Perth report: Tough times give way to green shoots for media and marketers

Closer to Asia than the East Coast and in the midst of an economic downturn Western Australia sometimes feels like another country. But beneath the gloom there is a belief the market is ready to turn. Mumbrella speaks with Perth's media and advertising leaders about the future of the market.

The boom/bust economy of Western Australia has the region’s media companies and agencies looking for fresh opportunities as the market ponders just how long the current economic slide will last.

Media executives and agencies admit that the local market has felt the impact as the resources construction boom fades into memory, and agencies are also turning their attention to new markets and diversified opportunities.

Nine Entertainment Co., has put its money where its mouth is by opening a new studio in the heart of Perth, while Seven West Media is poised to make the most of its recent acquisition of The Sunday Times from News Corp.

Nine's investment in its new Perth studios a fillip for the market

Nine’s investment in its new Perth studios a fillip for the market


At the same time, Perth is beginning to develop a healthy start-up community feeding of the growth in advertising-driven apps and services, with many of the new companies looking to ‘export’ their talents interstate and overseas.

New wave of startups

Clive Bingwa, managing director of IPG Mediabrands and Interpublic Media, says that the market needed to treat the economic challenges the state faced as an opportunity.

Clive Bingwa1

Bingwa says WA’s economy has been challenged

‘The Sentiment in the market is relatively weak, to be brutally honest,” Bingwa says.

“There is a lot of uncertainty and I think what was created in the boom was an equity fuelled, debt-fuelled kind of growth curve. But at the same time, with the market slowing, what it has done is it’s created a new level of opportunity.

“A lot of the entrepreneurship was strangled by the sheer fact that you could pick up a job earning $200,000 a year as a cleaner. What I’m seeing at the moment is I’m seeing smart clients over-investing to unfairly steal market share. There are quite a few of those. There are lots of people who have ridden the cycle before.

“At exactly same time there is a disproportional level of start-ups going on in Western Australia.

“What they are doing is they are trying to capitalise on new conditions, on the new settings in market.”

For Bingwa the shifting cycle means many companies were now trying to make the most of cheaper cost of doing business now that mining money was no longer artificially inflating the market.

The end of the mining construction boom has had an impact

The end of the mining construction boom has had an impact

“The positive thing is it extends into an advertising market,” he says.

He adds where the State had been through boom and bust in the past, the feeling in the market in 2016 was something new.

“It definitely feels like something new. We avoided a lot of the structural disruption of the GFC because we were digging stuff out of the ground and selling it for an absolute fortune. It is strange, I’ve not seen these conditions before.”

A media rennaisance

Despite the challenges to the State economy, Bingwa says Initiative was doing well and that it and other agencies were making the most of the closer relationship they could have with clients in a small market such as Perth.

“We have been doing a lot of work around data analytics and econometrics and it’s a bit of a dark art in itself and everyone will claim to do it well, and there are a few places that do it well,” he says.

“The gap between the boardroom and the planning room is a lot shorter and it forces you to be nimble and it forces you to be agile and if I was going to sum it up, there is literally nowhere to hide. You can’t draw in reams of people or go through layers, the process is very direct and the output is very direct at the same time.”

Bingwa described the consumer media market in WA as “surprisingly enough, quite bullish” suggesting it had been led by radio.

“They are really positioning themselves with a high level of visibility as far as where they located their studios. They were the first to engage the consumer on a broader, more immediate level, both in terms of their physical being as well as the product they rolled out.

“Similarly TV is going through a reinvigoration in Perth and the Nine move is a classic example of that. For lack of a better term I think they are espousing the radio model which is connect to the consumer closer, be visible, be part of the community whereas community used to be about sponsorships and activations and all of those types of things to raise money, now it’s about activating clients.”

He says Seven in WA had straddled the market well with grass-roots sponsorships and events aided by the recent investment in event specialist Trievents.

sevenwestmedia logo

“It’s a clear positioning that, ‘Hey, we are going to bridge the gap between us and the consumer and we are going to have a closer one-to-one conversation’,” he says of Seven.

He also noted the out-of-home market is also unlocking itself quickly to new opportunities.

“When you have a look at some of the plans in the pipeline from companies such as QMS, APN and Ooh, they are significant. The market is going through a bit of a renaissance in a bit of a quiet period.”

Bingwa believes the networks should be paying more attention to the Perth market.

“It’s one of the easiest markets to do great work because of the lack of distance to the decision maker, so you can shepherd good work all the way through to board level with your marketing teams and I don’t think networks really capitalise on that as much as they should.”

Ray Wardrop, managing director of Nine in Perth, said that despite the economic challenges, many in Perth believed the market had been underestimated by outsiders.


Ray Wardrop says Nine’s new studios are an investment in the market

“There is this real energy about Perth,” Wardrop said.

“We are heavily resourced by the network and we are really nimble here and can turn around things really, really quickly and are very ideas-based as well.


McMahon sees opportunity in localised content

Kate McMahon, sales director at Nine in Perth, admits the challenges faced locally.

“It’s challenged, definitely, and I think the focus is on ROI and every dollar spent. Particularly with a lot of retail clients, they want to know that what they are spending is working for them. We have just got to prove to them it works because there is a level of doubt in the market; I think times are tough.”

Wardrop says that localising content was a big part of how Nine was positioning itself.

“It’s enormous and we are going to invest heavily in that,” he says

McMahon says the time difference to the east coast gave Nine a lot of flexibility locally when it came to big events such as the NRL Grand Final and State of Origin and the ability to place local content in prime time.

“Over here we have a gap in our schedule and where they would have run repeats of Big Bang Theory, we’re not going to interrupt the entire network schedule so if we can create amazing content, which we do… that is great for our viewers but also for our clients because they have an opportunity to integrate into prime time programs.”

Green shoots

At Seven West Media the group’s West Australian newspaper is about to take control of The Sunday Times and the Perth Now website from News Corp after ACCC approval to the deal was granted in September.

Chris Wharton

Seven’s Wharton sees new opportunity with Sunday Times deal

With WA the home base of Seven West Media, State CEO Chris Wharton says the investment was recognition of the vision the business had for the region.

“It gives us opportunities in quite a few niches. So lifestyle is one, but there is a great opportunity in sport that’s played on Saturdays. There is still opportunities to break news, there’s opportunities to present some really good opinions in there when (on Sunday) people have got the time to sit back and enjoy it,” Wharton adds.

Wharton says that the state of the market is something that the media business had become used to and there was nothing new in the current environment.

I would say it’s been tough for at least four years, maybe five.”

“We had the GFC and the clouds broke and the sun shone through for a short time in 2010 and maybe a little bit of 2011. But it has gotten progressively tougher.”

The Sunday Times

Sunday Times gives Seven West Media new clout

He noted that conditions for those directly in the mining industry were good, but for many others, “They were just spectators”.

“Definitely, the economy’s been crook. Our customers are the butcher, the baker, the candlestick maker, as well as the big customers – the Coles and Woolies. We get a read much earlier. I called the retail slump I’d say six to eight months earlier than my colleagues in the television business called it,” he claims.

“If you look at delis here (what you call milk bars) – outlets for the newspaper – 600 have closed in the past three-to-four years. That makes it difficult to sell your product when you have 600 outlets close down. We have not been able to re-establish outlets quick enough.”

“It’s tough, but that said, I would say just in the past month we have seen the downward trends levelling off. I’m not game to say we are bumping along the bottom, but I’m a glass-half-full kind of bloke. You can’t say it’s a trend after four weeks, but it’s a hope.”

Wharton hopes that Seven is leading the way across all media with packages for small advertisers helping them get into the market and other media were taking a similar approach to help support the SME market.

Gavin Bain, CEO of Perth-based Meerkats, which has revealed an agenda to expand to the east coast, thinks that after being driven by the artificial impact of the resources construction boom, the market was now being treated to a more realistic environment.

“We were all operating in an inflated market so I think it’s about what’s a normal market and what’s not,” Bain says.

“In boom conditions – and this isn’t just advertising, this is economics – rivers of gold happen for lots of people. The reality is these market conditions, although they are a bit tougher, are probably a bit more normalised. So if you can actually trim your business to work and be profitable within these market conditions you are probably going to be successful over time.”

Bain believes the legacy of the boom is new businesses, which will be the next generation of client for agencies.

“There is also a second tier of client which exists in Perth now, which is driven by the boom. There is a huge entrepreneurial wave of businesses here. Our biggest client is (WA energy company) Synergy. Our second biggest client is a brand that no-one’s ever heard of,” he adds.

While agencies were now working in a more realistic market, Bain says there were clear signs that the slide was not likely to continue for the long term.

“The signs for me are how active strategy is and we are very busy in strategy. It did shut down and there were lots of people who pulled their head in and said ‘let’s just see what’s going to happen’, and now the green shoots are appearing.”

Tech strategy

Kristen Vang of Hatchd and Marc Loveridge of Adapptor represent the new breed of agency that is appearing, framed on the idea of a start-up.

kristen vang

Kristen Vang part of the new wave of agencies coming through

Based in the business and creative hub that has formed in the redeveloped Swan Brewery, the pair have moved from an advertising model to what they call “experience design”.

“There is a top-down interest in innovation, but often times it’s a little bit misdirected – ‘we need an app’ sort of thing – but I guess there is at least the interest that’s starting to come proactively,” says Vang.

Some of the experiential work now being developed by the pair and their agencies, which work together, include an app for Perth’s Public Transport Authority, giving vital transport information for people with vision impairment. Another is an app offering travellers a seamless transition through Perth Airport, with prompts along the way for everything from parking to food.

Loveridge says that working in a market in a downturn had advantages in the experience space because companies were seeking efficiencies that could be solved by technology.

“When you are in a market that’s in a downturn everyone is looking to tighten the belt and everyone wants to get efficiencies, and efficiencies often come from digital services and solutions,” Loveridge adds.

“So we are playing that card, the efficiency game, but also as start-ups we want to launch some new things.”

John Driscoll chairman MarketForce

Driscoll says September best month for Marketforce in four years

But while the overall view of the market is one of cautious optimism – that the challenged economy will throw open some new opportunities.

At Marketforce, part of Clemenger BBDO, chairman John Driscoll says the agency had seen some strong results in recent months despite the gloom.

“I could say that September, and right from the beginning of September, was probably the single biggest month the agency has had in about four years,” Driscoll declares.

“Since June 30 it’s been incredibly busy and that’s just a culmination of a large number of our larger clients all wanting everything at once. You can’t help escape the gloom that’s in Perth at the moment, and the gloom, to me, is driven by two things – one is the mining economy and the other is that Perth people are just not accustomed to a cold winter.”

While Driscoll joked about the impact of the weather, he adds that the agency’s retail clients were not seeing traffic on weekends and it had effect on the market, but the biggest issue was growth.

“The biggest challenge in the market is just lack of growth and the market is simply just not growing at the moment,” he says.

“There is a whole lot of categories which, I think, are under pressure and some of those we (as an agency) are not exposed to at the moment. For example, the housing market is tough, land sales are tough, luxury goods – tough. That puts pressure on the market but not directly onto our agency, which is a good thing.”

Like Hatchd and Adapptor Driscoll says the agency sees digital as a major growth area, which has led them to appoint former IAB CEO Alice Manners to a newly-created lead digital role at the agency.

“I have a view that not many Perth agencies have done digital well. We have all hung the shingle and we have all done a certain amount of work, but the strategic planning and resourcing…with a long-term strategy for clients, is something where I believe there is a great opportunity in this market. ”

With the mining construction boom over the state government is hoping to drive the economy on investment in infrastructure and premier Colin Barnett sees Asia as another natural growth sector – he declared as much at the launch party for Nine’s new studio.

Nine’s decision to develop its new studios may have been driven by the fact of a crumbling 40-year-old edifice. But the message sent to the market by gathering of everyone who was anyone at the party and the upbeat mood may have just been the trigger the Perth market was waiting for.


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