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MEDIACOM Marketing Digest 20 July 2004

MEDIACOM Marketing Digest 20 July 2004

Top AdSpenders January-June 2004 Reported Advertising Spend figures for the first half of the year have just been published by Nielsen Media Research, and the usual suspects top the list. For the record, the top twenty AdSpenders, based on reported expenditure at ratecard (and compared with the same six month period in 2003), were:

1. The Warehouse $13,908,480, up 14% 2. Land Trans.Safety Auth. $11,656,689, up 16% 3. Farmers $11,365,383, down 2.5% 4. New World $11,349,689, up 14% 5. McDonalds Restaurants $9,370,476, down 2.7% 6. Lotto $7,807,293, up 0.1% 7. Harvey Norman $7,158,742, up 37% 8. Countdown Supermarkets $6,837,923, up 41% 9. Vodafone Consumer $6,756,763, up 45% 10. Pak N Save $6,262,291, up 42% 11. Telecom Mobile GO27 $6,069,131, up 152% 12. Briscoes $5,273,358, up 16% 13. Noel Leeming Appliances $4,968,580, up 9% 14. Family Health Diary $4,717,935, up 115% 15. House Of Travel $4,543,417,down 3.6% 16. Rebel Sport $3,992,543,down 4.8% 17. ACC $3,986,469, down 9.8% 18. Watties Food in a Minute, $3,886,870, up 15% 19. Foodtown/Woolworths, $3,748,802, down 42% 20. Smiths City, $3,742,025, down 8%

We have highlighted a few of the Top Twenty, and note:

* Spend patterns in the supermarket sector have changed to mirror new market realities, with significantly increased focus (40%+) on Pak N Save and Countdown, inflation-adjusting increase on New World and duopoly-reflecting decrease on Foodtown/Woolworths. * Telecom's GO27 campaign heats up to record levels, as Telecom Mobile spend switches from analogue to digital - with particular emphasis on the new and much-hated $10TXT deals? * Family Health Diary spend increases dramatically, as more advertisers support the quasi-advertorial offering. No doubt FHD are wise to the risk of diluting the franchise through over-exposure ... * Rebel Sport's reported adspend is down as the newly-listed retailer diverts dollars to BTL Super 12 sponsorship. * Reported spend on Wattie's Food In A Minute programmettes is up 15% which is a direct indicator of media rate inflation over the period.

The most curious anomaly of the six month period: reported television advertising spend for the period was actually down $17 million on the same period in 2003, while all other media showed increases. Is this the first indicator of the long-awaited media slowdown, or simply a statistical curiosity? We await with interest reports on actual income over the period, from the TV Broadcasters' Association!

Digital Radio On Show In Oz The world's first digital radio which lets users pause, rewind and record live radio went on display in Sydney earlier this week as part of a showcase of radios set to revolutionise radio listening. The Bug, by PURE Digital, looks strikingly different and includes advanced features which allow listeners to:

* Pause live radio and then restart from where they left off * Rewind radio by 5-12 minutes and play it again * Rewind and record a segment and play it back, or convert to MP3 on your PC for playback on a portable MP3 player * View a high-resolution display screen showing scrolling text such as artist, song titles, news, sports results and more * Set the timer and record favourite programs to SD card and listen to them later.

The Bug is one of a range of new receivers on show at the Domayne store in Sydney's Alexandria for the next three months. The digital radio centre is an initiative of the commercial radio industry, which is keen to introduce digital broadcasting technology across Australia.

Digital radios sales have grown by over 200 per cent in the UK over the past year, and new models being developed for release in the next six months will be able to broadcast pictures and logos, such as images of artists or traffic maps.

The Australian commercial radio industry and public broadcasters are conducting trials of digital radio in Sydney but the Government has yet to develop a policy framework for a national roll out. Research shows 68% of Australians would be interested in buying a digital radio if the service was available.

The technology is starting to take off worldwide, with more than 300 million people now receiving up to 600 digital services. There were 60 different digital radio receivers commercially available at the end of 2003 and this is set to double by the end of 2004.

In the UK there are nearly 4.7 million listeners tuning into digital-only radio stations each week, with 29% listening via their TV (cable or satellite). Another 13% of adults have listened to digital radio via the internet.

The typical UK digital radio purchaser today is 51 years old and male (yes, Big Boys and their toys!), but future growth is predicted to come from the notoriously fickle youth market with its extreme sensitivity to price and fashion trends.

What about digital radio for us Kiwis? The Ministry of Economic Development has drawn up draft proposals for the allocation of 13 channels to digital audio, each channel capable of carrying five stereo signals, for a total of 65 programme strands per region. In response to a request for industry feedback, the Radio Broadcasters Association (RBA) has recommended that Digital Audio Broadcasting be planned for delivery by both terrestrial and satellite means - satellite for coverage of remote areas and terrestrial to reflect the local nature of the radio advertising business, and also the technical limitations of satellite delivery into high density urban areas.

The Government's proposed 13 channel plan is seen by the RBA as inadequate particularly as some services will need to be delivered both by satellite and terrestrial technology.

The RBA also argued that the timing for possible introduction should be driven by consumer penetration of Digital Audio Broadcasting receivers, which are still costly. But who would buy one, without any signals to receive?

So digital radio remains in the future in New Zealand. But, with gadgets like The Bug providing supercharged radio possibilities, we'll be agitating for the switch to digital sooner rather than later. Care to sign our petition?

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Text2Win Criminalised? The Gambling Act 2003 came into force at the start of this month, and has a number of provisions that impact on the legality or otherwise of Sales Promotion schemes. An unintended outcome of the Act may be to wreak havoc on the texting industry - at least for its fast-growing use as an entry mechanism for contests and promotions.

The Department of Internal Affairs, who administer the new Act, offers this advice about Sales Promotions:

What is a Sales Promotion Scheme? A Sales Promotion scheme is defined by the Gambling Act 2003 as gambling that does not involve a gaming machine, a prize that is prohibited, or used by a creator, distributor, or vendor of goods or services to promote the sale of those goods or services if-

1. Participation in the gambling requires a person to purchase the goods or services promoted for a price not exceeding the usual retail price; and 2. The date or period on or over which the outcome of the gambling will be determined is clear to the participant at the time and place of sale; and 3. The person is not required to pay direct or indirect consideration other than to purchase the goods or services promoted; and

4. The outcome is determined- (i) Randomly or wholly by chance; or (ii) Partly by chance (whether chance plays the greater or lesser part) and partly by the application of some knowledge or skill.

Does a Sales Promotion Scheme Need a Licence? Your sales promotion does not need a licence, but it must conform with the definition of sales promotion scheme set out above.

If your promotion does not match this definition, it may be illegal.

Entry into Sales Promotion Scheme Customers must pay no more than the usual retail price of goods or services to enter sales promotion schemes. Your promotional material should state what and how much the customer has to purchase to enter the promotion. For example, they might have to buy one item, or spend a specific amount of money on the promotional product to enter.

Under the Act a scheme does not come within the definition of a sales promotion scheme if more than the usual retail price is asked for the good or service as a condition of entry.

A sales promotion scheme may not be legal:

* If it is operated via remote interactive gambling, (e.g. over the internet, by phone or text) the exception is a lottery run as a sales promotion * If it is conducted from overseas.

Example: A retailer runs a lottery as a sales promotion scheme to sell chocolate bars worth $1.00 each. The winner of the promotion will get a new car.

* The competition is an illegal lottery if: Customers buy a chocolate bar, fill out an entry form and then pay 50 cents more to enter. This is because the customer is charged more than the retail cost of the chocolate bar to enter the promotion. * The competition is a sales promotion scheme if: Customers buy a chocolate bar, fill out an entry form and go straight into the draw to win a car. This is because the customer does not pay more than the normal retail price of the chocolate bar to enter the promotion.

Do Sales Promotion Schemes have a Time Limit? The Gambling Act 2003 says that sales promotion schemes must be run within a specified period of time. The time limit should be made clear in promotional material.

Are there any Prohibited Prizes? It is illegal to offer some items as prizes for sales promotion schemes. Presently prohibited items include:

* Firearms and ammunition * Liquor * Second hand goods * Land not zoned residential (e.g commercial or industrial land) * Vouchers or entitlements for the above

Regulations about prohibited prizes are currently being reviewed.

Are Sales Promotions that require entry by Texting or 0900 number illegal? We suspect they are, under the new Gambling Act, which prohibits "direct or indirect consideration other than to purchase the goods or services promoted". Typically, Text To Win promotions cost money to enter.

We suggest you talk to the legal eagles before considering any text-based sales promotion. The court appearance you save may be your own.

Battle of the Bulge Kiwis are the self-confessed heavyweights of Asia Pacific, according to a new consumer confidence survey from A C Nielsen. Some 67 percent of those surveyed in New Zealand say they consider themselves either a little, somewhat or very overweight. Across the Asia Pacific region, 54 percent of those surveyed consider themselves to be either a little, somewhat or very overweight.

However, some 71 percent of Kiwis surveyed say they are trying to lose weight, presumably including some people who don't consider themselves overweight. Across the region, some 69 percent were trying to lose weight - significantly more than those who perceived themselves as overweight.

With 71 percent of New Zealanders trying to lose weight, how are they planning to do it? Some 28 percent said they were trying to cut down on fats (compared with 51 percent of Indonesians). More than other populations in the region, Kiwis are targeting sweets, with 25 percent saying they planned to cut down on chocolates and sugars. Some 12 percent says they used Weight Watchers or another slimming programme.

Another two percent say they use diet pills, compared with 12 percent of Singaporeans. However, together with the Japanese, we lead the region in carbohydrate avoidance with eight percent pinning hopes on the Atkin's Diet. Only one percent said they used a vegetarian diet as part of their diet plan, which was the region's lowest result and reflects our meat farming and meat eating heritage.

Keeping Fit More Kiwis exercise regularly than any other population in the region, with 44 percent saying they exercise at least three times a week, and 19 percent saying they exercise daily. This is over twice the regional average of eight percent. Of these, 79 percent said that when they exercised, it would be between 30 minutes and over an hour.

Some 27 percent of people in Asia Pacific never exercise. Lagging farthest behind are the Japanese with 47 percent saying they never exercise. Following closely are the Thais, with 38 percent saying they never exercise, and 31 percent of Hong Kongers saying they never exercise.

Our national obsession with team sports does not extend to actual participation, with only six percent of Kiwis regularly taking part in a team sport, compared with 22 percent of Chinese and 13 percent of Hong Kongers. The only nationality with a lower rate of team sport participation was India at five percent.

Also surprising, given our vast coastlines and outdoors lifestyles, Kiwis ranked at the bottom of the region for swimming, with only three percent saying they swim regularly, compared with 10 percent of Indonesians and 12 percent of Singaporeans. Some 51 percent of us regularly walk or jog, 14 percent work out or lift weights at a gym, and three percent use aerobics.

It's Not Our Fault We've previously reported on plans by various governments to control obesity by restricting food advertising, especially that aimed at children. Whilst it's reassuring that we have official endorsement of the effectiveness of advertising, such legislation is unlikely to transform any nation into slim, trim and terrific.

Now, research studies are emerging around the world to show the public doesn't blame food companies or junk food advertising for the rising problem of obesity in kids. Still, many people, however, believe that fast food should carry cigarette-style health warnings.

Warning: the Government has determined that food makes you fat. Kinda up there with the labelling on packs of peanuts: may contain nuts. .

Over 100 Million Apples Served Apple Computer reported last week that its iTunes online digital music service reached 100 million downloads on July 11th. The milestone, which the company had been anticipating for several weeks, was achieved when 20-year-old Kevin Britten of Kansas downloaded the song Somersault, performed by the band Zero7. As part of a promotion run by Apple, Britten received one of the company's 17-inch PowerBook notebook computers, along with a 40GB iPod digital media player and a gift certificate for 10,000 free downloads from iTunes.

The iTunes service, which launched roughly 14 months ago and clocked 70 million song downloads in its first year, continues to grow rapidly in the United States and around the globe. Consumers pay Apple 99 cents per song for most iTunes tracks. In June, Apple launched iTunes in Europe and sold more than 800,000 songs during the service's first week in business.


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