What you need to know:

• Ad tier across Stan incoming as Nine aligns BVOD and SVOD teams and tech.
• Talks with Seven underway about sharing trading platform as Nine seeks to strip out both back-end costs and partner with rivals for market-facing initiatives.
• No timeline on a decision or which trading platform would be used – either Nine's Galaxy or Seven's $60m-plus imminently launching Phoenix.
• Nine seeking $100m in fresh opex cost cuts.
• Digital video at scale a strategic priority, deal-making with local rivals, platforms and marketplaces likely to counter big tech threat.
• Nine moving towards scale with de-siloing process and data across its divisions to track, target and personalise across the group. But “not systemised completely”, per Stanton.
• Audience growth across all channels, tentative ad recovery underway.
• MMM trial still in play.

Acting Nine CEO Matt Stanton has confirmed the company is preparing to launch ads across streaming service Stan and is also in talks with Seven to potentially collaborate on a joint TV trading back-end, using either broadcaster’s Galaxy or Phoenix platform.

Stanton signalled appetite for further partnerships with rival media companies and platforms in a bid to counter big tech’s tightening grip on the ad market. He also indicated a potential push into marketplaces as it prioritises a strategic focus on digital video.

Ahead of a Stan ads launch Nine has brought together its TV and streaming tech and teams under Amanda Laing. 

Meanwhile it's redoubling efforts to tie together disparate back-ends and data across its business units to better track, target and personalise ads and content based on the trails and contextual signals audiences are dropping into those silos.

The firm in 2023 hired Suzie Cardwell to drive that work – who spent years building out News Corp's first party data capability before switching sides.

Stanton said progress is now translating into gains – though resisted overselling it, as was the company’s mistake in 2020 when trumpeting a move to “people-based marketing” that proved too early and technologically obsolete.

The firm has now reformulated the strategy and put it at the heart of what it calls the Nine 2028 plan – stripping out data and organisational silos as well cost, with $100m in fresh opex savings now targeted – to better compete with big tech and become “customer-led”.

Per Stanton, that centres on personalisation – “right content, right place, right time” and moving customers around its properties while “making sure it’s seamless and all working together”. Putting the customer first, “leads to better advertising results as well [and] making sure we can commercialise that", he said.

“In the past, we've been a bit siloed … but making sure we cross-link, work across and drive the consumers across our platform so that we can monetise them a bit better across advertising and subscriptions – or even into marketplaces.”

Examples of pushing audiences through its channels using its customer data platform (CDP) was targeting people who read about horse racing in its masthead and driving them into the Melbourne Cup on TV. Advertisers could do the same kind of thing, Stanton told Mi3.

Another example cited in its earnings call was using the CDP and audience platform to find 316,000 people interested in tennis based on masthead articles they were reading, but who had not yet watched tennis on 9Now. Targeting them with promos for the Australian Open resulted in 57,000 logging on to 9Now for the first time, a 13 per cent new Australian Open audience boost.

While Nine has previously talked a good cross-platform game, Stanton acknowledged fully harnessing its capabilities across the group has been “ad hoc” to date, and while ramping up, “I wouldn’t say we’ve scaled it completely. We’re probably still in phase two where we’re doing it a lot more, we’ve trained up some of our marketing teams and we’re getting more insights out there as well,” said Stanton.

“So it's not systemised completely at this point, but there's definitely good results from what we're doing, and opportunities,” he said, citing the federal election as a chance to prove it can pinpoint “hotspots from a demographic point of view and be a bit more targeted” for parties aiming to sway voters.

Government ad dollars are helping a fledgling ad recovery, said Stanton, with the Clive Palmer bump likewise in effect in the current quarter. “So that has helped. How that [election spend] goes in quarter four, we're interested to see how that works. At the moment, we feel it's a bit neutral”.

He said other categories increasing spending are insurance, automotive and retail.

MMM still on

Despite a raft of changes within the business’ senior leadership ranks, Stanton said there was no plans to mothball strategic initiatives flagged at its upfront, such as the market mix modelling partnership with Analytic Partners, Mutinex, Annelect, GroupM, IPG and Publicis Groupe in a bid to prove the $600m that has exited TV for the platforms in the last two years is a strategic error on the part of marketers and media buyers.

A bevy of advertisers – including Aussie, KIA, Qantas, McDonald’s, NRMA Insurance, Telstra, Westpac, Trip A Deal, Lion, Fiji Airways, Colgate, Hungry Jacks, Optus and Koala – signed up to the trial in which $30m in media is in play to run against their own MMMs and attribution models to see what those ads deliver in ROI and sales.

“Yes, the market mix modelling, we’re absolutely carrying on with that same strategy,” he said.

Stanton hopes it will bolster broadcaster's narrative that TVs ad dollar decline is overcooked – though he sees signs of recovery.

“Total TV audiences are in growth, there is no doubt about it.” The ad market has “been tough” for the last year “but we’re starting to see that come back and quarter three has been strong,” he said.

“It's proven now that audiences are very sticky on total TV and in growth … [invest] in premium, good quality content, people will come,” Stanton added.

“News and sport is really, really strong at the moment both from an audience and advertiser point of view, and that drives into entertainment where we are changing the nuances.

“So we're feeling quite good about our audiences, our content and context across the board. From our advertisers, we see a response at this point in time [and] over the longer term, we see that will continue.”

However, he suggested landing TV's audience growth message and regaining budgets lost to platforms are not yet in step.

"I definitely don't think [advertisers] have come [back] in enough yet and recognised this enough ... They should be piling into our platforms."

Digital video dealmaking

Stanton rejected arguments that publishers are fighting for the rump left by big tech, with a handful of platforms taking 60 per cent of global digital ad dollars.

“We’re looking at the 100 per cent [market opportunity] … But one of the most important aspects is scale. Hence some of the conversations we're having with some of the local players as well. At scale, we go to market with the trusted brands around news and sport especially, that can really drive good outcomes for us.

“We don’t just talk about how we are doing in the BVOD market. That is completely irrelevant to us. What we talk about is how we're doing in the digital video market – and that is a huge, huge opportunity.”

But he said BVOD was a standout example to show local media has immediate scale that the biggest social platforms cannot match.

“MAFS is seen by a million people watching it over an hour and a half on BVOD. None of the big tech firms can hit those sort of numbers in an hour and a half on one night in this marketplace. That is still very, very strong,” said Stanton.

“As our data capability [increases] and our business more and more digital – which it is – that power is exceptional. We have top of funnel with free-to-air. We have mid-funnel with BVOD, we have transactional [via partnerships for lower funnel]. So the capability for us and Australian media players is really strong to be able to fight for those dollars – the 100 per cent, not the 40 per cent.”

Stan ads

Plus it will have ads on Stan.

Along with Disney+, Nine has held out on launching a streaming ad tier. But Stanton indicated launching sports ads on the platform would be followed by a broader ad play, potentially opening up access to 2.3m subscribers, depending on whether Nine chooses to launch softly, like Netflix did before u-turning to emulate Foxtel and Amazon’s approach, where subscribers get ads unless they pay more.

“[Ads on] Stan Sports for now, entertainment in the future,” said Stanton, though he gave himself wriggle room on timing. "Watch this space."

“Obviously we are looking at the entertainment side, looking at the other [streaming] players to see what they have done."

“Sometimes it is not as easy as people make out. We have to build the tech for it, so it’s not just something we can switch on. That is one of the reasons for putting 9Now and Stan’s tech together, because one is good at subscriptions, the other is good at ads. So we need to get that capability.”

Asked for the strategic rationale in delaying ads when others are pulling ahead, Stanton said it was “a numbers game … but I think the consumer has got used to ads on SVOD now, as long as you do it in the right way”.

Ad buyers have previously backed Stan to make a success of ads, because it has “sophisticated, at scale, sales infrastructure, which means they could make really good money”, versus some of its global platform rivals, provided that advantage is not ceded by giving platforms the time to scale sales operations.

Stanton also signalled intent for further expansion and partnerships within the broader digital video market as a strategic priority.

“How do we grow into the digital video market more and more? That would mean doing more ourselves [or] partnering with other platforms or even other TV businesses. We would definitely contemplate that to get more scale in this market and then go to market in a bigger way.”

Phoenix or Galaxy?

Stanton said “a lot of conversations” are taking place with Seven to both de-duplicate back-end costs – but also on market facing initiatives.

“There's a definite intent on both sides to come together in a more collaborative way than probably has historically happened.” He cited the NPC broadcast content delivery joint venture as a template for back-end cost efficiency – “there’s no reason why we can’t use that vehicle to do other opportunities between us”. But he reiterated there are bigger fish to fry.

“We definitely see scale as an advantage against some of the US big tech firms. We feel between us that we can be better together in certain things. That doesn't mean that we won't compete [as we have] previously, but where there can be opportunities to come together, we will do so.

“Definitely I can say back-end cost-out. But I can also say yes, forward [facing] market [initiatives]. If there are opportunities to come together and scale, we will and should explore that.”

Does that potentially include combining with Seven on either Phoenix or Galaxy? Seven CEO Jeff Howard demurred when asked that question directly, having sunk $60m into the build of Phoenix, which unites linear TV, regional TV and digital assets in a multi-screen trading platform. “I'd probably prefer not to talk about that one at this point,” Howard told Mi3. “But certainly, we're open to having conversations with anybody about anything.”

Stanton was more forthcoming. “Yes,” he said, when asked if it was in the frame of consideration. Is there a timeline to decide on which platform might be jointly used? “No.”

Key numbers

• First half earnings across the group fell 15 per cent to $264m despite revenue improving marginally to $1,390m.
• BVOD revenue gains on 9Now (up $26.4m to $120.2m) outweighed declines in the traditional broadcast TV business (down $15.6m to $492.7m) but earnings on those numbers fell 35 per cent to $103.8m due to higher costs.
• Stan increased revenues 17 per cent to $245.5m and earnings 16 per cent to $29.4m.
• Publishing revenue was down $20.5m to $268.2m though profitability suffered less, back 4 per cent to $74.3m.
• Audio revenues up $1.1m to $53.6m with earnings climbing $1.9m to $5.7m.
• Domain revenues grew 5 per cent to $217.2m with earnings up 15 per cent to $77.8m.
• Asked about Domain’s potential sale to CoStar, Stanton rebuffed questions, but said it was “of strategic importance”, suggesting a bigger offer than $2.7bn may be required to test that view.