Media companies aren’t marketing through the downturn; Disrupt Radio goes off air

Welcome to Best of the Week, written on Friday and this morning in Evandale, Tasmania, on a calmer weekend, where the winds have died down and the power is back on, in my corner of the island at least.

Today: We crunch the numbers to find out whether media companies take their own advice on marketing through a downturn (spoiler: they do not). And Disrupt Radio gets locked out of its studios, and goes off air.

Happy World Beard Day.

If you’ve been thinking about upgrading to an Unmade membership, this is the perfect time. Your membership includes:

• A complimentary ticket to all of Unmade’s events, including HumAIn (2025), REmade (1 October), Unlock (31 October), and Compass (November);

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• Your own copy of Media Unmade. 

I finally ticked something off my to-do list this week.

Since earnings season wrapped up last month, I’ve been meaning to dig into the annual reports to examine the marketing spend of Australia’s media companies.

Whenever we hit a downturn, media companies roll out a mantra for their customers that the best way to come out the other side is to invest in their brands. Back when AdNews was still in print, one of the first signs that economic winter was coming was when they dusted off their house ads about the importance of advertising through a recession.

So I dug into the media companies’ annual reports to find out whether they’ve been practicing what they are preaching. They have not.

Every ASX-listed media company that shared a number in their annual reports (and not all of them do so) cut their own marketing spend, even as they were telling their own clients that this was a bad idea.

In the case of Seven West Media and Southern Cross Austereo, they also made their chief marketing officers, Mel Hopkins and Nikki Clarkson, redundant.

In absolute terms, Seven West Media cut the most out of its marketing budget between the 2023 and 2024 financial years, cutting it by $5.6m (or 19.2%).

In percentage terms, Southern Cross Austereo trimmed the most from its marketing costs as it dialled back on the launch phase marketing of its digital platform Listnr. It’s also hard not to wonder whether the considerations of delivering a short term profit growth story to a market poised for takeover activity outweighed long term investment. A cut of 26.2% in marketing spend undermines the Long And Short Of It arguments of the marketing establishment.

Missing from the table is Nine because it doesn’t share its marketing costs in its annual report (something of an omission for an advertising-funded company, I’d argue).

I’ve also left ARN Media out of the table because it’s information line on “selling and marketing expenses” likely includes cost on its advertising sales as well as actual marketing so wouldn’t be directly comparable. For the record, ARN’s number in the calendar year 2023 fell by 14.6% to $39.7m.

Like ARN, outdoor company Ooh Media runs its finances on a calendar year, so its data is more than half a year out of date. It showed a 5.2% cut in the company’s marketing expenditure in 2023.

I’ve also included Enero, owner of ad agency BMF, in the table as the company does share a number listed as “communication expense”. It cut those costs by 16.7%.

There’s no absolute science to what proportion of a company’s revenue should be spent on marketing. And the calculation is more complicated when companies own their own platforms which are an additional source of self promotion. But there seems to be a consensus that consumer facing brands should be spending between 5-10% of their revenue on marketing, while B2B companies should be spending. 2-5%

None of the companies who shared numbers came close, with SCA on 2.2%, SWM on 2.1% and Ooh Media on an insipid 1.2%.

For the record, Unmade’s marketing expenses of $44,000 in the last financial year, mainly around our events, amounted to 7.8% of our revenue. Arguably we spent too much.

By the way, the advice that media companies give to marketers about investing in their brands is good. But it takes boards and managements who are incentivised to invest in the long term, and who expect to still be in their roles to see the results.

A spot of practicing what they preach would not go amiss.

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This week saw further developments in the saga of digital broadcaster Disrupt Radio.

The loss-making company, which has not paid staff their July or August salaries, went off air from its DAB+ broadcast frequency after being locked out of its studio by Sports Entertainment Network during the week. SEN had been leasing Disrupt the studio space and access to some of its digital spectrum

For now at least, Disrupt Radio is still streaming old shows online.

We revealed in July that Disrupt had lost nearly $5m in its first year on air, and needed to find $400,000 per month to cover its costs. At the time it had just $5,000 left in the bank.

Founder Benjamin Roberts told Unmade at the time that fresh investment was imminent. Management have continued to tell staff – most of whom have stopped work until they are paid – that money is on the way.

This week Roberts did not respond to Unmade’s invitation to comment. A spokesman for SEN returned our call but declined to comment.

It feels like the story of Disrupt Radio may be coming towards an end

A bad day for Nine, the most heavily weighted stock on the Unmade Index, dragged the board down by 0.9% to 446.8 points yesterday.

Nine lost 1.5%, leaving it teetering only just above a $2bn market capitalisation.

Rival TV network Seven West Media went in the opposite direction, gaining 2.9%.

There were similar mixed fortunes for the audio stocks with ARN Media losing 1.8% and Southern Cross Austereo gaining 0.9%. Last night the Australian Financial Review reported that activist investment firm Samuel Terry Asset management has become the biggest shareholder in ARN, with a 16 per cent stake.

In each edition of BotW, our friends at Little Black Book Online highlight their Campaign of the Week

LBB’s APAC reporter Casey Martin writes:

Our brilliant campaign of the week comes from TBWA\Sydney for Heinz.

They sent a human pickle into the tomatoey mess of the La Tomatina festival in Spain. The cinematography coupled with a rendition of Bizet’s “Prelude’ to Act 1 Of Carmen, gives the whole spot a renaissance feeling. The joy of the crowd and the ridiculousness of the human pickle is utter brilliance. 

Read more at LBB online

We had a bump start to the week on Monday as power outages turned our Start the Week podcast into more of a mission than usual. We explored new stats on podcasting and previewed Upfronts season.

On Tuesday we explored the dynamics behind another poor set of advertising spend data from SMI Guideline:

On Wednesday, we explained why Labor’s media reforms may fizzle out before the election is called:

On Thursday, we reported from Ooh Media’s Outfront event which kicked off Upfronts season:

Time to leave you to your Saturday.

If you’d like to hear a little more from me today, you’ll find me officiating again in the weekend edition of the Fear and Greed podcast.

And Abe Udy, Cat McGinn and I will be back on Monday with Start the Week.

Have a great weekend.

Toodlepip…

Tim Burrowes

Publisher – Unmade

tim@unmade.media