BOTW: Adspend in retreat; Mutinex on the up; Meet Motio
Welcome to Best of the Week, mostly written this morning in Sydney, after one of Unmade’s more hectic weeks.
Regular readers will be well and truly aware that we ran our retail media conference RE:Made on Thursday. The kind words people kept saying to me about the event became a little embarrassing, given that most of the work had been done by other members of the team.
After a run of great panels and presentations, the best moment of the day for me came at the end, as I absorbed the buzz at the end-of-day drinks. It was the sound of a new community coming together in Australia for the first time.
On next week’s Unmade podcast, we’ll be sharing the closing Question Time panel - the first time the bosses of Cartology and Coles360 have shared a stage.
Incidentally, we’ve had a big response to the announcement of our next event, humAIn, which will focus on the impact of AI on the marketing industry. Please bear with us while we work through the messages you’ve been sending us via the form on the humAIn website.
A reminder that Unmade’s paying members get full access to our archive, which vanishes behind the paywall after two months. And you also get discounted tickets to all our events. You can sign up today.
Today: SMI’s number signal a decline in media valuations; Motio’s market update; why I think Mutinex will go all the way; failing to understand Woolworths’ insurance strategy
Happy National Absinthe day for tomorrow.
A rough month on the Unmade Index (the SMI numbers help explain why)
We’ll start with The Unmade Index this weekend, because it’s been on the move, racking up a straight week of falls, including a drop of another 0.98% on Friday, taking the index down to 638.4. Our index of Australia’s listed media and marketing stocks has lost more than 12% over the last three weeks - a far worse performance than the wider ASX.
The two audio companies HT&E and Southern Cross Austereo both saw falls yesterday, with HT&E dropping 2.67%, and SCA falling 0.88%.
Last night S&P Dow Jones issued its quarterly rebalance of its ASX 300 index which tracks the 300 biggest companies. SCA was among those chopped from the index because its $245m market capitalisation is no longer big enough to be on the index.
Much of the reason for the decline in the Unmade Index lies in new data released from Standard Media Index on Wednesday, of which subscribers would already have been aware.
Media agency spend in January was down by 10% compared to the same month in 2022. Admittedly, January 2022’s spending had been rocket fuelled by a fading government using tax payer dollars to seek a pre-election advantage by spruiking its activities. And other advertisers were in full Covid bounceback mode back in 2022. Nonetheless, a 10% fall from that high is another signal of how this year is unfolding.
Broadcast television took a big hit in January, down 19.2%. That was only partly offset with spending on digital video rising 12%, but on a much lower base.
Radio was down 10%, while digital audio advertising only rose 1.4%. However, it’s worth noting that the SMI data doesn’t cover the spend that comes in directly (rather than via the agencies) which is a big part of the radio mix.
And newspapers went backwards significantly, with print advertising falling by a third. A third!
One of the pieces of background chatter over the last few weeks has been that CPMs delivered by programmatic advertising have been falling. Evidence of that is beginning to come through. Overall digital spend has dropped for two months in a row, while SMI says that programmatic revenue is in decline.
There were, however, a couple of outliers. What remains of the magazine advertising market saw a 29% jump in print advertising, admittedly off a low base. And cinema saw a 27% jump as it continued to recover. This is a year to take good news wherever you can find it.
Motio in motion
Motio, Australia’s second biggest ASX-listed out-of-home ad company, updated the market on its half year this week. Admittedly, there are only two listed outdoor companies, and the other one, Ooh Media, is almost 100 times bigger. But nonetheless, this is the first set of numbers Motio has reported since we commenced covering it on the Unmade Index, so it deserves a quick look.
Motio is a company that shares plenty of DNA with Ooh Media. Motio’s CEO Adam Cadwallader was previously group customer strategy director at Ooh, where he worked until 2019.
Since then, Motio has picked up a couple of Ooh Media castoffs cheaply - first of all its digital display network in medical and dental centres, for $300,000 back in 2020, and at the end of last year this year it bought Ooh’s cafe and venue network for $2.35m, although Ooh has provided a four year loan to fund the purchase.
Motio, incidentally, only came into being in May 2020, inside the shell of what had been cross track digital billboard operator XTD.
The company reported revenues of $2.8m for July to December last year - up from $2m in the same period in 2021.
It’s EBITDA (earrings before interest, taxation depreciation and amortisation) loss for the period was just over $200,000. That was an improvement on the $1.2m loss the same time the year before.
Perhaps Motio is a bit small to justify being on the ASX with the administrative costs that brings, buit it is growing.
With four digital screen networks covering medical centres, sports centres, cafes, and drink venues, it’s become a neat little group whose assets sit tidily together. One to watch.
TV after the switchoff
On Thursday we uploaded my podcast interview with Kim Portrate and Steve Weaver from Think TV.
It was a conversation about the organisation’s twice-yearly analysis of television trends.
What stayed with me afterwards is that the day the transmitters can be turned off is coming. Already, there are roughly 1.5m Australians who only consumer their free to air TV via streaming. They no longer have their set plugged into an aerial or dish.
That creates two fascinating questions.
One: Without the protection of the limited transmission spectrum, all the networks will have going for them to compete with everyone else is the power of their brands and the quality of their content.
And two: Who really owns that spectrum? There will be a moment when the TV networks no longer need it and the government wants it back to auction to the telcos. No doubt, the networks’ powerful lobbying skills will extract a price for that. Soon, that potential price will be the main way of working out what a broadcasting licence is actually worth.
More for Mutinex
Back when I started our occasional podcast series The Unmakers, one motivation was to get on the record, early in organisations’ lives, a chat with the founders before they became too busy and important to reach.
So far, the organisation which seems most likely to make it big is marketing investment analytics platform Mutinex, founded by Henry Innis and Matt Farrugia.
This week they announced another round of investment with a further $5m injected into the company, primarily from venture capital firm EVP. The deal values Mutinex at $37m.
There’s more to come. It’s likely that in the coming months we’ll see Innis head to New York to lead the global expansion. Marketers who start to use Mutinex for their investment decision making tend to stick with it.
Mutinex is going to go all the way.
And the rest…
Woolies’ insurance strategy: There was a rebrand this week, with Woolworths Insurance rebranding as Everyday Insurance. That also involved a new brand platform “Make Everyday Count”, via M&C Saatchi. I can’t figure out the strategy. With a brand as powerful as Woolworths, why downplay it?
HBO still home with Foxtel: Foxtel has again extended its content deal with Warner Bros Discovery. It would have been painfully expensive, but was worth it at almost any price for Foxtel Group to keep that HBO content at a time when it needs Binge to continue growing. With top tier sports rights also secured on a big price, it’s all about having an audience growth story when the time comes to try again to take Foxtel to a float.
Time to leave you to your weekend. If I haven’t exhausted my welcome, you can hear more from me on this week’s TV Blackbox podcast, where I was talking about the Nine and Seven financial results amongst other stuff. It was a lot of fun.
I’m off to collapse in a heap. Six newsletters in six days, alongside our conference, has been a bit much. I’m amazed toady’s email is only about ten minutes late.
Have a great weekend.
Publisher - Unmade
The Mutiny product is excellent and a credit to Aussie innovation. I agree that it will become a global leader
I chuckled aloud when I got to my unfortunate typo next to Matt's name... typos now sorted, thanks, John.
And on your main point re the networks... In an economically rational world, I'd tend to agree. But the networks would need to be incentivised to hasten the switchover, and would be able to drag their feet while they held the spectrum hostage until they extract a price. That's my guess, anyway...