DraftFCB | 2010 Agency of the Year

Doubling Down on Doublethink

// June 17th, 2010 // No Comments » // Uncategorized

Realpolitik makes for strange bedfellows. Sometimes it feels like the Orwellian fog of alliances as described in “Nineteen Eighty-Four”, where doublethink (“the power of holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them”) prevails and history is constantly being rewritten.

Today’s example (until subsequently denied and revised):

Telecom and Sky have announced a new commercial agreement that will enable Telecom to sell all of Sky’s television services to its customers alongside their home line, mobile and broadband products.

“With television services becoming more widely accessible through faster broadband speeds, continuing our partnership with premium content providers like SKY makes sense,” according to the CEO of Telecom Retail.

There is, it seems, no conflict with an earlier announcement from Telecom confirming a partnership with TiVo:

Telecom and Hybrid Television Services, the exclusive licensee of TiVo products in Australia and New Zealand, have announced a partnership that will see TiVo delivering unmetered entertainment to NZ living rooms.

“TiVo represents a revolution in the way Kiwis watch television, this new entertainment service allows the freedom to watch what you want, when you want and enjoy top rated movies on the television without impacting your monthly broadband data allowance.”

So does the deal with Sky spell the end for TiVo in New Zealand? In our view, no – just a recognition that TiVo hasn’t proven as successful as Telecom might have hoped. It makes fiscally prudent sense to diversify, spreading exposure across multiple platforms. That’s presumably why TVNZ, despite its championing of the TiVo offering (and of Freeview), has opted to partner with Sky on channels such as Heartland and Kidzone24.

Similar compatible incompatibilities are evident throughout both television and telco sectors. Both Telecom and Television New Zealand once owned significant shareholdings in Sky; and then they didn’t. TelstraClear carries Sky content throughout its cable network but is lobbying for television rights regulation to be considered in an ultrafast broadband world.

Amidst the confusion, one thing seems clear: the combined impact of technological innovation and convergence means that circumstances are constantly changing. Clinging blindly to historical arrangements can be strategically fatal.

Time to revisit that old saw: “Keep your frenemies close and your frenemies closer”.

New Zealand by the numbers

// June 17th, 2010 // No Comments » // Uncategorized

6.65%: Facebook’s share of all website visits by Kiwis for the week ending 11 June, according to Hitwise

3.17%: Trade Me’s share of all website visits by Kiwis for the same period in the first quarter of 2012

NZ$1.2 billion: at least one analyst’s estimate of the total value of Trade Me if the company is sold off

US$100 billion: analyst prediction of the total value of Facebook if it goes public in the first quarter of 2012

5.26 million: total NZ mobile connections in 2010, according to technology researchers IDC

124: number of friends that the average NZ user has on Facebook, according to a recent UMR survey

4%: percentage of Kiwis who donate blood each year

8%: percentage of Kiwis who think they have donated blood in the past year, according to an NZ Blood Service survey

90%: percentage of Kiwis who ate at a fast food restaurant in the first quarter of 2011

15.6 million: total kg. of potatoes used by McDonalds NZ in 2010

Kidults

// June 17th, 2010 // No Comments » // Uncategorized

“The most effective kind of education is that a child should play amongst lovely things.”

Well, that was Plato’s view. During his lifetime (428BC-348BC), of course, the Internet wasn’t one of those lovely things. Today’s millennials, however, are deeply immersed in the online space — far more so than many of us have yet realised. The AVG Digital Playground Study (May 2011) provides some surprising insights into the precocious digital habits of today’s tweens:  

Approximately half of the 6-9 year old children surveyed are regularly talking to their friends online and using social networks. Yet 58 per cent of their parents admit they are not well-informed about their children’s online social networks.

The Digital Playground, the third stage of AVG’s year-long Digital Diaries research program, further delves into the increasingly digitally-literate group of 6-to-9-year olds and their parents in Australia, New Zealand, the northern hemisphere and Japan to find that:

• New Zealand children average 3.7 hours online each week, which is more than the worldwide average of 3.5 hours per week. Australian children average 3.9
• A staggering 67 per cent of New Zealand 6-to-9-year-olds use some kind of kids’ social network such as Club Penguin, Moshi Monsters or WebKinz.
• Australian children are the highest users of email at 28 per cent, against the one in five global average use.
• 36 per cent of New Zealand 6 to 9-year-olds talk to their friends on the Internet. On balance, parents of children that do talk to friends via the Internet feel that this has a positive impact on their social skills.
• Despite being under age, 12 per cent of New Zealand 6 to 9-year-olds are on Facebook, according to their parents. While this figure does not mean they have profiles, they are still using the functionality.

Feeling old yet?

Easing The Transition

// June 17th, 2010 // No Comments » // Uncategorized

More than three-quarters of New Zealand homes can now receive digital television, according to a recent Colmar Brunton survey for Going Digital (the organisation charged with transitioning our television viewing from analogue to bits and bytes).

That result is encouraging — but it still leaves more than 378,000 homes at risk of losing their access to television completely as analogue transmitters are shut down progressively over the next couple of years (the Goodnight Kiwi turns the old-style lights out for good in November 2013). Will we see a return to the earliest days of television, when whole families would head to a local coffee lounge to watch weekly episodes of their favourite show? Perhaps not — but the challenge of digitising televisual luddites will definitely tax the next government as regions begin the great switchover from September next year.

A bigger challenge however faces regional television broadcasters, for whom the switch to digital offers little (at least in the short term) but increased costs and reduced coverage. Fortunately, some relief is on the way, at least in terms of the financial impact of digital: an $850,000 assistance package to help regional television broadcasters make the transition from analogue to digital broadcasting has just been announced by Broadcasting Minister Jonathan Coleman. NZ On Air will administer the package which provides up to $70,000 per regional broadcaster for equipment and other costs.

The coverage dilemma is not so easily solved. Most regional television stations will be switching to Digital Terrestrial Transmission (DTT), joining other free-to-air broadcasters transmitting over the air within their local region. However consumers have two different options when it comes to receiving digital television signals: DTT or DBS (Direct Broadcasting via Satellite). All Sky channels are broadcast via DBS — so Sky subscribers (comprising approximately two-thirds of current digital viewers) will not normally be exposed to DTT. To watch regional channels, consumers will need to buy a Freeview DTT set-top box or own a late model TV (and ensure their UHF aerial is connected accordingly).

Regional broadcasters have been through this before. When the airwaves were first opened up in the early 1990s, the three major networks broadcast on the VHF band and hardly any household had the UHF aerial required to receive the new regional operators. That changed over time (driven, it must be admitted, by the fact that Sky Television used the UHF band for its early pay television offerings). This time round, regional broadcasters will be assisted by the fact that all new television sets can receive DTT signals; however they will need to encourage consumers to have those new sets configured appropriately.

Ah, the joys of change.

Social Shopping Heats Up

// June 17th, 2010 // No Comments » // Uncategorized

Size does matter, in the social shopping space – and the 800-pound gorilla just arrived in the virtual mall. Earlier this month Facebook launched Check-In Deals into the New Zealand marketplace in Beta mode, initially featuring deals from McDonald’s and Hyundai.

As with any direct response marketing, the success or otherwise of social shopping depends most on two critical factors: the offer and the list. As we’ve already seen from our existing providers (and we include in that operators such as GrabOne, 1-Day, Treat Me and even GrabASeat), many offers have certainly been compelling ($1 pizzas spring to mind).

As for the list, that’s either been built up over time, deal by deal; cleverly engineered by encouraging word of mouth for the hottest deals; or has been drawn from the existing list of the parent organisation (as with Trade Me’s promotion of Treat Me to its membership base).

Now here comes Facebook, with a list of more than 1.9 million Kiwi members, accompanied by serious mechanisms built around word of mouth; ‘tis a combination to be feared (or certainly respected) by other social shopping promoters.

Facebook Deals will be promoted to members through up to eight different methods, including social sharing: if consumers “like” or “buy” a Facebook Deal, that information (accompanied by Deal details) will be shared with their friends unless they opt out. It’s a whole lot more intrusive than simply sending out a daily email to your database, with the obvious potential both for significant viralising of your Deal and for a privacy backlash. Results emerging from offshore suggest that, if your offer is compelling enough, friends are happy to learn about it through their Facebook newsfeeds; if the offer is not that good, nobody will want to know about it anyway.

The current New Zealand Beta test is limited in its usage and appeal. According to news reports, McDonald’s customers who check-in to any NZ McDonald’s restaurant using Facebook Places can view the latest deal on offer (the initial offering was for free fries or a sundae); while Hyundai is offering a charity deal, with $10 donated to the Spirit of Adventure every time someone checks in at a dealership.

However the implications are clear: Facebook Deals are on their way. If you’re currently considering offering this type of deeply-discounted deal as a marketing strategy, you need to factor Facebook into your thinking along with any other options under review.