The problem with the term 'regional' - How hackneyed stereotypes and digital fixation is giving advertisers tunnel vision + stifling brands

a4b795fcc0009d5c0da7f325a2ae457d.jpgBy Grant Blackley (left), CEO of Southern Cross Austereo

I wonder if for many advertising professionals, particularly those in major city centres, the term "regional Australia" conjures up mental images of farmers and real life Daisy Dukes, working the land, sheep dogs afoot and flannelette aplenty. With these abstractions, you could forgive advertisers for believing it utter foolhardiness to target the regional audience. This would certainly explain a mere 9% spend in regional by national advertisers.

There is just one problem: almost nine million Australians live outside capital cities, representing 36% of the total population - and they're certainly not all wearing wide brim hats and mustering cattle.
Contrary to widely held belief, most regional Australians are residing in large towns or cities, all of which are uniquely different. Towns such as Whyalla, Port Hedland and Dalby have little in common with large regional cities such as Canberra, Gold Coast, Hobart, Newcastle and Townsville, yet they are grouped together under one, all-encompassing term: regional.

I know that most national advertisers have access to sales data at a regional level, so it begs the questions: What is deterring national advertisers and agencies from spending in proportion to the regional population, and are hackneyed stereotypes seriously to blame?

Australia's major regional cities are prospering and tipped for continued growth in the years to come. The Gold Coast is estimated to grow by 9.4 percent in the next 5 years, while Canberra and Wollongong will swell by 6.6 percent and 4.7 percent respectively.

Recent studies show the cost of living in Australia's city centres is increasing faster than anywhere else in the world, encouraging people to purchase homes in regional locations, particularly those within relative proximity to city centres. The federal government has recently committed $222 million in its Regional Jobs and Investment Packages (RJIP) designed to drive economic growth in regional areas, galvanising a positive outlook for regional Australia.

Australian Bureau of Statistics (ABS) data tells us that people in regional Australia have a lower cost of living than their metropolitan counterparts and have similar spending habits. So why are national advertisers all "fishing in the same pond" in metropolitan centres, when there are largely untapped markets right on the periphery?

It also begs the question: Why are advertisers prepared to pay a premium to reach the customer in a major city centre, when there is a potentially more profitable customer right on their doorstep?

Over the last few months I have met and discussed this phenomenon with several leading advertisers, who all without exception boast about the sales and margins they achieve in regional markets, yet in the same breath admit to not paying enough attention to these valuable markets. In one case, an advertiser admitted 50% of their gross annual sales were generated from regional markets, yet they had committed 100% of their advertising to the five capital cities to compete more aggressively with their peers.

Perhaps advertisers are favouring media which they personally consume, and therefore perceive as superior. I certainly hope this level of insularity would be scarce. Another explanation for the anomaly is that increased focus on digital and social media channels has redirected advertising dollars away from traditional media, though this logic is questionable. While indisputably an important touchpoint, digital and social should not be implemented to the detriment of proven and resilient brand building media such as radio and television.

Digital and social remain poorly regulated and their impact is still largely unverifiable. While commercial radio is strictly regulated, providing a brand-safe environment, and its effectiveness is monitored by independent auditors, digital platforms are largely unfettered and continue to use misleading metrics and veiled algorithms, assuming monopoly positions from which they can determine what users do and don't see. Moreover, the homogenous nature of social media removes the localism from advertising which all audiences, both regional and metro, are shown to favour.

Unquestionably, brand salience and campaign reach are among the most important attributes for growth, yet regional markets' ability to grow brands seems to have been largely forgotten. I think it's time advertisers and their agencies look at the stark facts, begin challenging their perceptions and overcome personal biases to determine how they can tap into highly prospective regional markets before their competitors figure it out first.

6 Comments

Spot on from Grant Blackley here. Perhaps the term ‘non-metro’ explains it better than ‘regional’. After all, these valuable consumers are more accurately living in a non-metropolitan location rather than perceptually a ‘regional’ one. Big difference between Gold Coast and Dubbo. Branding of where they live is critical to overcome the obvious prejudice.

Truth said:

People in the country have next to no money to spend. Cost of living is lower, wages much more so and with the drought disposable income is almost non-existent.

Also the CPA is much larger due to being spread over such a large area.

Anonymous said:

Truth,
I don't think people in Canberra, Newcastle, Gold Coast or Gosford have been adversely affected by drought to such an extent they would be disinterested in the products and services which national advertisers have to offer. It is this very thinking the article challenges.

Great Article said:

Fantastic article and thoughts. Thank you. As someone who grew up in a regional centre and moved to Sydney recently for work - it frustrates me to no end the myths, undervalue, “clumping”, and condescension of rural, semi-rural, and regional centres by 3rd - 4th generation Sydneysiders and Melbournites.

Regional Australia is almost seen as a novelty where poor bogans live and not as strong tight-knit communities with new wealth coming through in the way of resources, livestock, exports, and “tree-change” professionals. I know a lot of people in central Queensland making serious $ through the livestock export market. Cities like Gold Coast are seeing good growth. Toowoomba recently built a new airport for exports, and a multi-million dollar CBD retail revamp.

@Truth, have you spent more than a month outside a capital city in your life? Watching Landline once a week doesn’t make you an expert.

Truth said:

@Great Article

I grew up in the bush and find your stereotypes of rural Australia somewhat offensive. For every ‘central Queenslander making serious $ through the live export market’ (two?) there are hundreds of thousands seriously struggling. Larger regional centres like Gold Coast, Wollongong and Newcastle are generally covered by metro spend.

The country is seriously struggling. Jobs that were once regional are now overseas or crammed into outer Melbourne / Sydney.

Investment in regional areas is paltry.

Hundreds of thousands have moved to the city for better opportunities, compounding the housing crisis while retirees aren’t moving out of the city.

This is something I understand well, you sound like someone who’s never been to a country pub and chatted to the bartender, not the locals - because everyone else drinks at home and are too poor to go out.

Noticed a drought in your travels?

Idiot.

Truth said:

@Anonymous,

Drought affects the big centres just as much as the small ones.

With less money, there’s less employment on the farms - which are the lifeblood of a regional community.

That means less people go ‘into town’ to spend money. Money on entertainment, clothes, haircuts, toys, you-name-it.

Sure there might be people in the regional centres not struggling. But the majority are because the normal income derived from people within a ~100km radius of ‘town’ has suffered dramatically, and that has a knock-on effect.

Go out sometime in those cities and you’ll find they’re dead or dead compared to what they used to be. With everything moving offshore, the conglomerates killing dairy farmers, centralisation of manufacture and jobs... It’s not full of bogans and stereotypes - it’s dead.

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