Inside the wild, complex, obscure and incredibly important world of media buying
Dec 12, 2024
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Paul McIntyre, founder and publisher at MI3, dives into the intricate world of media buying. He discusses the shift from traditional advertising models and its impact on local content in Australia and New Zealand. The podcast highlights the cautionary tale of New Zealand’s stagnation as a warning for Australia's media landscape. McIntyre emphasizes the urgent need for regulatory changes and transparency in digital advertising, alongside the future challenges for journalism amid declining public trust and the rise of tech giants.
The shift to 'principal media' business model raises concerns about advertising transparency and the quality of journalism in Australia and New Zealand.
New Zealand's media struggles serve as a warning for Australia, emphasizing the need for regulatory intervention to ensure media sustainability.
Deep dives
The Advertising Landscape and Its Impact on Media
The podcast delves into the significant role that advertising plays as the primary revenue generator for media organizations in Australia and New Zealand. It is highlighted that local media companies rely heavily on advertising, which influences their ability to produce content. Decisions made by advertisers on where to allocate their budgets—such as choosing between platforms like YouTube or TikTok—are crucial, as these choices directly affect the viability of local news and cultural productions. The conversation underscores that shifts in the advertising landscape can have dire consequences for the health of media, echoing concerns about the relationship between advertising choices and the sustainability of quality journalism.
The Principal Media Model Explained
A new business model termed 'principal media' is introduced, which describes how media agencies generate profits by purchasing media inventory up front and selling it to clients for a markup. This model deviates from traditional practices where media agencies earned commissions on ad buys. While this allows agencies to secure guaranteed revenue, it can create a misalignment between client needs and how inventory is sold, often resulting in cheap inventory being used at the cost of quality journalism. It raises concerns about the fairness and transparency of the media buying process, highlighting how the model's consequences can harm publishers.
Comparative Perspectives: Australia vs. New Zealand Media
New Zealand is positioned as a cautionary tale for Australia in terms of media sustainability and regulatory oversight. The podcast discusses how, without proactive measures, Australia risks facing similar challenges currently seen in New Zealand's media landscape, where significant players have collapsed or are operating under duress. The Australian government's recent regulatory approaches stand in stark contrast to New Zealand's more passive political stance towards media and advertising, leading to a discussion on the potential consequences of such inaction. The implication is that New Zealand’s lack of intervention may serve as a warning for Australia regarding the importance of regulation in the media ecosystem.
Hope Amidst Challenges: The Future of Media
Despite the bleak outlook for many media organizations, there are reasons for cautious optimism regarding the future of journalism. The podcast speculates that ongoing legal battles and regulatory scrutiny of major tech firms like Google could lead to new revenue models for media companies. Class actions in Canada and Australia aim to hold these platforms accountable, potentially resulting in serious financial repercussions for them. Such developments could pave the way for a media funding structure that better supports quality journalism, suggesting there is still hope for a return to a more sustainable media ecosystem.
In the second of two episodes looking at New Zealand from Australia, Duncan Greive speaks to Paul McIntyre – founder and publisher at Mi3 – and one of the most credentialed journalists on advertising, tech and media in this part of the world. He wrote a story in late October which detailed the perverse incentives of the move to so-called "principal media", and how Australia's media looked at New Zealand as a cautionary tale to be avoided. We go deep into those topics and the tensions between content companies and big tech to try and get a deeper understanding of what has happened to advertising in recent years.