“The Australian market has dragged its feet on change,” says IPG Mediabrands’ Henry Tajer. On the surface it’s a somewhat damning statement on the market as he moves on from his remit as CEO and executive chairman of the Australian business to take on the role of global CEO, based in New York.
The industry carps on about fragmentation, he says, but the problem isn’t fragmentation. The problem is that the market is fractured. And there’s a difference. But that’s not to say it can’t be fixed.
“The market is fractured because we haven’t dealt with fragmentation early enough,” says Tajer. “The biggest issue the Australian market has had is that it has dragged its feet on change and I think that is something that a lot of the major media organisations are dealing with. Some privately, some a bit more openly, but we know because we have a very strong and intimate relationship with these organisations and we see their pain. We feel their pain in how they are dealing with huge macro shifts in consumer behaviour, and the issue that many of these organisations have got is they have waited and reacted very, very late to this.”
Scale is part of the problem. And the “astronomical” cost of creating content. Globalisation and consolidation have to occur if Australia wants to continue to compete in the big leagues. For some, like NewsCorp and Foxtel, that already have global structures and partnerships it looks easier, but Seven, Nine and Ten he says, “are in a more difficult position”.
“Globalisation and partnerships are inevitable. Consolidation in the marketplace is going to help, but I don’t think it’s the fix because the Australian market is always going to be the size of the Australian market.
“We have two government-owned broadcast divisions in ABC and SBS. We have a very dominant telco that has ownership in a key media organisation. We have two very dominant media organisations in Google and Facebook that are global in nature and are effectively able to ignore geographic issues and have – some would argue – been given some advantages from a tax perspective, and they are new breed organisations.
“There are challenges that are not going to go away. There’s a reason the saying: ‘If you can’t beat them, join them’ exists. Sometimes that is how you survive. We are in a very Darwinian era of the media sector in the Australian marketplace. Government intervention will go a certain way, but the government is not going to run these businesses.”
Talent and a skills gap is often cited as one of the things holding the market back. Still, organisations look to the UK and US to fill senior roles on both agency and client side, before looking at what is already here, but Tajer doesn’t agree. The skills are here – but it’s the application of that talent and leadership that’s lacking.
“The Australian marketplace as an intelligent market is up there in the top two or three markets in the world. The calibre of thinking and the calibre of executives that we have in the Australian marketplace are world-class … but we have a marketplace that has been reluctant to take that talent and apply its benefit.
“[We are] a leading media scene in the world, but we need to accept that we are part of the leading squad and we need to lead. Maybe we’re shy about it – or maybe we’re lacking the confidence that we should have,” he suggests.
Looking to his next phase, Tajer, who officially took on the global remit on 1 May, and will relocate to the US in September, says that his philosophy on leading in a global capacity is not all that far from his approach locally, but that he is evaluating where the network – locally and globally – has strengths, but also gaps to fill.
“Everything that I have learned and everything that I have been exposed to at a local level is my blueprint for all of our local markets – because our network is a constellation of local markets and that is where it starts and, really, where it finishes. How we weave the markets and stitch our network together and make it a network as opposed to a ‘not work’ is going to be what my focus is. I don’t think there is this silver bullet that we can apply to a global network to make it globally strong . It’s bottom up.”
So as Tajer moves into the global seat, Danny Bass, former GroupM CIO, will become IPG Mediabrand’s Australian CEO after a six-month gardening leave period. His appointment set the industry alight and is seen by many as IPG launching a grenade into GroupM.
“Mediabrands is the greediest when it comes to talent," says Tajer. "We want more than our fair share of it … We won’t point to who, but some of our competitors are making it easy for us to win the talent race.
“Maybe I shouldn’t say this … Some people may see it as us lobbing a grenade, but we may say that maybe it’s GroupM shooting itself in the foot.”
- This article first appeared in the May 29, 2015 edition of AdNews.
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