BOTW - The shoe edition: Adland's cobblers children, and a kick in the teeth over The Market Herald
Welcome to Best of the Week, written on a pleasant, chilly morning at Sisters Beach, Tasmania, after a busy 48-hour trip to Sydney.
Today: Why the media and marketing world needs to stop going on about the cobblers’ children and fix the bloody shoes; and the war for The Market Herald approaches the end game.
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The cobblers’ children grew up and left home, barefoot and resentful. They never got the shoes you promised them
Tim Burrowes writes:
One of the regular experiences of writing about the ad industry is being invited into creative agencies to hear about what they’re up to. The visit almost always unfolds in one of two ways.
It there’s a new team - and there often is - the CEO informs you that there is some amazing work in the pipeline which they can’t show you quite yet, but will completely change how the agency is viewed. That work will never emerge.
The people in those meetings aren’t lying, by the way. They’re just suffering from the optimism bias of having seen great ideas yet to be sullied by client approvals and compromised execution.
The second type of conversation , where the team has been in place for a while, comes after viewing the creds reel.
The agency CEO will confide that, ironically, they’ve not been very good at promoting themselves. “The cobblers’ children have no shoes”, they’ll say, with a chuckle. They always do.
For all of adland’s talk about marketing being essential to build businesses, in the back of their minds it comes with the unspoken caveat (“Except for us”.)
Try it now, if you like. Go on to any of the many trade press websites. Take a look at the ads. I guarantee there won’t be any ad agencies using that awesome power of advertising they keep talking about to advertise themselves.
Last week I was at the Advertising Council’s launch of accreditation. In the Q&A at the end, somebody in the audience asked if there would be a marketing campaign to promote the process. I got the distinct impression that the idea had not even occurred to those sitting on the stools at the front of the room.
In recent weeks, I listened in to the quarterly investor calls for some of the global media companies.
In the case of both Paramount Global and News Corp, the talk turned to where they’d be making savings in a tough environment. Both companies alluded to trimming marketing costs.
Media companies may champion the long and short of it, and argue the scientifically proven business benefits of outspending rivals in a downturn - but the chief financial officers still take a different view when they have a difficult profit number to hit. Whatever we try and tell ourselves, marketing is still seen as a variable cost, not an essential investment.
In the outdoor space, I’ve been wondering whether a factor in Ooh Media’s recent loss of market share to QMS Media was because of being significantly outspent by its rival on trade marketing. The 30% drop in market capitalisation a fortnight ago, when Ooh informed the market that it had fallen behind its rivals, amounted to a quarter of a billion dollar hit for shareholders.
Correlation doesn’t automatically equal causation in a market where QMS has launched its City of Sydney offering and Ooh has fewer digital assets. However, here’s an intriguing thought experiment: would Ooh have even needed to make that painful announcement if it had invested just 1% of that $249m in advertising itself to its potential clients?
The tradespeople’s offsprings came up again on Thursday, at Nine’s Big Ideas Store (itself a trade marketing initiative of course), in a session on justifying marketing.
Rugby Australia’s chief marketing officer Marissa Pace bemoaned the challenges facing marketing teams in helping their wider organisations understand the value they were bringing.
Pace shared the challenger of the marketer talking to the wider C-suite. “You find yourself in a hole where you’re constantly defending yourself.”
Nicki Kenyon, director of Nine’s Powered marketing services team, offered a new twist on the cobblers’ children: “It’s like the plumber who never tends to his own sink.”
“We’re terrible at doing it for ourselves,” Pace agreed.
Later, Pace acknowledged the truth about how CFOs really see marketing: “As everything gets squeezed, marketing is not put at the strategic level of the business. It’s a service, ‘you guys can do more with less’. The trouble is, if you’re successful they expect even more with less.”
I’ve got to the point where I’ve lost patience with those meetings where an agency CEO shrugs and talks about the cobblers’ children. It is, as they say in the UK, a load of cobblers.
Congratulations - you’ve diagnosed you’re deficient at what should be your core competency. How about you do something about that?
Market Herald: Waiting for the other shoe to drop
The first shoe dropped yesterday on The Takeovers Panel’s investigation into the shenanigans going on at The Market Herald.
By dropped, I mean the Takeovers Panel dropkicked major shareholders The Argyle family in the face.
The future ownership of The Market Herald, investment forum Hot Copper and classified sites Gumtree, Carsguide and Autotrader is now entirely in the air.
The Takeovers Panel has been investigating the governance of The Market Herald for the last three months. It has been exploring whether ASX rules on control of companies has been followed. There are strict rules to ensure people can’t quietly take control of listed companies without paying a takeover premium.
The panel has made a formal Declaration of Unacceptable Circumstances. More on what that technical language means in a moment.
It’s a story which has taken many twists in the eight months in which Unmade has been covering it.
The Unmade podcast: Jag Sanger of The Market Herald on buying Gumtree and Carsguide, and launching a newspaper
Back in September, it looked like a very different tale. TMH, owner of Hot Copper, which still looks like an old school online bulletin board, was preparing to take a front seat in the world of classifieds. Having launched small cap news and video site The Market Herald and prepared for the launch of a weekly business newspaper, the next step was to buy Gumtree, Carsguide and Autotrader for $87m.
The CEO was Jag Sanger. After we uploaded our podcast interview with him, it was intriguing how many people who had crossed paths with him asked me some version of “So… what do you make of Jag?”
Sanger is direct and driven, and was on a mission.
Then by December, Sanger was suddenly out, having clashed with fellow board director Gavin Argyle.
BOTW: Exclusive - Inside the The Market Herald's civil war; winners have parties; Media agencies' $8bn year
Those who’d seen Gavin Argyle address staff may have concluded he was simply an eccentric, loose cannon. They might have have wondered whether Sanger’s ousting was some form of jealousy over all the attention he was getting around the Gumtree acquisition.
But the Argyle family are also shrewd business people. Gavin Argyle’s CIP has profitably taken over companies on a number of occasions over the last two decades. I don’t suggest there was anything illegal on those occasions.
Gavin Argyle owns about 6.5% of the company in his own right. His father David (who also goes by the name of Brian) holds about 37%.
The Takeovers Panel was asked to investigate by Bermuda-based United Investment Ltd. UIL, headed by Duncan Savile, owns a stake of around 23%. UIL was concerned that its rights as a shareholder were not being respected.
His complaints related to failures of the Argyle family to make the correct legal declarations that they were working together, and undeclared manoeuvres which would seem them increase their shareholding via other people.
The Takeovers Panel has now decided that there were indeed dubious circumstances.
Yesterday’s summary pointed in particular to Argyle’s CIP lending staff money to buy shares in TMH during the fund raising to buy Gumtree, and points out that those shares appear to have almost immediately been sold on to Argyle, without being declared.
There had been “numerous contraventions”, the panel said.
Perhaps even more challengingly for the Argyles, the panel points to evidence of information being shared which was not available to the wider market. The panel’s report doesn’t use the words “insider trading”. That would be for ASIC to get into.
Insider trading, if it occurred, would be a criminal rather than civil matter.
Ten days ago, ASIC cancelled the Australian financial services licence of CIP, as it happens.
That other shoe will drop when the Takeovers Panel releases its full report in the coming days and rules what happens next.
Savile’s original complaint had called for illegally acquired shares to be released back onto the market, and for the Argyles be temporarily banned from exercising any voting rights.
Along with any civil or criminal consequences for the Argyles, such an order on the shares would opens up a very real possibility of Savile asking Sanger (who himself owns about 5% of the company) to return to the helm.
There’s plenty more to follow.
The Week in AI: Rogue AI, and ChatGPT in an app
Cat McGinn, curator of humain | human creativity x AI writes:
OpenAI has launched a mobile iOS app for its AI chatbot, ChatGPT. Initially limited to U.S. users, the app is free, currently ad-free, allows for voice input and offers GPT-4 capabilities to ChatGPT Plus subscribers. It could act as a compelling alternative to Siri or Google, given its integration with the Whisper speech recognition system and the ability to sync users' history across devices. An Android version is expected soon. This release is significant, considering the potential for disruption in how people search and interact with information on mobile devices.
Regulate me, daddy
The launch comes days after OpenAI’s CEO Sam Altman appeared in front of a senate committee to plead for legislation for AI. He urged the establishment of a new agency to license AI projects, set safety standards, and conduct audits for safety compliance. Altman also suggested labelling for AI content akin to that used in food nutrition standards, echoing Adobe’s Content Authenticity Initiative.
Transform and roll out
Alibaba is preparing to spin off its Cloud Intelligence Group, making it an independent, publicly listed company. The Group, whose products are akin to a blend of AWS, Slack, and OpenAI, dominates China's cloud market and includes the Dingtalk productivity platform and the Tongyi Qianwen language model. Alibaba intends to complete the spinoff in the next 12 months, involving external strategic investors via private financing. It’s a strong indication of the focus on AI in the Chinese market.
She’s lost control
The first ever AI-powered “virtual girlfriend” launched a few weeks ago by Snapchat influencer Caryn Marjorie has “gone rogue” according to the bot’s owner.
The influencer was the first to launch an AI-powered chatbot modelled on her own voice and trained on her video content. CarynAI was designed to provide fans with a "virtual girlfriend" experience. The bot, based on OpenAI's GPT4 software, went viral when CarynAI, which offers private, personalized interactions, generated $71,610 in its first beta testing week, with over 1,000 users paying $1 per minute. It quickly sparked controversy and ethical discussions, which intensified after users claimed the chatbot engaged in "sexually explicit" interactions.
Marjorie issued a statement saying that the AI was "not programmed to do this and has seemed to go rogue.”
Unmade Index finishes week with a spike
Seja Al Zaidi writes:
The week ended with a slight lift for the Unmade Index, our measurement of the performance of ASX-listed media and marketing stocks. It rose by 1.79% to land at 649 points.
Seven West Media was biggest winner of the day, scoring a 2.67% rise in its share price. Domain and Ooh Media followed closely, with 2.40% and 2.39% increases in their share price, respectively.
Radio company HT&E (now ARN Media) 1.41%.
Time to leave you to your Saturday.
Abe Udy and I will be back with Start the Week on Monday.
Have a great day.
Publisher - Unmade
Reminds me of the network tv programming head who told me that the network didn't require any marketing because "we have promo airtime".
The stock-swami is on a roll here attacking management and asking for them to resign and sell their holdings in $TMH. swami is also a strange person.