to then CEO Mark McInnes, leading the department store chain’s marketing as well as its financial services division.

Even today Eales describes McInnes as “one of the greatest leaders I have ever worked for”.

In the wake of McInnes’s headline grabbing departure in 2010 Eales also chose to look for a new challenge.

“I had a magnificent relationship with Mark,” he says, “but with the changing of the guard at the top of the company I felt it was the time to leave.

“I went and worked for Westpac. (Head of retail and business banking) Rod Coombe brought me along on the basis that he wanted a retail approach to financial services.”

Over the next 18 months Eales would shake up the bank’s marketing, bringing the “hands on” approach to dealing with media partners at both David Jones to the bank. Even as a marketer he was known for having a strong emphasis on print advertising, often enjoying direct relationships with newspaper editors.

Asked about this emphasis in his marketing mix Eales explains: “To me newspapers are still the best way to communicate a marketing message on an impactful canvas in an interruptive sense for a retailer or brand – depending on the brand.

“There is no doubt about that. It is one of the most impactful formats available to reach consumers at the top of the funnel where they haven’t yet determined they want item X.

“It is one of the most powerful alternatives.”

All change – entering the media bearpit

Kim-Williams

Williams

It was over a coffee with former News Corp CEO Kim Williams that Eales decided to make the jump into a form of media he loved.

“After I left Westpac I had written up my list of people who I wanted to talk to and one of the first meetings I happened to have was with Kim Williams, who said to me ‘why don’t you come test your hand at media?’.

“He also warned me, ‘At the same time we’re going to test Damian Eales and if both sides like it – then maybe this can be the career you want to pursue’.”

The then News Corp boss charged Eales with taking the newly acquired Fox Sports assets and finding a way to better integrate its content within News’ suite of products and later also put him on the board of The Readership Works, which was battling to launch the long stalled readership metric EMMA.

While Kim Williams abruptly departed the company in August of 2013 new CEO Julian Clarke, who had been brought out of retirement to take the role, promoted Eales to replace Corin Dimopoulos as head of marketing.

Michael Miller Peter TonaghTwo years on and the company is in the midst of a second changing of the guard, with Clarke to retire at year end and be replaced by APN CEO Michael Miller, who will be Australasian chairman, and current COO Peter Tonagh who will move to CEO.

Eales plays down the impact of leadership change at News in recent years.

“I would see it far more as an evolution than revolution,” he says.

“But Julian has done a great job in steadying the ship and putting us on an even keel.

“In some respects there has been some significant changes, but in other respects there has been significant continuity. If you look at PT (Peter Tonagh) and myself and a number of our leadership team we have been here now for a number of years under the leadership of Julian.

“As we move forward PT and Michael Miller are perfectly placed to continue that evolution.”

Selling News 

Asked what his biggest challenge is in the role, Eales deflects the question for a moment, to talk about about the success of the David Attenborough DVD promotion for News Corp

“We are an amazing powerhouse of innovation and scale,” he says. “The best example is the David Attenborough DVD series. I think it is indicative of what we do as an organisation when we work together.

“That promotion sold 3.5m DVDs in two weeks which represented 6 per cent of the total annual marketshare of DVDs sold in Australia.

Screen Shot 2015-07-11 at 1.24.16 pm“At the same time we significantly increased circulation and made an incremental profit for the organisation through the sale of the DVDs.

“It ticked many boxes for our consumers, shareholders and our advertisers.”

The promotion also helped temporarily offset a price rise for many of News Corp’s tabloids, and with Eales telling the recent International News Media Association World Congress in New York the company had “thrown the baby out with the bathwater” by canning promotions under Kim Williams.

Coming back to the original question, he admits: “My biggest challenge is we have an amazing team of people within the organisation… but our challenge is to pull that business together so that are delivering better solutions for both our customers and our advertisers.”

Will there be more of these promotions? “Yes definitely,” he says. “It is now an embedded capability in our business.”

But while they boost circulations and profits some media buyers and marketers have expressed concern at just how engaged a consumer is with the newspaper, and its ads, if they are buying it to get a Mr Men book.

Mr MenAsked if these promotions are about driving profit or managing print circulation decline Eales argues “it is about adding value to a newspaper”.

He explains: “My sister avidly reads the Courier Mail for the news, but she also wants to know where the best price is for milk, bread and bananas on any day of the week. So reading those supermarket ads is an example of the inherent value in that product.

“The ability to collect a series of DVDs that might normally retail for $100 for a fraction of that price is another example of adding value to a newspaper.

“I don’t think the newspaper has ever just been about the news.

“I think for us our opportunity is to continually enhance every part of the value proposition. Will it slow circulation declines? Absolutely, we have already demonstrated it.”

Questioned about digital innovation within News, Eales concedes it is a mixed bag but cites the likes of five-year-old venture Storyful as a case study where News Corp globally is building technology solutions that are helping both editorial and advertisers.

“Not only does that give an unrivalled offering to our editorial colleagues who are searching for video content that is validated, authenticated and to the moment, but it actually gives increasingly our advertisers user generated content that is similarly dealt with the authenticity and the copyright issues and can incorporate it into their campaigns.

“We are constantly seeking perfection and I would be lying if I was to tell you I was satisfied with every aspect of the business. We need to do a better job on many fronts but that’s our job and we are up for it and are getting set to move forward.”

Driving digital 

While Eales is an unabashed lover of newspapers, he acknowledges an effective digital strategy will be key to the company’s future.

When asked about digital subscriptions Eales says: “They are on a terrific growth trajectory and it continues to grow and that is despite the fact that we are charging more for content.

“We have increased the price of a lot of those subscriptions and it continues to grow at a significant rate.”

News Corp now refuses to release individual masthead breakdowns of digital subscribers for many of its publications, arguing that information is now share price sensitive following the split with 21st Century Fox two years ago.

CEO Robert Thomson went on the record in February noting that Australian digital subscriptions were at 270,000, and this number is understood to have grown since then.

Pushed on the topic Eales responds: “Even in the most mature portfolios of The Australian and The Herald Sun they continue to grow.”

Herald Sun digital subs

Herald Sun digital subs

He also dismisses the quarter on quarter decline in Herald Sun digital subscriptions at the start of the year as being “associated with a price rise and particularly a very significant price rise in the stand alone tablet apps within the app store”.

“I think that what you will see going forward is that portfolio will continue to grow,” he adds.

But with media buyers eager to see the full picture on News’ digital readers will the company ever release the numbers for the likes of The Daily Telegraph and Courier Mail?

“Eventually we will but we are not quite there yet. We are not ready,” says Eales.

What about the broader News Corp digital strategy what does he ultimately want to achieve?

“If you can be on the crest of the wave of change and you continue to keep the customer at top of mind then you are going to service them well on both the consumer side and the ad sales side.”

Standing out

Looking to the future would Eales ever consider running a media company himself?

“It all depends on how I go in this job. The job at hand is my only focus,” he responds diplomatically.

Which media figures – outside of News Corp – have influenced him the most?

Horton

Horton

“The person I might pull out, because he has taught me an enormous amount about marketing over the years, is (founder of creative agency Big Red) Ted Horton,” he reveals.

“Now that might not be the type of media exec you were expecting but I think that Ted is one of most insightful, cantankerous creative geniuses I have worked with.

“He has taught me an enormous amount about standing out in a crowd. I think in our business CMOs run a real risk spending so much time on the specificity of targeting a customer on a one-on-one basis that if we’re not careful when you connect to that customer you don’t have something that is powerful, meaningful, relevant and differentiated.”

Eales is known to be a forthright personality. One industry figure tells me bluntly “good or bad – you always know where you stand with Damian”. I can’t help but ask if “standing out” or differentiating himself is something he has used in his own career.

“I talk about differentiation every day in our business,” he responds, before pausing and in a moment of self reflection admitting “And while I’ve never related it to my own career, perhaps it applies there too.”

Undoubtedly the newspaper sector is entering some of its most challenging years. But one thing is certain, with Eales influencing some of News Corp’s key functions it’s unlikely that a failure to stand out will be what brings them undone.

  • Nic Christensen is the deputy editor of Mumbrella 
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