Nov 23, 2012

Advertisers blast APN over brandsExclusive plugs

The Sunshine Coast Daily is in hot water again -- this time from its own local advertisers, frustrated that their advertising dollars are getting spent.

Andrew Crook — Former <em>Crikey</em> Senior Journalist

Andrew Crook

Former Crikey Senior Journalist

Sunshine Coast small businesses spending millions each year advertising in the Sunshine Coast Daily are up in arms over the paper's decision to repeatedly plug its owner's online shopping business in its pages. In June, SCD owner APN News & Media took an 82% controlling stake in shopping portal brandsExclusive for $36 million. Since then, the struggling regional paper, recently bagged out on Media Watch for making a hash of a front-page story, has been regularly running full-page brandsExclusive ads without disclosure. Regular SCD advertisers from Caloundra to Noosa say brandsExclusive is a direct competitor and that their ad cash has effectively been used to compete against them and potentially shut them down. The company, which boasts 1.8 million members, sells "offers" across nearly every retail category but does not have a bricks and mortar presence on the coast or anywhere else.

A popular email doing the rounds in local small business circles penned by Darren Carter, managing director of Caloundra sign and printing firm Computercut, spells out the level of digust:
"They are taking hard earned money from local retailers for advertising (in a media they themselves no longer believe in) and the revenue from this is used towards a business that is trying to take their profits and market share, in effect to put them out of business. Because they don't need shop space, and because of the size of the business, they offer up to 70% 0ff and free delivery. They use their papers to run massive double page ad campaigns that they know none of their local competitors can ever afford, and parade themselves as self confessed 'champions for local businesses'. Oh … the profits go to the majority shareholder in Ireland and don't stay local. "Would you advertise with a company that is using your funds to try to put you out of business? You probably wouldn't. That’s why they are deliberately hiding this from our community."
Carter's sentiment is backed by numerous other Sunshine Coast small business operators. In July, APN was criticised for paying over the odds on the brandsExclusive deal, completed at seven to eight times EBIT. The site, which was predicting revenue of $70 million this year, is fuelled by cash from shoppers who delight in clicking around for bargains from leading fashion and manufacturing houses. Meanwhile, advertisers -- both internal and external -- could be reconsidering their commitment to print if the latest circulation data is any indication. The leading Saturday edition of the SCD has suffered massive double-digit declines in recent years, with the last Audit Bureau of Circulations figures putting it at 25,149, down from 28,023 at the same time last year. In 2008, its circulation was 37,004. APN shares were at hovering at 28 cents as Crikey hit the button today, down 95% from a 2007 peak of $6. They have halved over the last year. Crikey contacted an APN spokesperson for comment on this story, but they did not respond before deadline.

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