Southern Cross Austereo CEO and managing director Grant Blackley has spoken out against reports that a recent investor presentation contained misleading graphs.
The graphs in question, as first reported by the Australian Financial Review and subsequently covered by B&T, were displayed as part of SCA’s half-yearly investor presentation for the financial year 2019.
In the reports, it was implied that the numbers were skewed unfairly in favour of SCA, as they combined the numbers of its FM cumulative reach with its DAB+ figures (digital radio), while not showing the latter figures for its competitors.
Grant Blackley spoke with B&T on why the reports were incorrect, and explained the rationale behind the graphs.
“The information that was provided in our investor presentation is accurate information,” Blackley said.
“The information for DAB audiences is collected by the official provider, GFK.
“It is in a world gold standard, and completely audited numbers, and by way of reference, data for DAB stations are collected on the same date by the same person on the same page as FM and AM, so the data, in its own right, is correct.
“Secondly, the difference between ourselves and other parties is that we actually own roughly around 50 per cent of the commercial DAB spectrum.
“We have not sublicensed that spectrum to a third party as, say HT&E have done, (or) to a third party international operator, being iHeartRadio.
“And of course, NOVA didn’t acquire any spectrum from the government, when the government optioned the DAB spectrum, so what we see here is an inherent commercial advantage, because of the strategy that SCA employed some years ago, which was to invest in this spectrum at the public option.
“So the moment we had that spectrum, we retain it as part of our commercial strategy.
“We have organised our brand such that the stations that we have linked up effectively underneath the Hit and Triple M brands, and we have four stations under the Hit network, and we have four stations under Triple M.
“They’re all within a very brand safe environment, and they’re all a derivative of the principal brand of either Hit or Triple M.
“In relation to ARN, for instance, they’ve effectively sublicensed that to iHeart, and the brands that are represented in the DAB sector for ARN have no direct relationship to their principal brand of KIIS or Gold, etc.
“So therein lies the point of difference.
“The final point is to say that when an advertiser buys or invests a spot with SCA, in actual fact, they are buying a spot on the Hit network, the principal network, and then they also receive incremental audience which is unique and unduplicated on the DAB channels, and they receive a spot on each of those four stations simultaneously, effectively within the same time band, as exactly they have bought that on the FM station.
“To put it another way, when you buy 100 units on NOVA, you will receive 100 units on NOVA.
“When you buy 100 units on KIIS, you receive 100 units on KIIS.
“When you buy 100 units on Hit network, you will, in fact, receive 108.4 units on the Hit network, and that is because the incremental reach that we provide to each and every buy is commercially linked and extended through our DAB strategy.
“Therefore, the graph that we are reporting in our investor presentation shows the view that effectively any advertiser has been seeing since March 2018.
“Ever since we, as an industry, agreed — the CRA, the GFK agreed — that we release DAB data, which is unduplicated audience, in actual fact, we employed this strategy. So this strategy is a year old.
“Over the last year, every one of our advertisers has benefitted from extended reach every time they’ve bought a spot on either our Hit or Triple M networks in our metro markets.
“What the graph clearly states is that the audience that NOVA has is the audience we’ve published.
“The audience that ARN has, we have published.
“And the audience that Hit has, with the benefit of the extended DAB commercial impact, is exactly represented on that graph as well.
“So this is common practice.
“This is an expected practice.
“It is a gold standard research approach, and effectively what we have done at SCA is organised our assets differently to others, and the fact that ARN has elected to effectively sublicense their spectrum to a third international party called iHeart, is their difference, and that was their choice, and that was their strategy.
“However, every single media buyer that buys a spot on ARN does not get any incremental benefit across any of that spectrum.
“So the insinuation and the misinformation being put to a number of journalists in the marketplace, that this information is misleading, is grossly incorrect and in actual fact, a complete fabrication of the data.
“We have done this for twelve months.
“It is industry practice, and we are actively embracing the DAB platform moving forward, and in actual fact, the listening on the DAB platform will only increase in the future, and that will only benefit those advertisers that choose to invest in SCA, and our two brands and two brand families under Hit and Triple M.
Blackley went on to address the accusation that the dimensions of the graph were inaccurate, with SCA’s DAB figures (which number in the 100,000s) increased in size to roughly a third of its competitors’ FM numbers (totalling in the millions).
“When you look at the proportion, note the report doesn’t go from 0 to 100, because you physically wouldn’t be able to read the numbers, you wouldn’t be able to read the data,” Blackley explained.
“Clearly, all of the information on the graph is correct.
“What you’re suggesting is that the graphical design of that, such that our investors can easily read it, is the issue, is that correct?
“I wouldn’t see that necessarily as, linking in with your headline, which actually says that this is misleading data.
“Because I think I could find a case in point from every annual general report from multiple companies where in actual fact they are highlighting any source of information accurately, but nevertheless, it doesn’t necessarily have a scale of 0 to 100.
“I think we’re splitting hairs, the key issue here is that the information is correct.
“The data that we have provided is correct, and is audited by the third and official party, being GFK, and that the commercial strategy is both unique and accurate in the manner of which we’ve portrayed it.
“There’s no use talking more to the scale of the graph, as I say, it is common practice, and I’m sure I could find the same in our peers’ presentations over time.
“It is not misleading, it is not deceptive, what it is trying to do is highlight the position that this is the audience, and it clearly states in that graph there are 4.7 million listeners, and that we have an incremental benefit through our DAB of 373,000 listeners that is unique, unduplicated listening for that DAB platform.
“So all of those numbers for ourselves, and for our peers that we have published, is absolutely correct”.
Blackley concluded that the misinformation was being spread by what he referred to as a “rogue, anonymous party”, though expressed surprise that the party in question was targetting a practice that SCA had been employing for over twelve months.