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Sunday
Aug042019

Masters of Spin - Milk Wars, Defense Spending

In this week's Masters of Spin, we discuss the Governments ban on social media influencers to sell some of its programs along with the latest in the supermarket Milk Wars.
You can watch the segment here, transcript below

Basil Zempilas: Welcome back to the program. Defense Force officials have been ordered to stop paying social media influencers after it was found the department forked out more than $55,000 over the past two years.

Monique Wright: So a report in Melbourne's Herald Sun also revealed several so-called influencers on the department's payroll were also seen promoting alcohol companies. Let's bring in our Masters of Spin now. Matthew Bywater is in Sydney and Adam Ferrier in Melbourne for us. Morning to you both.

Basil Zempilas: Hi guys.

Monique Wright: Matt, we'll start with you. Now the health department has also paid influencers we understand, spending over $200,000, but isn't this just moving with the times?

Matthew Bywater: Yeah, correct. There seems to be a lot of scrutiny over it, I'm not sure why. Because it's just an advertising medium and the questions are this. Is one, is it the right medium to attack the demographic they're after? And yes, it is. Second, and most importantly, are we getting value for money? We're not talking about the value, we're like what sort of traction is it getting? What sort of cut through? Is the message actually getting received and acted upon by the target demographic? And they're the real questions to ask.

Basil Zempilas: And Adam, I don't think there's any doubt is there, that influencers are able to target a very specific audience and it goes to a very engaged audience. And I think that's why so many people do recommend it as a form of advertising.

Adam Ferrier: Yeah, that's right. Like if you want to appeal to say gardeners for example, get the leading gardener to spread your message and get them on board and other people will follow. The other thing that annoys me slightly about this is, we've been using influencers since marketing began and we've been paying influencers, whether it be, you know, x, y or z across history. And so there's nothing particularly new about it. It's just gaining in popularity. So I'm not sure where the issues are coming from for the federal government.

Monique Wright: Yes. I wonder whether the outrage is coming from people that don't understand you know, how social media works, or the outrage is just about spending money on advertising at all.

Adam Ferrier: Well, it's certainly not the latter one, because 200,000 versus 20 million for a particular campaign, it's not about the amount of money. I thought Matthew said it's quite interesting, about looking at the effectiveness of the spend, what value it's creating and maybe putting forward different arguments in that way.

Basil Zempilas: Yeah, and I think that there is an impression too that everybody can get on there and become an influencer, but it's-

Monique Wright: Very hard.

Basil Zempilas: It's actually not that easy. And to be a good one, you do need to sort of cultivate your audience, work with them, all of those things. So anyway, it makes sense to us.

So this week Woolie's announced it's adding 10 cents per liter to its milk, promising to pass on every single cent to struggling farmers. The Coles boss has defended his company's decision not to follow and instead pledge loyalty to customers by not adding to their cost of living.

Now, Matthew, the agriculture minister, he was scathing in his comments about this, calling for a boycott on the supermarket giant. Who's likely to be the winner here?

Matthew Bywater: It's definitely Woolworths, who got first mover advantage. And Both Coles and Aldi, they've stumbled over this, they've sort of said, oh, we're going to do something, we're doing other things. They're doing other things for sure. And there is other programs got in place, but they're not tangible, like walking into a store, picking up a bottle of milk and saying 10 cents for every liter goes to a farmer. So Woolworths, huge advantage.

Monique Wright: Yeah, come on Coles, come on Aldi, seriously. You know, Woolworths is really leading the way here. Adam, what would you advise Coles to do now?

Adam Ferrier: I wouldn't necessarily react to this specific issue, but what Woolworths has in their favor is their whole brand proposition is around fresh. And Coles's whole brand proposition is around cheap. And so they've done the right thing by their brand by keeping the prices down. But just being cheap is almost a promise to nowhere for the business. It's hard to extract value out of just being cheap.

Aldi, on the other hand, is cheap but different and odd and quirky, so they can keep on being odd and quirky and keep their brand alive. So I would advise Coles to find out what else they can be about, rather than just being about cheap.

Basil Zempilas: In the end though, is it convenience or price that's going to get somebody into the store?

Adam Ferrier: Probably neither, it's probably the strength of the brands. People don't, there are, on very few categories do people always buy the cheapest thing available. People like to buy the the thing that they can afford, but it's not necessarily the cheapest things. So promising to be the absolute cheapest all the time, doesn't necessarily work.

Monique Wright: That's really interesting isn't it? And Coles is saying, well we've given lots of money to the farmers in relief, but what the farmers are saying is, we don't want the handouts. We actually just want you to pay a bit more, more what the milk is worth. And even at a $1.10/liter, it's worth a lot more than that.

Basil Zempilas: Woolies' first move, and winners at the moment. Guys, thank you, we appreciate your time.

Monique Wright: Yeah, good to talk to you both.

Adam Ferrier: See you next week.

Monique Wright: Thank you.

Basil Zempilas: Coming up, we're going to meet Australia's farmers of the year, and they're on a mission to produce the world's best tasting lamb chop. We'll speak to them soon.