Opinion

Q&A with Tourism Australia regional GM Michael Newcombe: Marketing is a challenge when you can’t actually sell the product

MikeIt’s a little over a year since Michael Newcombe was tasked with increasing visitation to Australia from Southeast Asia. In this Q&A with Mumbrella, the regional GM talks of the marketing strategy, the challenges the agency faces and how it wants to get closer to the consumer.

Tourism Australia’s food and wine campaign, Restaurant Australia, has been the major marketing focus over the past 18 months. But what’s the next big push?

The number one thing we have in the pipeline is Australia’s coastal and aquatic offering. That is the key focus for the next 12 months in terms of creative.

How we interpret that is the key thing. Coastal and aquatic can mean different things to different people so in this region lying on the beach or being in the ocean may not translate.

We are working with our trade partners to find out how we best to interpret that but we are thinking for this market it’s maybe focusing on the coastal precincts, so what is happening around the beach areas rather than slapping on sun cream and going for a surf.

What’s the thinking behind the coastal focus?

We did research which showed that by comparison Australia’s beach and coastal offering were significantly lower compared to other parts of the world. On a global scale we are not perceived as being in the top one, two of three. We tend to be down the list.

If you go on Trip Advisor and look at the rankings for the best beaches in the world I think there is one Australian beach. So the intent, like we did with food and wine, is to elevate people’s thinking of Australia in terms of its coastal offerings.

It’s how we translate that to be a bookable product.

Being a government agency you are unable to sell product directly so you are heavily reliant on the travel trade to actively book Australia. What challenges does that bring?

One of the things we are heavily focused on is trying to have a direct relationship with the consumer, which is a challenge when you don’t actually sell the product.

We want to have direct conversations in an indirect manner if that makes sense. We want to leverage off someone else’s brand that gives us instantaneous credibility.

In Singapore we worked with UOB bank where we were targeting high net worth individuals, top tier people and presenting them quality offerings. UOB has a travel division so there is an immediate ability to connect.

You end up with tripartite deals or four party deals so we’ll bring the airline, financial institution, ourselves and a trade partner together.

They become big and complex partnerships but we have become good at streamlining the whole process.

We are a partnerships organisation, that’s our job. Our job is to find those partners who are equally passionate about the destination, equally want to have a go and turn that into a seamless relationship. That’s why we spend so much time traveling round the region.

Turning to individual markets within your remit, India has often been identified by Tourism Australia as one of its big hopes. How is the market looking?

We’ve seen really good numbers out of India. In the last 12 months it’s gone from our 11th largest market in terms of arrivals to eight with double digit growth.

We’re sitting at around 220,000 and we are progressively chipping away and punching towards 300,000 which is our 2020 target.

Spend is growing faster than arrivals. We have seen a 35 per cent increase in spend so it has become a really strong market in terms of expenditure. The average visitor from India spends $4,500-$4,700 and it’s a long stay market with 59 days on average.

How are you marketing Australia in India?

I’ve been with Tourism Australia just on 12 months and when I joined we were heavily brand orientated and doing generic brand adverts.

That’s not a bad thing because when you are investing in, and looking to build a market, establishing your brand is really important.

But brand awareness and recall were already really high. We were sitting in the high 90s in terms of intent and aspiration to travel so the brand building had done its job. So over the past 12 months we have shifted our focus more towards a tactical environment so we have joined with trade partners to present more price point activations and a call to action.

That is getting much greater traction with the trade because rather than pure brand adverts where the trade is somewhere down the page, we are giving them a little more of a prominent position. We are able to do that because the market has matured.

In terms of campaigns, Restaurant Australia went very well. Masterchef Australia is hugely popular in India. Contestants and judges are like celebrities so we were able to dovetail Restaurant Australia into that quite nicely.

But India is a massive country with a huge population, how are reaching audiences?

We look at it from a geographic focus first and foremost. We have national coverage from an ad point of view so if we are buying dailies or TV spots we will get national coverage.

But the top eight cities in India reflect over 80 per cent of our total opportunity so at the moment we really only focus on three cities – Mumbai, Delhi and, in the last six months, Bangalore. Once we have established ourselves in Bangalore and we are happy with the results then we may look for the next market, maybe somewhere like Chennai.

We had a bit of a halo effect from the Cricket World Cup as we ran really heavy campaigns during that period.

We also did a broadcast with the local TV channel where we hosted the most popular TV drama where they film a wedding and honeymoon sequence. That opened the door to get into Bangalore and when that was up in lights we started to engage the trade heavily.

We do a fair chunk of TV advertising. Yes it’s expensive but it gives you immediacy to the consumer and cut through because everyone watches TV. With newspapers what you tend to find is a regional diversity so people will read their local rag as opposed to reading the nationals.

You need to splice it up.

What about digital marketing? That must be a key focus.

Like everyone else, we are progressively growing our digital spend throughout the region.

But internet penetration is variable and at the moment in India we are not seeing as much success in our digital campaigns as we see through our traditional mechanisms. That will change over time.

The guys here are under explicit instructions across all markets to increase our digital.

Eventually the market will mature. You want people having high propensity to travel, high credit card penetration, confidence about Internet security, but we are well away from having that type of environment. It’s inevitable but we are a fair way away from that.

Joint marketing with partners is a key strategic aim of many tourism organisations as it helps a generally small budget stretch further. Where does Tourism Australia stand on this?

We have a budget for this region of around $13m, but we can effectively double that through partnerships.

Our other real focus over the next 12 months is distribution, and getting the right partners in the right markets.

Tourism Australia logoThere has been a degree of comfortability around how the trade has worked with us in the past, so when we ran our World Cup campaign we shifted the game a little.

We worked with a newcomer on the block called Yattra which is the second largest online travel agent in India. They were quite aggressive in terms of how much partnership contribution they made and that set a new benchmark for us in India.

The challenge for the team in India now is to see if we can start eliciting more commitment out of other partners and deepen and widen those partnerships.

We have made it into more of a bidding process, and asked partners to be a little more aggressive in how they want to work with us. Over the last 12 months we have seen partner contributions increase by over 300 per cent.

But surely it’s your interest to work with as many people as possible?

You can’t work with everyone, it’s just too fragmented. You end up diluting your ability to get substantial noise. If you work with everyone you do rats and mice campaigns with a number of partners as opposed to big aggregated campaigns where you end up with a lot of noise for an extended period of time.

Singapore is Tourism Australia’s fifth largest market and appears to be holding steady. How is it performing?

Singapore is a barometer of the global economy and there’s a little bit off trepidation around at the moment. The Government recently cuts its growth expectations so there’s a little bit of nervousness.

When we talk to the trade it’s a little down, but there is some really positive news in the global economic mire which is the collapse of the Australian dollar. We have seen it drop 30 per cent over the last 6 months so from a Singaporean perspective Australia has become an extremely affordable destinations for Singaporeans to explore. We expect it to have a reasonably positive year.

The influx of low cost airlines has encouraged the short stay market but that has led to a dilution of not just yield but length of stay. That has been a key challenge but it is still getting people through the turnstiles.

What is the marketing mix in Singapore?

Singapore is a very small marketplace so it’s not hard to get blanket coverage. We still work closely with the trade but what we have done is reduce the number of people that we work with to get that concentration effect. We don’t do much TV here, it’s mostly newspapers or digital.

And how are Malaysia and Indonesia holding up?

We’ve had really strong growth out of Malaysia, double digit for an extended period of time and that’s been on the back of the AirAsia and their ability to stimulate the market.

But there are some headwinds in Malaysia. Over the last 6 months we’ve seen a 40 per cent reduction in airline capacity, and that’s a big issue. The Government has looked at economic reforms and introduced GST for the first time so price has gone up. They have also looked at fuel surcharges and subsidies and removing those so the amount of disposable income is suddenly impacted. The Ringgit has also collapsed although the good news is that against other currencies, Australia has fared better than others.

I think those days of double digit growth are behind us. If we can maintain the numbers we would have done a great job,

As for Indonesia, it has wonderful potential. There are 250m people, it’s a G20 nation and still has reasonable GDP growth and again its close proximity to Australia.

We invested quite heavily last year in building a brand.

In the past Australia’s states and territories have been notorious for working is isolation which has led to a fragmented and disjointed marketing approach. Tourism Australia has called for a ‘One Voice’ strategy. How is that working in Southeast Asia?

Most of the states and territories are based in the Tourism Australia offices in Singapore and within our region it’s pretty amicable. We consult regularly and have discussions with each of them.

The key challenge is execution more than anything else because we all work on different timelines and that is where the friction can come in. Decision making processes are different, some are quicker than others, budgets are set at different times.

At Tourism Australia we are egalitarian and we’ll open it up for anyone to get involved in our campaigns. We aim to spread the love.

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