BotW: Retail media on the ACCC radar as it launches a PR war on the supermarkets; TV's breakup continues
BotW: Retail media on the ACCC radar as it launches a PR war on the supermarkets; TV's breakup continues
Welcome to Best of the Week, mostly written on Saturday after an end of week trip into Sydney for the Publish Awards where Unmade was fortunate enough to pick up a couple of trophies.
Today: How the ACCC launched a highly effective, strategic PR offensive against the supermarkets with retail media its next target; and what Foxtel’s exit from OzTAM says about Australia’s TV market compared to overseas.
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Brands beware: ACCC’s supermarkets attack is PR used as an offensive weapon
It was a hell of a week for Coles and Woolworths. By which I mean hellish. Their worst PR week of all time.
The Australian Competition and Consumer Commission delivered a one-two punch.
On Monday the ACCC launched court action accusing both retailers of using dark patterns of price reductions - ahead of a price rise, shifting pricing artificially high for a few days before dropping it back down to the new, still higher price but promoting it as a reduction.
And yesterday, the ACCC released the next stage of its seperate, public inquiry into the sector - along with calling out a loss of customer trust in the supermarkets, and an abuse of market power, their retail media offerings Cartology and Coles 360 are now on the radar.
It created a week of awful, trust-eroding headlines for both retailers.
One aspect of this PR crisis for the supermarkets is that the ACCC has become sophisticated in using its media communications as a weapon when it decides that it is time to prosecute.
Take a look at the ACCC media release on its prosecutions. The release was not simply a neutral statement to announce a prosecution. It was a full summary of everything being alleged, along with simple, powerful examples of what it was claiming. It was PR as story telling. I wouldn’t have been the only journalist to have opened the press release and immediately understood the central issues. There was no legalese. Something that could have been arcane was carefully crafted into a story that the media and the public would immediately understand.
The media release dropped just after 9am on Monday morning. It was a non-Parliamentary sitting week and a relatively quiet news morning. It immediately captured the day’s agenda, guaranteeing top-of-bulletin coverage for the evening news shows on all channels, and front page newspaper coverage the next day.
Over and over I heard reporters explaining the alleged mechanics of the misleading price promotions. Seeing which was the wind was blowing in a cost of living crisis, the politicians joined in too, from the Prime Minister downwards.
That PR strategy is not PR for the sake of it. It’s PR that increases the likelihood of the ACCC winning the case. Both supermarkets will - or at the very least should - be considering how best to surrender and move on from the PR disaster.
Now the agenda has been set, fighting the battle in court will drag out the headlines, regardless of whether they win or lose. If there are technicalities to be argued - and they often are - that’s not how they’ll be covered.
It’s exactly the same way things played out on the ACCC’s ghost flights prosecution against Qantas, which kicked off a year ago this week. Again, check out the media release. The case was prosecuted in the media, not in court.
The early exit of CEO Alan Joyce, and Qantas settling with the ACCC became a likelihood because of the PR strategy. The same applies this time. There are awards for PR crisis management; there really should be awards for causing a PR crisis too, when used as strategically as the ACCC has played it. Public relations is often defensive. This was PR as an offensive weapon.
Cartel-ogy: The ACCC comes for retail media
One irony for the supermarkets is that the media coverage has been far worse than it might have been a few years ago. The supermarkets used to be huge spenders with the media which would have led to some caution from the commercial operations in how they told the story. Now, although the supermarkets still use traditional media channels for brand building, many of their price based promotions take place across their new retail media networks, where they get to bank that supplier promotional spend. The downside of that is they they have now got less economic influence to bring to bear on the media.
Just as the banking sector had its existential moment in 2017 with the establishment of the Royal Commission into misconduct in the sector, it is now the supermarkets’ turn. The ACCC’s ongoing Supermarkets Inquiry, which kicked off at the start of the year, published its interim report yesterday.
The prosecution had been running on a parallel track within the ACCC, although I’m sure the timing of both announcements this week is no coincidence. While ACCC chair Gina Cass-Gottlieb has fronted the prosecution, deputy chair Mick Keogh is the face of the inquiry. The ACCC says it has found that over the last decade consumers have lost trust in supermarket pricing claims; that suppliers are being forced to meet unfavourable terms and competitors are being hampered from entering the market.
Beyond yesterday’s press release, where it becomes particularly significant for the world of media, is that for the first time the ACCC has started looking into both players’ retail media networks. Key paragraphs from the ACCC’s interim report:
“Suppliers have also raised concerns that due to Coles and Woolworths buyer power, suppliers feel obliged to acquire ancillary services such as retail media and data analytics from the supermarkets to preserve their commercial relationship with Coles and Woolworths.
“Supermarkets provide retail media services through Cartology (Woolworths owned) and Coles 360. Suppliers have reported being expected to use supermarket-owned advertising services. Coles 360 advertising services includes social media, Flybuys member advertising and Coles magazines, but also in-shop promotional materials such as on digital screens, in-store sampling, digital search and homepage as well as Coles radio.Cartology offers similar services to suppliers to advertise through its retail media services.”
In other words, the ACCC says both supermarkets have been leaning on suppliers to shift their advertising spend away from other media channels and give it to them instead. There’s more:
“Some suppliers reported feeling obliged to take up offers to use the supermarkets’ in-house media services. This promotional funding is in addition to the promotional rebates discussed above or the supplier receiving a lower wholesale price from the supermarket during a promotional period because the retail price has been reduced.
“Suppliers of homogenous products, such as some fresh produce categories expressed particular concern about a lack of transparency regarding the funding they contribute to these marketing campaigns. For example, they report being asked to make a contribution to total spend on the campaign but they have no awareness of whether their required contribution is proportional to that of other suppliers of the same (homogenous) product. These suppliers also report to not have any awareness of how the funds are spent, beyond seeing the final results.”
Bear in mind this is just the interim report. Remedies or recommendations on legislation will follow later, with the final inquiry report due in February. It’s within the realms of possibility the ACCC may recommend forcing the supermarkets to divest Cartology and Coles 360.
If the government hasn’t gone early, that will make the topic an election issue. Politicians will compete for who can go hardest in their promises to legislate.
The fuse has been well and truly lit.
As the UK moves towards unified media measurement, Australia goes the other way
It was another significant week in Foxtel’s breakup with the TV establishment. As expected, the company said it will exit from OzTAM, the audience measurement system owned by Seven, Nine and Ten to focus on its own system built with Kantar.
In a press release, OzTAM’s boss Karen Halligan observed: “It is regrettable that Australia will not have a single, universal and independent body able to oversee and process both free-to-air and subscription TV measurement. Additionally, it is regrettable that agencies will no longer have access to a unified data source for evaluating advertising and content performance, despite the industry’s calls for a united, cohesive and comprehensive currency.”
True, and also a huge indictment of the TV industry’s inability to work collegiately. Foxtel’s choice to walk away was avoidable if its rivals had tried harder to keep it in the tent.
Conversely, this week the UK hit a major media milestone with the launch of cross media measurement tool Origin, which will for the first time allow advertisers to plan and measure advertising campaigns against reach and frequency across multiple media channels.
It’s a holy grail moment in the UK media. Cross platform measurement has been a topic for two decades.
Origin is a project led by ISBA (the Incorporated Society of British Advertisers). This week’s developments are another sign that if brands want something similar in Australia, they’ll need to do it themselves. Over to you, AANA.
Unmade Index loses ground after midweek surge
The Unmade Index gave back some of Thursday’s big gains yesterday, losing 0.88% after the previous’s day’s 3.85% jump.
On a much quieter trading day, Nine lost 1.9% having jumped 5.2% the day before. Ooh Media was the only one of the larger stocks to take its improvement into another day, rising by 0.4%.
Southern Cross Austereo lost 1% while smaller audio rival Sports Entertainment Group, owner of SEN Radio, lost 13.2%.
CotW: Telstra - Wherever we go
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:
Bespoke agency +61, led by Bear Meets Eagle On Fire, has breathed new life into Telstra with its 'Wherever we go' platform.
The campaign, times around grand finals season, launched with an inimated hero film featuring whistling duet of Islands In The Stream from two characters who move in perfect harmony through the forest and the desert, underground and underwater. Animated by Oscar-nominated duo, Smith and Foulkes, it’s imbued with a sense of nostalgia, while also feeling fresh.
The out of home execution isn’t “matching luggage”, and the attention to detail and roll out is just as epic as the film.
In case you missed it…
On Monday’s podcast we discussed news that James Warburton is dipping his toe back in the media waters:
On Tuesday, Woolworths and Coles were plunged into PR crisis as the ACCC launched legal action accusing them of deceiving customers with manipulative pricing strategies
On Wednesday we examined the PodPoll survey results which suggested further momentum for podcast listening
On Thursday we talked to the boss of Vinyl Group about the bumpy acquisition of Brag media and fire sale purchase of Mediaweek.
And on Friday, ahead of his presentation at next week’s REmade, Colin Lewis outlines the next set of challenges Australia’s retail media industry is facing
Time to leave you to your Saturday.
Cat McGinn and I will be back on Monday with Start the Week, ahead of Tuesday’s REmade conference. If you’re in retail media and haven’t got your ticket yet, you really do need to get your skates on.
Should AFL be your thing, enjoy this afternoon’s game. If it’s not, enjoy how quiet the shops will be.
Have a great weekend.
Toodlepip…
Tim Burrowes
Publisher - Unmade
tim@unmade.media
