Regional TV Essentials

August 2011

Brian HoganGeneral Manager RTM

www.regionaltvmarketing.com.au

RTM is the marketing bureau for Regional free to air TV

Training agenda

• Market structure

• Demographics & social outlook

• Spending and economic outlook

• Media consumption and outlook

• Effectiveness studies 

Regional TV Markets

Regional TV provides three main networks and FTA multi channels to all areas outside 5 cap. cities

QLD

NNSW

SNSW

TAS

VIC

REG.SA, MILDURA,

GRIFFITH

REG. WA

SATELLITE

Regional TV markets total 36% of Australian population

SydneyMelbourne

Reg NSWBrisbane

PerthReg QLDAdelaideReg VIC

SA/SAT/DAR/MIL/GRIFWATAS

0m 1m 2m 3m 4m 5m

4,6354,528

3,4892,982

1,8561,764

1,4081,171

969585

510

People

Source: ATR & OZTAM 2011, Nielsen Media Research 2010

NNSW 2,079 SNSW 1,410

Major regional markets are know as “Aggregated markets”

• Rural markets

QLD

NNSW

SNSW

TAS

VIC

REG.SA, MILDURA,

GRIFFITH

REG. WA

SATELLITE

Regional TV markets do not follow state lines or expected “regional and rural” profile

• Rural markets

QLD

NNSW

SNSW

TAS

VIC

REG.SA, MILDURA,

GRIFFITH

REG. WA

SATELLITE

Aggregated markets can be split to “sub-markets”

• Rural markets

QLD

NNSW

SNSW

TAS

VIC

REG.SA, MILDURA,

GRIFFITH

REG. WA

SATELLITE

Aggregated Markets

QLD NNSW SNSW VIC TAS

Sub markets

Cairns Northern Rivers

Canberra Albury Hobart

Townsville Tamworth/Taree

Orange/Dubbo/Wagga

Bendigo Launceston

Mackay Newcastle Wollongong Shepparton

Rockhampton

Gippsland

Maryborough

Ballarat

Toowoomba

Aggregated Markets

QLD NNSW SNSW VIC TAS

Sub markets

Cairns Northern Rivers

Canberra Albury Hobart

Townsville Tamworth/Taree

Orange/Dubbo/Wagga

Bendigo Launceston

Mackay Newcastle Wollongong Shepparton

Rockhampton

Gippsland

Maryborough

Ballarat

Toowoomba

Further non-surveyed signal splits available:Sunshine CoastCentral CoastGold CoastWollongongWagga Wagga

Rural markets – aka “diary markets”

Regional WAGWN (7)

WIN (9,10)

Port Pirie/ Broken

HillGTS/BKN (7)

STHN X 10 (10)

SatelliteIMPARJA (9)

SEVEN CENTRAL (7)

GriffithWIN (9), WIN (7)

MilduraWIN (9), PRIME (7)

DarwinNINE/NTD-8 (9)

STHN X DARWIN (10)DARWIN DIGITAL TV

These markets have two FTA stations, except Darwin and Mildura which have 3.

Loxton/Mt Gambier

RTS/SES (10)WIN SA(7)

Satellite broadcasts into 5 states and territories

PORT PIRIE & BROKEN HILLPop: 137,000

GTS/BKN (7)STHN X 10 (10)

NTPop: 94,136

22% of SATELLITE

IMPARJA (9)7CEN (7)

Rural QLDPop: 173,381

41% of SATELLITE

Rural NSWPop: 80,366

19% of SATELLITERural VIC

Pop: 33,8138% of

SATELLITE

Rural SAPop: 42,481

10% of SATELLITE

Loxton/Mt Gambier

Pop: 126,000WIN SA (7)RTSSES (9)

Source: Nielsen Media Research Regional TV Diary Markets

Gold Coast

Cairns

Townsville

Mackay

Sunshine CoastToowoomba

Newcastle

Wollongong

Central Coast

Bendigo

> 500,000> 500,000

> 250,000> 250,000

> 100,000> 100,000

> 50,000> 50,000

Population:Population:

Bundaberg

Rockhampton

Tweed/Byron

Ballarat

Launceston

Hobart

Albury/Wodonga

MandurahMandurah

BunburyBunbury

Canberra

Canberra

80% Urbanised

www.regionaltvmarketing.com.au

RTV Google maps API

RTV Google maps API: Submarket level

Gippsland Wikipedia link

WORKSHOP - in pairs

match markets to map

Sub-markets & rural markets

1. Maryborough2. Northern

Rivers3. Canberra4. Bendigo5. Cairns6. Newcastle7. Wollongong8. Albury9. Tamworth/

Taree10.Launceston11.Toowoomba12.Gippsland13.Hobart

14. Rockhampton15. Ballarat16. Orange / Dubbo / Wagga17. Mackay18. Shepparton19. Townsville20.Satellite21.Pt. Pirie/Broken Hill22.Loxton/Mt. Gambier23.Griffith24.Darwin25.Regional WA26.Mildura

1

3

2

5

4

6

78

9

10

11

12

13

23

26

21

22 1

5

142

0

17

16

19

24

M

25

18

P P

A

B

S

Demographics

Urbanisation and high population growth changing the profile of regional Australia

• Lower cost of living and lifestyle are main attractions

• Rural populations moving to regional hub towns

• Less than 4% of households depend on farming

3 %7live in Regional TV markets

Source: OzTam AGB Nielsen 2011

1,573,000

Australian teens age 13-17

3 %3live in Regional TV markets

Source: OzTam AGB Nielsen 2011

3,035,000

Australian youths age 16-24

3 %9Source: OzTam AGB Nielsen 2011

3,141,000

Australian 55+

live in Regional TV markets

Regional Hyundai buyers

slightly older, affluent and

female vs. metro buyer

Source: Roy Morgan Research (12 months to Sep 2010 - own new Hyundai bought in the last 5 years)

% Hyundai buyers Metro Regional

Average age 50yrs 54yrs

Male: Female 42:58 39:61

Already retired 22% 28%

Own home outright 44% 49%

Household income $100k+ 28% 28%

Seachange…

… 20% for baby boomers

…80% for families

“Typical” Seachanger

Ryan, 36. Wollongong NSW

Made the seachange from the “Shire” to the “Gong”. Owns a small business in building trade

Above average income & primary focus is kids and lifestyle.

Loves footy , cars and teaching kids surfing.

Population Increase: 2001 vs. 2011

Source: ATR & OZTAM 2011

Australian population moving North and to the coast. Over 30% growth in 10 years in some regional areas

MARYB

MACKA

YBRIS

NOR RIV

CAIRNS

TOW

NS

PERTH

ROCK

TOOW

CANB

GIPPS M

EL

TAM/T

AR

ALBURY

WOLL

BALLSY

DADEL

NEWC

HOBART

BEND

LAUNCE

SHEP

P

O/D/W

0%5%

10%15%20%25%30%35%40%45%

National average

QLD NSW VIC TAS METRO

Regional people start their family life

younger than in the capital cities

Source: Roy Morgan Single Source (12mths to March 2011)

Women 18-24 Metro Regional

Employed full/part time 61% 66%

Married/De facto 19% 30%

Children in the household 31% 37%

HHI $100k + 16% 18%

Personal income $50 + 7% 9%

Regional Mum’s spend more on

groceries due to more kids

GBs with Kids Met Reg

$200 or more spent on grocery P/Wk 46% 53%

Have favourite brands and tend to stick to them 69% 65%

Quality is more important than price 70% 69%

Have 3 or more kids 19% 22%

Source: Roy Morgan Single Source (12mths to March 2011)

Regional is perfectly representative of the dominant Australian lifestyle: Suburban

ExperientialInternationalLibertarian

ExperientialInternationalLibertarian

PracticalCommunitarian

Self Reliant

PracticalCommunitarian

Self Reliant

Upwardly MobileMaterialist

Family Focused

Upwardly MobileMaterialist

Family Focused

PragmaticFunctionalPatriotic

PragmaticFunctionalPatriotic

YouthfulTechnological

Energetic

YouthfulTechnological

Energetic

ConservativeInstitutional

Self-Controlled

ConservativeInstitutional

Self-Controlled

InnerMetro23%

Outer Metro41%

Regional36%

www.regionaltvmarketing.com.au

According to David Chalke social

researcher….

Spending and economics

Savings are at an all time high in both regional and metro markets

2006 2007 2008 2009 2010 20110

100

200

300

400

500

Metro Regional

Saving per discretionary $1000

Source: foreseechange 2005 – 2010: annual average, 2011: June 2011 survey

The need to pay debt continues to decline in regional but is growing in metro markets

Source: foreseechange 2005 – 2010: annual average, 2011: June 2011 survey

2006 2007 2008 2009 2010 20110

100

200

300

400

500

Metro Regional

Loan Repayment per discretionary $1000

Regional consumers’ willingness to spend grew this year by 9% – against national trend

Source: foreseechange 2005 – 2010: annual average, 2011: June 2011 survey

2006 2007 2008 2009 2010 20110

50

100

150

200

250

300

350

Metro

Spending per discretionary $1000

2003

2004

2005

2006

2007

2008

2009

2010

Jan-

Jun

2011

-10%

-5%

0%

5%

10%

15%

10%

4% 3%

-1%

9%

-4%

-9%

13%

-7%

11%

8%

5%

-5%

8%

-4% -4%

7%

-5%

Metro Regional

New car sales grew in regional by 7% YOY – off back off better 2009 than metro

YOY change in new car sales

Source: VFACTS (excluding trucks and buses, including utes)

Home price to income ratio is significantly lower in regional TV markets

Sydney Melbourne

Brisbane Adelaide

Perth

5.6 5.6 4.2 4.3 4.3

NNSW SNSW Reg. VIC Reg. QLD Tasmania Rural

4.2 3.9 3.1 3.7 3.8 2.8

House price vs. income multiple

Source: Residex median house *(includes apartment price) Jan – Jun 2011 & Roy Morgan Single Source 12 mths to March 2011

Average household incomes in regional TV markets are within 10% of national average

Regional Metro

NNSW $89,690 Sydney $112,380

SNSW $102,500 Melbourne $101,840

Victoria $84,470 Brisbane $104,970

Queensland $95,080 Adelaide $91,530

Tasmania $84,170 Perth $119,600

Rural $106,690

Source: Roy Morgan Single Source (12mths to Mar 2011 )

P25-54: Average household Income

20%

of regional consumers are willing and able to spend

20%+13% YOY

of regional consumers are willing and able to spend

Incomes in regional and rural Australia are growing well above the national average

Metro National Regional Rural0%

20%

40%

60%

80%

+38% +42% +48%+63%

Average household income growth since 2004 (P25-54)

Source: Roy Morgan Single Source (12mths to Mar 2011 – 2004 )

2005 2006 2007 2008 2009 2010 20110%

5%

10%

15%

20%

25%

Metro Regional

Rapid growth in the number of affluent consumers in regional Australia

Source: Roy Morgan Single Source (12mths to Mar 2011 – 2004 )

People 18-64 with HHI $130k+ or Investments $500K+

Regional consumers are more optimistic about their current financial outlook…

…and are more likely to spend on discretionary items over the coming year.

MEDIA

Media landscape in regional markets is broadly similar to capital cities

People 25-54 Metro Reg

Watch 2hrs+ TV per day 50% 58%Listened to any commercial radio

weekday 66% 62%

Accessed the internet 87% 85%

Watch daytime TV 71% 76%

Own digital TV at home 74% 79%

Whether subscribe to Pay TV 28% 27%

Saw outdoor 51% 26%

Source: Roy Morgan Single Source 12 months to March 2011, *AGB NMR Panorama 12 mths to May 2011

• News & current affairs• Local TV ads• Promotions • Community sponsorships• Lifestyle shows

TV plays a greater role in regional life…it’s part of

the community

Reg. TV CPM (cost per thousand) is 40% below national TV average – proportional investment 23% of national TV budget to reach 36% of audience

SYD MEL BRI ADE PER NNSWSNSW VIC QLD TAS40

60

80

100

120

140

160

180164

104

98

7989

71 70

5361

70

Ind

ex

TV market CPM indicesNational average CPM P18+ = 100

Source: Regional TV Agency Survey 2010

SYD19%

MEL19%

BRI12%

ADE6%

PER8%

Reg36%

SYD34%

MEL21%

BRI12%

ADE5%

PER7%

Reg23%

Share of national population

Share of national TV budget

Higher cost efficiency of regional TV is opportunity to push growth harder than in metro

13/06/2010

27/06/2010

11/07/2010

25/07/2010

8/08/2010

22/08/2010

5/09/2010

19/09/2010

3/10/2010

17/10/2010

31/10/2010

14/11/2010

28/11/2010

12/12/2010

26/12/2010

9/01/2011

23/01/2011

6/02/2011

20/02/2011

6/03/2011

20/03/20110%

5%

10%

15%

20%

25%

Metro Regional

Launch week of 7mate &

Gem

Launch week of Eleven

Audience share of the new commercial “digital” channels has more than tripled since June 2010

Source: Mediaweek, Metro data from OzTAM and Regional data from Regoional TAM. All People 18:00 - 23:59

June 2010 Sept 2010 Dec 2010 March 2011

• Subscription TV audiences are down in all key dayparts for the Survey Year to Date• FTA viewing is up & commercial TV even more

Source: Regional TAM; Survey 1-2, 2011 vs. 2010; Consolidated Data

New commercial channels driving Free to air TV audiences up in 2011

Audience Year on Year % Change; Combined Agg Markets (QLD, NNSW, SNSW, VIC & TAS)

Total People; Sun-Sat; Survey 1-2, 2011 vs. 2010

Proving effectiveness& “ROI” of Regional TV

Vaseline Market Mix Modelling

Analysis

Case Study

July 2011

Key findings summary

• The study found a re-alignment of TV market investment using the same 2010 TV budget could increase annual TV generated sales by 38%.

• And improve ROI by 43%• The model recommends 40% share of

total TV budget should be allocated to regional markets to achieve this outcome

• TV flighting patterns in regional to be continuous lower weights

Current Adstock investment in regional areas could be increased to maximise total advertising generated sales.

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Predicted sales driven by weekly TV Adstock levels

Sydney Melb Bris NNSW SNSW RQLD RVIC TAS

Weekly Adstock

Sa

les $

= Average Weekly Adstocks

Current Adstock investment in regional areas could be increased to maximise total advertising generated sales.

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Predicted sales driven by weekly TV Adstock levels

Sydney Melb Bris NNSW SNSW RQLD RVIC TAS

Weekly Adstock

Sa

les $

= Average Weekly Adstocks

Over the period of the study regional areas deliver 38% of advertising generate sales for only 16% of budget and hence better ROI compared to metro areas.

Melbourne and Sydney have a greater capacity to generate high volume sales but require large levels of spend

Region Spend Sales Generated ROI

Overall 4.9 mill 100% 100

Sydney 1.96 mill 26% 71

Melbourne 1.2 mill 21% 86

Brisbane 891K 15% 86

NNSW 197K 7% 186

SNSW 190K 11% 286

RQLD 200K 11% 271

RVIC 142K 6% 214

Tasmania 74K 2% 143

RegionCurrent Adstock

Possible Mix% of weekly

budget

Sydney 42K 20K 18.59%

Melbourne 28K 24.6K 22.86%

Brisbane 19.5K 19K 17.66%

NNSW 4.8K 10K 9.29%

SNSW 3.9K 10K 9.29%

RQLD 4.9K 13K 12.08%

RVIC 3.2K 7K 6.51%

Tasmania 1.3K 4K 3.72%

Total 108K 108K

Optimum allocation to Regional TV is 41% of total TV budget

Due to higher decay in regional areas, a continuous flighting pattern may be more appropriate. Whereas in Sydney where advertising decay is lower, a large burst followed by shorter ones is most efficient.

Region

2010 Spend

2010 Rev.

2010 ROI

Poss.Spend

Approx

Rev.ROI

Sydney

762K 36K 0.047c 331K 16K 0.048c

Region

2010 Spend

2010 Rev.

2010 ROI

Poss.Spend

Approx

Rev.ROI

NNSW 71K 9.6K 0.14c 165K 22.8K 0.14c

Region2010 Spend

2010Rev.

2010ROI

Poss.Spend

ApproxRev. ROI

SNSW 70K 14.6K 0.21c 166K 33K 0.2c

Region2010 Spend

2010 Rev.

2010 ROI

Poss.Spend

ApproxRev. ROI

TAS 25K 2.8K 0.11c 66K 7K 0.11

Inve

stm

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Week Number

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stm

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Week Number

Inve

stm

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Sales

Week Number

40%of potential national growth is in regional

markets…

40%of potential national growth is in regional

markets…

…for no more than 25% of national TV budget

Regional TV offers your clients growth, accountability and engagement

• Discretionary spending outlook very positive

• Regional media consumption favours FTA TV

• Opportunities for localised messaging in support of national brand strategy

• RTM can provide effectiveness measures and opportunity analysis

Regional Quiz

Thank you