Peter Switzer Program
Sky News Business Channel
Tuesday 7 July 2009
Peter Switzer: Time now to chat to a Young Gun, born into a world of advertising and now an entrepreneur in his own right. And I want to find out what the future of media and advertising looks like for him. Welcome Jack Singleton to Switzer.
Jack Singleton: Thank you Peter. Very good to be here. I’ve seen your head a lot over the past… is it a week yet?
PS: It’s a bit over a week now mate. The promos are everywhere and I can’t even get away from me. Look, tell us your ad agency’s story as well.
JS: Yep. Look I’d worked with the old man for a few years. Worked overseas
PS: The old man of course is John Singleton, in case people haven’t recognized that.
JS: That is correct. I came back and started my own agency in 1998.
PS: Called?
JS: Called Jack Watts. I deliberately avoided the name Singleton. Primarily because we didn’t want couriers getting confused. We were fortunate, well not fortunate… we worked very hard to secure our first client which was Yahoo.
PS: Was it because you were young and you were groovy and all that sort of stuff? Or looked that way anyway?
JS: It was because we actually told the truth. Yahoo, you know 1998, the dot com thing is taking off and Yahoo put their advertising business out to pitch. We were put on a short list with four other agencies. They were all multi-nationals. Our agency was me – Jack – Colin Watts – Watts, the two of us and a receptionist. Every other big agency said they knew everything about the internet, they had a digital department, they were experts… and we said we young guys we’ve had a look at the internet, looks okay to us, we don’t know anything about it, we know a lot about advertising and we’re willing to learn and work with Yahoo to get more people going to Yahoo. Apparently every other agency said they were an expert and the Managing Director and the Marketing Director, they said “Jack, Colin, we’re not experts about the internet, it’s 1998, no one is an expert, we don’t know where it’s gonna be in 2008 let alone 2018.
PS: So do you still run, or are you still a part of that agency?
JS: Yeah I’m still a partner, Director, shareholder
PS: Have you become old and crusty? And there are young agencies coming up and winning business from you because they’re more in touch with the new age?
JS: We don’t lose much business. Our attitude has always been – work out what is best for the client. You know, the agency doesn’t enter awards, something we took a leaf out of the old man’s book. You know an agency entering advertising awards is kind of like a race horse trainer entering your race horse into a horse show. I don’t care how the horse looks, I want the horse to run really fast. The client doesn’t really care if the ad is funny, if our peers like the ad, the client cares about the ad working or not working.
PS: And customers coming through the door as a consequence.
JS: Correct.
PS: Okay. So what else takes up your time nowadays? You’ve got the advertising agency and what else do you do?
JS: Yep. I started another business 5 years ago called Phone Names, which is the alpha-numeric dialing concept. Which was a concept we had seen tried and tested on a test market of 300 million Americans for 20 odd years. We brought that to Australia and have now got a lot of large clients: Dominos; Westpac; Pizza Hut; Bendigo Bank…
PS: But I’m sure people watching didn’t understand what you’re talking about. We’re talking about 1300 numbers basically.
JS: Yeah 1300 DOMINOS; 1300 WESTPAC; you want Bendigo – 1300 BENDIGO; if you want flowers you dial 1300 FLOWERS.
PS: So how easy was it to actually kick this business off?
JS: Not easy. I came back from the United States in early 98, started the agency and simultaneously looked at why would Pizza Hut’s number not be 1300 PIZZA HUT, why wasn’t Bendigo Bank’s number 1300 BENDIGO, and there was government legislation that we needed to lobby to have changed, to release the numbers to make this 1300 DOMINOS concept possible.
PS: But wasn’t there also like a technologically confusing range of keypads?
JS: There were, some telephones had the wrong keypads on them and government legislation now also dictates that the letters have to be on the right keys, which makes the whole thing possible.
PS: So the Yanks were generic, everyone had the same sort of keypad, but here we were all over the shop effectively.
JS: Yeah well I mean if you’re looking up until the late 90s we didn’t send text messages, there was no alpha-numeric dialing, we didn’t use the letters on the keypads. Australia did actually become a dumping ground at one stage for phones with letters on the wrong keys – no one noticed; it didn’t make any difference to us.
PS: Because we didn’t use the letters. But how easy was it to get government to change for, in a sense, a private entrepreneurial endeavour?
JS: Not easy. It took a lot of time. I mean we had government departments, the Australian Communications Authority, now ACMA – the Australian Communications and Media Authority and we went to them and said ‘how do we go about having these number ranges released” and they said “well you’ll need to lobby us, you’ll need to go to a lot of meetings, fill in a lot of forms, do the paperwork.” It took a lot of time and took a lot of money.
PS: It must have been eye opening for someone like you who has operated in private enterprise and you’ve seen your old man open doors or kick doors down to make something happen, but public servants are a different kettle of fish aren’t they?
JS: They understood the concept and it was just a matter of working at their pace, you can’t rush people to get things done quicker than they want.
PS: You should be in politics Jack with an answer of that caliber. What about the penetration of phone names? I always figured when you first came on the scene the difficulty of explaining to baby boomers that somehow you could use letters to spell out numbers of phone numbers.
JS: Yeah look, Roy Morgan, we commissioned them in 2006, cause you’d go to a Harvey Norman, you’d go to a Westpac, you’d go to a Dominos and they’d say “Yeah l we get it but do the mass, do the general public get it, do the over 40s / over 50s?” so you employ a company like Roy Morgan, you spend a lot of money with Roy Morgan and they come back with a report that says, I think in 2006 it was about 80% of the population were aware of how to dial alphanumerically. In 2008 it was 93%. In early 2010 we’ll do the research again.
PS: Maybe I’m dumber than the rest of the population. I always thought you were gonna have a much bigger challenge. So what sort of penetration have you got with 1300?
JS: Look of the Top 50 advertisers in Australia, more than half of them are now using phone names. Australia is fortunate in that a 1300 number can also accept sms messages, which is something it took another 2 years for us to get the regulators to agree to. We worked with an sms partner there. So it means companies that might not even want phone calls, a phone call might be an expensive way of handling a customer, I guess younger people these days – we know how often they communicate with each other via sms, now Australian companies can have their consumers communicate with them via sms to a 1300 DOMINOS or a 1300 GO HARVEY, 1300 WESTPAC.
PS: Ok. Now let’s talk about the future of advertising and the media. What do you think is going on at the moment that may well be a struggle for a lot of the media outlets, that a lot of the people watching this program could be investing in?
JS: Yep look I guess the struggle for the media companies or the incumbents, the TV, print, radio (I guess maybe to a lesser extent) but especially TV and print, they had a government regulated number of licenses, if you wanted to put an ad on TV you pretty much paid what that media salesperson told you to pay – they set the price. Pay TV, Subscription TV…
PS: It was a seller’s market…
JS: It was a seller’s market. It’s now a buyer’s market. You look at the classifieds that Fairfax were so dominant in. Cars, where do you advertise a car now? Carsales.com.au. A job… well it’s got to be on Seek and realestate.com.au is getting the lion share of real estate classified ads .
PS: So have the media outlets been slow in understanding where the market is going?
JS: I think the incumbents have been a little hesitant to - not saying they buried their heads in the sand – but if you’ve got hundreds of millions of dollars in revenue that’s based in print, I think a lot of them wished that this online thing wouldn’t quite catch on. It did. I mean why is Fairfax not the dominant player in online cars, jobs and real estate? I mean jobs, Seek, it’s an internet pure play. The guys at Seek, they didn’t have print revenues to protect. They went out there and said “Does it make sense for people to look for jobs and for people to advertise jobs online?” and their pricing to start with was very low. They were probably giving away advertising space. Now they’ve created a marketplace. If you’re looking for a job or advertising a job and you don’t use Seek you’re not in the market.
PS: And so does it mean that advertising agencies are now dictating to the big media outlets what they’re going to take and what they’re going to pay?
JS: Yeah well I think that a lot of power goes now to the client. Advertising is becoming increasingly easier to DIY. I think Google has changed the way people remunerate their media partners and their agencies forever. Why would you pay to insert an ad and pay for insertion - a thousand bucks, here’s the ad - when you can run an ad online and pay based on how many people see the ad? That’s ok, but even better to pay based on how many people click on the ad or a cost per acquisition deal. And when there are deals out there, I mean Google’s advertising revenues have grown from zero 10 years ago, it’s not reported, but I think their estimated revenues in Australia are 800 or 900 million dollars per annum, just in Australia.
PS: And we’re seeing in the mainstream, television in particular, they’re imbedding advertising inside the programming. Is this the way of the future? Like the Gardening programs… is this the future?
JS: Yeah well look, that can be effective. The market will always go to whatever is the most effective form of advertising, and as I said before, the client doesn’t want a beauty parade. The client doesn’t want the funniest ad - some clients might – but 99% of clients want the ad that’s gonna work best and the ability to measure that response is something that every marketer is now savvy of due to the likes of Google. All of a sudden they’re wanting the same from their TV advertising, their radio advertising, their print advertising, they’re measuring every dollar they spend.
PS: Final question Jack. What have you learned from the old man that you actually employ in business? You’ve learned a lot of things you didn’t want to, but what things have you learned?
JS: He’s been drumming into me since the early days, I’d say “Dad what is this advertising” and he’d say “Mate, advertising is about helping people sell products and services. That’s the only reason it exists.” And that is truer today than it’s ever been.
PS: So are the techniques that he used many years ago still operational? Or did you have to change to suit the new media?
JS: The basic premise has not changed at all. You find out, I mean, marketing is about finding out what people want and giving it to them and the advertising side is – find out what the client really wants to do and help them achieve it. And that was the same when advertising was first invented – when the first sandstone ad carved into a pillar back in Egyptian days – it hasn’t changed.
PS: Well mate, thanks for joining us on Switzer.
JS: Thanks Peter.
PS: And I look forward to your progress as an entrepreneur and as an advertiser. Cheers mate.
JS: Thank you very much. Thank you.