Overall, what have been the growth/encouragement areas for you in your media company in 2024?

At New Zealand Media and Entertainment (NZME), we have a very clear strategy that has seen us focus on digital transformation and having a digital-first approach across the business. This has seen us have success in growing our digital business across Audio, Publishing, and our OneRoof property platform. We continue to expand our digital offerings across our platforms to meet changing audience preferences.

We are also focused on leveraging analytics and consumer insights to ensure our audiences are receiving the content they want in the format they want to receive it. This is allowing us to personalize content and experiences, thus improving overall engagement and revenue.

In audio and publishing, we are expanding on our digital content including podcasting, digital audio streaming, and investing in more video content—particularly on our main news website, nzherald.co.nz (NZH).

We are also embracing technology, including AI-driven tools where possible, to help streamline operations, be more efficient in the way we work, and improve advertising effectiveness.

Are you able to share what percentage of your revenue comes from advertising, subs, and other revenue?

For the first six months of 2024, NZME advertising was 72%, subs 24%, and other revenue was 4% of revenue.

Is AI having a major impact on your business? In what ways?

We see AI as both a huge opportunity for efficiencies across our business, but of course, it also comes with its own risks. The adoption of AI is accelerating across NZME as an enabler of productivity and creativity.

We have an AI Hub that meets monthly to collaborate on ideas and learnings, with approximately 20 members across the business. NZME has incorporated AI into the way we work, and we have made it available for everyone to use.

Our Marketing team is leading the way with visual campaigns powered by AI, as well as using a number of the tools available within the creative industry. All creative is still overseen by a designer, but these tools allow for further efficiencies.

The newsroom is leveraging AI to augment key workflows. For example, our BusinessDesk team uses AI to generate daily articles based on market announcements—clearly marked as being produced by AI. We are also rolling out AI editing tools to help streamline journalists’ workflows.

We are building personalization tools with the use of AI for NZ Herald’s online audience and developing an AI voice to allow all content on NZH to be delivered as text-to-speech. This will become a high-value sponsored feature. As always, trust and quality in our journalism remain the highest priority, and AI is used with appropriate human oversight.

In terms of other impacts, AI platforms are using our content freely in providing the services and information to their users. We are engaging with the New Zealand Government on this currently, on legislation that would require the likes of the big tech platforms to pay for the content of ours they use.

Those conversations are progressing, but we do believe they should pay for using content that is generated by our own journalists, and that NZME pays to produce.

How is your relationship with the big tech platforms?

Like most media companies, we simply want a fair playing field. These global companies are currently making money off content that is developed by our talented journalists, and we expect to be paid for that content.

We have very limited engagement with Meta after we signed a one-year agreement with them for the use of our content, but they have chosen not to re-engage with us since that agreement lapsed last year. We also signed a longer-term commercial agreement with Google that undervalues the content, however, there was no legislative backstop at the time to help with negotiations.

With the government now looking to introduce legislation that would require the tech companies to enter into commercial arrangements with media companies, we expect we may see further engagement in the year ahead.

Are subscriptions the panacea for future reader involvement/monetization? In what way does advertising support your subscription drive?

Subscriptions are an important component of a widescale approach to ensure the sustainability of trusted, quality journalism.

They’re important because they allow us to have a direct relationship with our most engaged readers, allowing us to offer premium content and experiences. Advertising, of course, continues to play a vital role in our business model and supports our subscription drive.

Advertising allows us to maintain a model where some content remains freely accessible, with the NZH paywall currently sitting across 20% to 30% of our content on any given day. This free content helps us reach a broader audience and it’s often through this content that readers discover the value of our journalism and decide to subscribe.

Our ability to offer advertisers access to our subscriber base—a highly engaged and often premium demographic—enhances the opportunities for agencies and advertisers. This supports our overall business objectives, allowing us to invest more in quality content that attracts and retains subscribers.

Subscriber data insights also help us offer more targeted and effective advertising solutions

In essence, at NZME, we see subscriptions and advertising as complementary rather than mutually exclusive. Our strategy involves balancing these revenue streams, along with other initiatives, to create a robust and adaptable business model that can continue to support quality journalism and meet the evolving needs of our audience in the digital age.

Brand building. What are the key elements of building a strong brand in today’s market? How do you maintain brand relevance in a rapidly changing environment?

The most important elements of building a strong brand in today’s market are customer-centricity and consistency. Relentless consistency. In the dogfight for attention in a world of reducing attention spans, brands can drive awareness and engagement (and ultimately results) by delivering relevant and targeted initiatives.

Look ahead, be adaptable, innovate, embrace technology, and have a clear focus on consumer behavior shifts—but be consistent.

We reach 9 out of 10 New Zealanders every month across our Audio, Publishing, and OneRoof brands. This allows NZME to provide compelling, integrated solutions to all advertisers in New Zealand.

What differences do you see in media consumption across various areas/regions you operate in? How do you tailor your strategies to different markets?

As just noted, at NZME we reach 9 in every 10 New Zealanders, and that’s because we know our audiences and we tailor our products. Whether it’s our nationwide nzherald.co.nz website, the NZ Herald newspaper, our regional and community papers, our online premium verticals such as Viva Premium or the Listener, our niche BusinessDesk online platform, or OneRoof property platform, we are tailoring what we do to reach the biggest audience possible, providing something for everyone.

We also diversify our offering across our network of radio stations, with several of our stations offering local shows across regional New Zealand. In terms of content, as well as having our stations available via terrestrial radio, we also offer digital radio streaming through our digital audio platform, iHeartRadio, and we have the biggest podcast network in the country, with a diverse library of local and international content to ensure we offer something for everyone.

What is your overall view of the state of the advertising market? How are you adapting to any decline?

We have been experiencing difficult trading conditions and reduced confidence levels within the business community, which has led to the advertising market reducing year on year. However, with business confidence now on the up and quite significantly in the last Business Confidence Surveys, businesses are signaling their intention to spend as sentiment improves. NZME remains well-positioned to take advantage of this growth.

Sales teams: Do you see a future where new structures, new approaches, and new skill sets are required? More consultative selling? A.I.-led? How do we build long-term relationships with agencies and advertisers?

This is a timely question as we have recently announced some changes to our sales team, in which we’ve developed a new sales division with a team now dedicated to servicing independent agencies and nationwide direct clients who need extra consultative support and services.

Relationships with agencies and advertisers are hugely important. We pride ourselves on building and maintaining those relationships, and our teams do a great job engaging regularly with clients in person, keeping them updated on things that are going on within our business, and presenting new opportunities.

We’ve executed some excellent campaigns recently for clients, including for ANZ and Daffodil Day in August, which saw us support the fundraising activity across multiple platforms – print, digital, and radio – showcasing NZME’s diverse network and strength in providing multiple layers of brand awareness across multiple platforms. This diversity of platform, delivering significant reach across New Zealand, allows NZME to provide integrated campaigns, not just spots and dots.

Does print fit into your advertising portfolio? How do you sell print advertising? In isolation or part of an overall portfolio proposal? How do you get print on the radar of (mainly young) media planners and buyers?

Print advertising remains hugely important for us, with digital advertising revenues only recently surpassing print advertising in our Publishing business. There is significant strength being shown from retailers and financial institution advertisers who have proven the power of print advertising within their business models. We are using these as case studies with a wider range of advertisers.

An integrated sales team completes all advertising sales, rather than having individual standalone print, digital, and audio sales teams. We’ve proven the power of an integrated approach allows NZME to win a disproportionate market share of revenues.

Events: What do you do in this space? Exclusive events for subscribers perhaps? How do you create them? A specialized/dedicated team to run them?

We have a dedicated Events team who run numerous local events, mainly in the regions, such as home and lifestyle shows. These are a way to engage with local businesses as event stallholders, while bringing our own brands to regional New Zealand.

In terms of subscriber events, we have held a number of newsroom tour sessions that we have used as premium experiences for paying digital subscribers. We have also held several online live “meet the editor” events with open Q&A for subscribers to ask questions of our editorial team. These have been very successful for engagement with our audience.

Audio: Are Podcasts in your wheelhouse? Successful? Resource heavy? How do you monetize?

Growing podcast engagement and monetization is a key focus in our strategy across both our audio and publishing businesses. We’ve been successful in doing so, growing podcast revenue by 68% in the first half of this year compared with the same period in 2023.

The Audio business allows us to generate significant podcast inventory from content already within our talk and music radio shows while also utilizing the on-air talent to generate bespoke podcast titles and experiences. This, therefore, comes at a little incremental cost and is being monetized through sponsorship and advertising. We have a number of titles we believe will allow for subscription monetization in the future.

The publishing podcast business is growing rapidly with the use of existing editorial resources. As noted earlier, we expect further acceleration of this with the introduction of text-to-speech across our site and further use of video.

With increased digital consumption comes increased data, and increasing our utilization of this data allows us to generate content recommendations and personalized advertising for listeners, ensuring they are more engaged and served content that appeals to them the most. The data available across all our digital platforms at NZME means we can offer advertisers better opportunities to connect with the right audiences based on their listening behaviors.

Other revenue diversification: Anything particularly successful? Branded content? E-commerce?

We have seen strong growth in our real estate listings platform, OneRoof. It is now profitable and likely to be a significant contributor to shareholder value growth over the next few years. While now digitally focused, print remains a significant part of the offering.

So, print will have a future?

Print advertising will remain important, particularly in local markets, as well as offering opportunities for visual creativity and “talkability.” The focus will be on creating experiences across all platforms and devices – print, audio, websites, PCs, mobile, etc.

What about future advertising trends? What are you seeing? Is video advertising the future? Social platforms? Diversification into the likes of TV and radio as some have done?

Advertising is already a dynamic, multi-faceted landscape. There is a real shift toward more engaging, personalized content across various platforms, including video, digital audio, and social media, which continues to play a big part.

Like NZME, many media companies are diversifying their offerings, branching into TV, radio, and other channels to broaden their reach.

Where does AI fit into that landscape?

AI is becoming integral to the advertising ecosystem, driving personalization, optimization, and potentially revolutionizing creative processes, which NZME is already utilizing where possible.

Ultimately, successful advertising will need to balance innovation with respect for consumer preferences, creating engagement across an increasingly diverse and technologically advanced media landscape. NZME’s diversified portfolio of assets is a key contributor to our success.

Future of Media overall: How do you envision the media landscape evolving over the next decade? What role will traditional media play in this future?

The media landscape over the next decade will continue to undergo significant transformation, driven by new tech and changing consumer habits. Digital platforms will likely dominate, with streaming services, social media, and mobile-first content front and centre. This is why digital transformation is so important at NZME and is such a focus of ours. AI will continue to grow and improve and will play a significant role in content creation, distribution, and personalization.

The role of traditional media as we know it (print, broadcast TV, and radio) in this future landscape will likely be as trusted curators and producers of high-quality, in-depth content. Established brands and journalistic expertise will be valuable assets in a world of information overload.

Collaborations between traditional and new media entities will no doubt be more common, combining the strengths of established journalism with the reach and technological capabilities of digital platforms.

Challenges and Opportunities: What are the biggest challenges facing media companies today? Where do you see the most significant opportunities for growth?

There are significant challenges for the sector, but the opportunities lie in being agile and quick to adapt, embracing new technologies, remaining customer-focused, continuing to provide trusted and quality content, and maintaining credibility in an era of information overload and misinformation.

Media companies like NZME can leverage data analytics and AI to deliver personalized experiences, explore new revenue models like subscriptions and e-commerce integration, and expand into emerging formats.

The key to our success will lie in balancing trusted, quality journalism with new tech and innovation, focusing on niche markets and creating unique, valuable content for which audiences are willing to pay. NZME has led the charge in New Zealand with our digital transformation programme, and I’m confident we will continue to innovate and find new ways to engage audiences and provide quality opportunities for advertisers.

As we look toward/into 2025, can you offer any comfort or words of wisdom to those media companies who have seen ad revenue losses this year?

It’s tough out there, and I think the players that are innovating and have the ability and flexibility to adapt quickly are the ones that will be ahead of the market. I think there will also be more opportunities for collaboration across the industry, using our collective strengths to deliver innovative, world-leading experiences for our audiences.

New Zealand was one of the first countries to enter economic difficulty over the past couple of years, and I believe we will be one of the first to recover. Thankfully, that recovery looks to be on its way in the economic metrics we are seeing.

More about Mark Challinor: Mark is a commercial and media advertising strategist. He recently led the International News Media Association’s (INMA.org) Advertising Initiative (the news industry’s deeper dive into media advertising). He has also been European and global president of INMA. He produces a monthly Future of Media Advertising newsletter on Linkedin, as well as running an advertising committee made up of senior executives from across the world’s media. Mark is now CEO of News Media UK Consulting. Follow Mark on X: @challinor and LinkedIn.

Last week, we had time with Folha de S.Paulo’s Marcelo Benez. You can catch up on the News Horizons hub.