Hywood: Arrogance and entitlement drove advertisers away
Old media organisations were arrogant and had a strong sense of entitlement which left advertisers searching for alternatives, outgoing Fairfax Media CEO Greg Hywood has said.
Reflecting on his time in media, the chief executive, who will step down from his role with Fairfax Media in the next week, said legacy media organisations had enormous resistance to change, but were forced to once the barriers of entry to media had collapsed.
The AANA Christmas event: The AFR’s Paul McIntyre with Kim Williams (left) and Greg Hywood (right)
At an Australian Association of National Advertisers event last night in Sydney where he joined former News Corp boss, Kim Williams, Hywood said his challenge with Fairfax Media was instigating change, after years of talking about it.
“That was something Fairfax was facing when I got back to the company after eight years: confusion about direction, no sort of sense of direction, no narrative for change,” he said.
“[News Corp] had nowhere else to go – basically mags, TV, newspapers – and our view of consumer engagement or customer engagement was to send them a fax in those days – and this was the 90s – saying that your prices would rise by 5% next year and see you later. That’s just the way it was.
“There was an arrogance and a sense of entitlement and they had to change, because the barriers of entry into media had collapsed. These media companies could no longer tell you what you could do and that is why the advertisers went seeking for new alternatives, because they were really, really sick of the options that were available.”
Williams, who had a successful period running Foxtel before his short stint at News Corp, echoed Hywood’s comments. “In business, hubris is your enemy at all times. The media are probably richer in hubris than any set of businesses ever constructed in the history of capitalism. It’s just a sad fact that hubris is the dominant personality of media, it still is,” he said.
“If you go into the offices of the Herald and Weekly Times, you’ll find people who live in a different thought-zone from where the rest of the community is. It’s a fascinating phenomenon and it’s a very difficult thing to alter.”
Fairfax’s Hywood led the legacy publisher from 2011, and is now known as a major driver of transformation in the legacy business, which is currently merging with Nine. In his first year, he moved newspapers to smaller compact size formats, closed down print works, axed 1,900 jobs and introduced paywalls for online content. Over time, the chief executive also locked in a new streaming venture, Stan, axed more jobs, and separated real estate arm, Domain, on the ASX.
Last night, he told the audience of agencies and marketers that whilst he no longer had to sell the fact print would “last forever”, there was opportunity for growth in advertising revenue traditional platforms.
“You pay for what you get. What’s happening is that there was absolutely an enormous enthusiasm that you could get reach at a low price, but the consequence of that was be it via Facebook or Google, or be it by agency promises of doing their own programmatic work, you pay for what you get. Your brand ends up in places you do not want them to be. We have seen swing back,” he explained.
“I’m not here to sell the fact that print is going to last forever – I don’t need to – but it’s been an important component in marketers understanding that you need a mix of platforms.”
Hywood also pointed to the benefit of the joint venture he locked in with Nine for streaming service, Stan. He said the decision to invest wasn’t difficult, given the low price point and the huge supply of content coming in.
“It had a compelling consumer proposition, which is you get what you want, when you want, at a low price point, and the technology was there to deliver it. I don’t think it was a particularly difficult decision, and also the issue was what could we at Fairfax provide to it,” he said.
“We had a strategy – because publishing could no longer rely on just a mix of advertising and subscription revenue – we have to find new ways of creating value, and we’d already done it with Domain.
“We’d leveraged the two big assets of publishing, which is a very large audience and its enormous depth of advertising… to support an internal business.”
Best headline ever… never a truer word spoken.
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I’d agree if the typo was fixed… that colon shouldn’t be there
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Headline is still relevant, new track doesn’t matter if it is the same rider and the same horse
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Delusional and typically ignorant. Hywood spent much of his career working patronage. First in the old club of editorial mates. Later as the sock puppet of Corbett, who was clueless about media. Most of all Hywood allowed the one potential lasting value – the content – to become a weakness. Fairfax is gone and Hywood killed it, for the sake a of flash car and a bucket of cash.
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Hywood announcing that Fairfax would stop printing newspapers years ago and then having to backflip must have worked wonders for advertiser confidence in Fairfax. Hywood publicly promoting his lack of confidence and setting a date so publicly for the newspapers demise must surely go down as one of the most ridiculous strategies ever. Talking down the product and rarely having much to offer on the advertising side of the business – it was an annoyance rather than an importance. It was widely known amongst advertising staff not to involve Greg in a pitch as his people skills and presentation often had the reverse impact expected from the CEO. Hywood sold literally everything Fairfax owned until it was no more. Besides the cuts, all of his growth ideas tanked. Just look back on all then mumbrella articles over the years of all the new revenue streams and big hires that failed due to poor management.
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Agree 100%. But it’s not just ‘old-media’. Their digital counterparts deliver a fair bit of ‘take it or leave it’ attitude (bugger) the clients.
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