Roy Morgan Research claims rival readership metric EMMA’s launch strategy may be ‘predatory pricing’
Roy Morgan Research has lashed out at the publisher-funded readership metric EMMA, saying it is concerned rival research company IPSOS, which runs the new survey, is using ‘predatory pricing’ in order to to drive them from the market.
CEO of Morgan Michelle Levine said the company was worried that its rival was offering its services at below cost in an attempt to make it unprofitable for Morgan to continue offering its product.
“It looks to me like ‘predatory pricing’,” claimed Michelle Levine, CEO of Roy Morgan Research, “The consequences of ‘predatory pricing’ are very serious.”
“Predatory pricing is illegal if the purpose of the supplier is to eliminate a competitor or deter competitive conduct.”
Mumbrella yesterday revealed how many media agencies had been offered at least one year of free readership data and a second year at a heavily discounted rate if they sign up before December as EMMA seek to establish its marketshare. Mumbrella makes no suggestion that this amounts to predatory pricing.
Levine said IPSOS was providing its EMMA data for free because it believes agencies will not pay for two separate metrics and wanted to ‘pressure’ agencies to switch.
“I am not surprised that the Newspaper Works survey has to be ‘given away’,” said Levine.
“Despite discounting and what we understand to be extraordinary pressure being applied to the agencies from both within and outside Australia, the agencies are not willing to pay for a second readership survey,” she said.
“Roy Morgan Research has long standing relationships and contracts with agencies, and we are working increasingly closely with them individually – recognising that they are in a competitive market – vying for the same clients.”
Since EMMA’s launch three weeks ago, News Corp Australia, Fairfax Media, Bauer Media and West Australian Newspapers have all announced they would use EMMA as the metric for setting their advertising rate cards.
IPSOS and newspaper publishers’ body The Readership Works, which owns EMMA, has declined to respond to Morgan’s remarks. IPSOS has previously declined to comment on its pricing strategy arguing its commercial arrangements are commercial in confidence.
Roy Morgan has also taken aim at News Corp Australia, with whom the research company has a long running feud. Levine warned that publishers needed to be wary of being seen as a ‘cartel’ using the new readership data to set a higher price for media agencies.
“Legally I am surprised that the survey is being ‘given away’,” said Levine. “I wonder whether Rupert Murdoch and the Board of News Corp are aware of the move.”
“It is not absolutely clear to me who will be held legally responsible if the proposed ‘giving away’ of the research is held to breach the Cartel Conduct provisions of the competition and consumer law.
“News Corp is the major source of funding for the research, Newspaper Works, the newspaper industry body responsible for commissioning and controlling the research; or Ipsos the research company commissioned to conduct the survey and apparently now responsible for marketing and selling.”
Levine said Roy Morgan believed the publishers and industry body were at risk of “crossing the line.”
“A further point is whether there is other cartel conduct involved,” she said. “We do not know whether or not newspapers have sought to increase their advertising rates as a result of the higher readership levels reported in their survey.
“The moment they do The Newspaper Works may have ‘crossed the line’ i.e. the critical line between an industry body and a cartel.”
Both The Newspaper Works and News Corp Australia declined to respond to Levine’s remarks.
However, in a previous statement just before the launch of EMMA, News Corp told Mumbrella in response to a previous attack from Roy Morgan:
“emma is independently owned and operated by globally respected research firm Ipsos Media CT. Ipsos was appointed following an open tender; a tender in which Roy Morgan Research declined to participate.
“The tender was called after Roy Morgan Research did not respond satisfactorily to countless requests, over many years, to explain discrepancies and errors in its data.
“Emma delivers what publishers, advertisers and agencies have been wanting for years – greater accuracy, greater coverage, true sectional insight, a consolidated cross-platform view and, critically, transparency and authenticity.
“emma is independently audited by Dr Rob Hall of Environmetrics to ensure ongoing accuracy and credibility.”
The comments from Roy Morgan come on the same day EMMA released its second round of monthly readership data.
The chief executive of The Newspaper Works, Mark Hollands, said in a statement: “Advertisers and agencies will benefit from this more open, transparent approach from emma and finally have what they have long asked for. The monthly data shows stability in the market, which is what publishers had anticipated.”
Overall the month-on-month data showed only modest changes in both print and magazines. EMMA is unable to provide year-on-year data until they have two years of data, at present they only have around 18 months.
Nic Christensen
Declaration of interest: Emma is currently being advertised on the Mumbrella website.
News Corp want to control print readership. With most of their title now moving to the web will online be next? Who can stop them if they decide to go down this path?
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