NZME notable absentee in All-of-Govt advertising panel   22 Jan 2015

NZME notable absentee in All-of-Govt advertising panel

By Paul McBeth

Jan. 22 (BusinessDesk) - NZME, the New Zealand unit of APN News & Media, is a notable absentee in the panel for advertising media in the latest all-of-government procurement deal.

The company, which publishes the New Zealand Herald newspaper and owns The Radio Network suite of stations, wasn't on the list of 14 organisations which have agreed to offer baseline discounts on advertising in media. The list includes rival Fairfax Media Group, which publishes the Dominion Post, Press and Sunday Star-Times papers, and TV and radio broadcaster MediaWorks, as well as independent publishers including the Ashburton Guardian, Beacon Print & Publishing Co, and the Christchurch Star, as well as The Radio Bureau , which places ads across all the country's radio stations. Otago Daily Times publisher Allied Press, the National Business Review and magazine publisher Bauer Media are also missing from the list.

The Ministry of Business, Innovation and Employment document said negotiations are continuing with a 15th panel member who will be added when those are wrapped up, but a spokeswoman declined to identify who the party was.

MBIE, which runs the all-of-government procurement programmes, said it expects government agencies will keep buying advertising space as they currently do, either directly or through third parties.

The ministry wasn't sure how much money the new contract would save, with the spokeswoman saying "it’s too early to quantify savings until we have received some reliable data from participating agencies and providers they’ve selected to work with." She couldn't immediately identify how much money is spent on advertising media by the government.

APN is looking to sell down its stake in NZME by carving it out as a standalone company and listing it on the NZX, which it hopes will generate some A$308.6 million in gross proceeds, based on the carrying value of the unit.

The traditional media industry is under pressure as businesses are yet to figure out how to make money from online news, while audiences and advertisers are increasingly difficult to capture. NZME is chasing revenue growth by boosting its digital and e-commerce offerings, and expanding its promotional events, such as iHeartRadio concerts.

The new advertising media contract will sit alongside the existing all-of-government advertising services contract and a new design services contract that came into effect last month.

Economic Development Minister Steven Joyce said the new contract will let more agencies benefit from discounted services, including district health boards and schools.

"Under the new contract, government agencies will be able to access competitive discounts on advertising placement across a range of media channels,” Joyce said in a statement. “The new contract opens up the opportunity for more government agencies to benefit from competitive discounts across potentially more vendors who have not previously had the opportunity to offer discounts to government agencies."

The government estimates its all-of-government procurement has achieved savings of $176.9 million, with forecast savings of $415..1 million across the lives of the contracts.

(BusinessDesk)

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