Grant Blackley

Grant Blackley: How hackneyed stereotypes and digital fixation is giving advertisers tunnel vision and stifling brands

I wonder if for many advertising professionals, particularly those in major city centres, the term “regional Australia” conjures up mental images of farmers and real life Daisy Dukes, working the land, sheep dogs afoot and flannelette aplenty.

With these abstractions, you could forgive advertisers for believing it utter foolhardiness to target the regional audience. This would certainly explain a mere 9% spend in regional by national advertisers.

There is just one problem: almost nine million Australians live outside capital cities, representing 36% of the total population – and they’re certainly not all wearing wide brim hats and mustering cattle.

Contrary to widely held belief, most regional Australians are residing in large towns or cities, all of which are uniquely different. Towns such as Whyalla, Port Hedland and Dalby have little in common with large regional cities such as Canberra, Gold Coast, Hobart, Newcastle and Townsville, yet they are grouped together under one, all-encompassing term: regional.    

I know that most national advertisers have access to sales data at a regional level, so it begs the questions: What is deterring national advertisers and agencies from spending in proportion to the regional population, and are hackneyed stereotypes seriously to blame?

Australia’s major regional cities are prospering and tipped for continued growth in the years to come.  The Gold Coast is estimated to grow by 9.4% in the next 5 years, while Canberra and Wollongong will swell by 6.6% and 4.7% respectively.

Recent studies show the cost of living in Australia’s city centres is increasing faster than anywhere else in the world, encouraging people to purchase homes in regional locations, particularly those within relative proximity to city centres. The federal government has recently committed $222 million in its Regional Jobs and Investment Packages (RJIP) designed to drive economic growth in regional areas, galvanizing a positive outlook for regional Australia.

Australian Bureau of Statistics (ABS) data tells us that people in regional Australia have a lower cost of living than their metropolitan counterparts and have similar spending habits. So why are national advertisers all “fishing in the same pond” in metropolitan centres, when there are largely untapped markets right on the periphery?

It also begs the question: Why are advertisers prepared to pay a premium to reach the customer in a major city centre, when there is a potentially more profitable customer right on their doorstep?

Over the last few months I have met and discussed this phenomenon with several leading advertisers, who all without exception boast about the sales and margins they achieve in regional markets, yet in the same breath admit to not paying enough attention to these valuable markets. In one case, an advertiser admitted 50% of their gross annual sales were generated from regional markets, yet they had committed 100% of their advertising to the five capital cities to compete more aggressively with their peers.

Perhaps advertisers are favouring media which they personally consume, and therefore perceive as superior. I certainly hope this level of insularity would be scarce. Another explanation for the anomaly is that increased focus on digital and social media channels has redirected advertising dollars away from traditional media, though this logic is questionable. While indisputably an important touchpoint, digital and social should not be implemented to the detriment of proven and resilient brand-building media such as radio and television.

Digital and social remain poorly regulated and their impact is still largely unverifiable. While commercial radio is strictly regulated, providing a brand-safe environment, and its effectiveness is monitored by independent auditors, digital platforms are largely unfettered and continue to use misleading metrics and veiled algorithms, assuming monopoly positions from which they can determine what users do and don’t see. Moreover, the homogenous nature of social media removes the localism from advertising which all audiences, both regional and metro, are shown to favour.

Unquestionably, brand salience and campaign reach are among the most important attributes for growth, yet regional markets’ ability to grow brands seems to have been largely forgotten. I think it’s time advertisers and their agencies look at the stark facts, begin challenging their perceptions and overcome personal biases to determine how they can tap into highly prospective regional markets before their competitors figure it out first.


Grant Blackley is Southern Cross Austereo’s chief executive officer & managing director.

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Recent comments (5)
Wade Kingsley - The Ideas Business
3 Jul 2018 - 1:36 pm

Spot on from Grant Blackley here. Perhaps the term ‘non-metro’ explains it better than ‘regional’. After all, these valuable consumers are more accurately living in a non-metropolitan location rather than perceptually a ‘regional’ one. Big difference between Gold Coast and Dubbo. Branding of where they live is critical to overcome the obvious prejudice.

Practice What You Preach of Australia
3 Jul 2018 - 6:21 pm

So, what a business does in Dubbo is different from Whyalla, which is different from Gold Coast.

But yet why is it that SCA groups all those areas “together under one, all-encompassing” strategy and provide a majority of those areas with the same branding, marketing, music logs and same programming philosophies….?

Mick
4 Jul 2018 - 5:33 am

Interesting to hear him say ‘ localism from advertising which all audiences, both regional and metro, are shown to favour ‘ when SCA and other ‘ regional ‘ networks only have a few hours of local programming each day.

Grant Blackley
4 Jul 2018 - 12:36 pm

Dear Mick & Practice What you Preach,

For the record, SCA employ 1250 people throughout regional Australia creating , distributing and monetising our content. We have 74 regional radio stations within our network that serves many regional communities. It may be worth confirming that we invest heavily in local programming – and in major markets like Newcastle, Gosford, Gold Coast, Hobart, Bunbury, Townsville and Mackay (to name a few) we are live and local from 6.00am – 3.00pm each weekday! In fact, most markets have more local content than ever before – because we have invested over the past three years with that clear strategy and intention. To help monetise this investment – we have further invested in 25 new regional surveys (in the past 24 months) to help national agencies and advertisers better understand and invest with these markets.

I will also add that when we changed Television Affiliation from Ten to Nine – we invested and deployed with Nine – 105 new jobs in Nine Regional News – with journalists and accompanying resources deployed across 15 regional markets.

In regard to branding, we do not apologise for embracing these markets with consistent branding – as part of the MMM & HIT families – so that agencies, advertisers and stakeholders can interact and better understand the unique national position we hold and nurture across Australia. We are aiming to bring “scale & simplicity” to an otherwise complicated and broad set of assets.

SCA also believe that broadcasting entertainment like Carrie & Tommy, Kate & Hughsey, Kennedy Malloy and leading sports like the AFL and NRL – are not only valuable, entertaining, enormously powerful – but importantly respectful to these communities.

Regards,

Grant Blackley

Damo
4 Jul 2018 - 7:19 pm

Dear Mick and Practice What You Preach.

GB just owned you. Comments like yours are cynical and I’ll-advised to say the least.