Media buyers welcome Nine and Fairfax merger

Australia’s media agency bosses have responded positively to the Fairfax and Nine merger, with Wavemaker CEO Peter Vogel claiming the news will help sustain an industry that was “in desperate need of legislative reform”.

“At Wavemaker and GroupM, we see the move as positive for the market, our clients and for Australian content,” Vogel told Mumbrella. “The industry was in desperate need of legislative reform to allow it to innovate and compete locally and with global players and this is now playing out.”

Vogel pointed to the media reforms, which he claims were “designed to promote Australia content and support and sustain a future for the Australian media landscape.”

Vogel: ‘The industry is in desperate need of legislative reform’

“This deal does just that,” he said. “When you specifically look at the proliferation of expertise in Australian content between the two businesses, it makes an enormous scale play in terms of Australian content.

“The merger also offers an opportunity to reduce costs, streamline tech partners, data capabilities, systems and processes. And it brings television, print, radio, and streaming under one roof, as well as significant data and digital power, which is likely to enhance both parties’ assets.”

Mike Wilson, CEO of Havas Media ANZ, said: “If the media ownership law change was indeed the asteroid – what will happen now to the dinosaurs? We have our first answer. And there will be more to come, of course, and the media landscape will be changed dramatically; that much was anticipated.

“Mergers – although this looks more like a takeover – of this scale are notorious for throwing up surprises, though, and for Nine the ‘cultural integration’ play will be key, as shareholders are busy celebrating efficiency gains.

He said News’ reaction will be interesting, claiming “they are rarely outmanoeuvred.”

“And in CBS (Ten) we have a massive foreign media owner who has barely even got started in this market. The new entity ought to represent significant new ‘mixed media’ opportunities for agencies and advertisers, as well as market share gains for Nine – all the research tells us this is the best way to build brands, and sell products and services.

“The trick will be how fast, and painlessly, the Nine-led operation can restructure capabilities, and some very good talent.”

Wilson: ‘News are rarely outmanoeuvred’

PHD CEO Mark Coad told Mumbrella in a statement that he didn’t see a significant impact on either media company’s pricing, because “the assets within this group are still going to operate within their respective competitive arenas”.

“If anything advertisers would expect some sort of efficiency in bundling across the group,” he said. “As for whether this is a good or bad move – let’s not forget who these guys are up against. They are competing with significant global digital players and one way to compete against that is definitely scale. In that sense, a stronger competition aids pricing for advertisers.”

Coad: ‘Let’s not forget who these guys are up against’

Omnicom Media Group’s chief investment officer Kristiaan Kroon described the merger as “logical for two businesses that are both performing well and have a good working relationship across their senior management teams on joint ventures, such as Stan.”

“The new business will join the new large-scale media businesses being formed in the Australian market. The drive for scale has been the underlying feature of the media mergers and acquisitions that have been announced so far.

“At this point, we do not have significant concerns around negative impact to client outcomes. Despite the scale of the new Nine business, there are strong competitors in all channels it will operate across. The new business may also bring more competition with the likes of News Corp which we view as positive.

“With three market changing acquisitions and mergers in under a month, it will be fascinating to see how other local media owners react to the reshaping of the landscape and in time, their ability to take on the large global media businesses.”

Kroon: ‘The new business may bring more competition’

Willie Pang, CEO MediaCom Australia & New Zealand, said his company viewed today’s merger “as a positive and important move.”

“As the world becomes increasingly digital, traditional barriers to entry for global raiders and start-ups will continue to erode,” he said.

Pang pointed to the increasing competition from American tech giants such as Facebook and Google, and said he hoped the merger would deliver better quality content for Australians.

Pang: ‘A positive and important move’

“We hope to see a strong and flourishing local content eco-system but most Australian corporations lack the balance sheets to compete with the likes of Google, Facebook and Amazon.”

When it comes to consolidation, Pang believes it will be “inevitable”, but added that he was “hopeful it will deliver better quality stories and experiences, at scale, for local audiences.”


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