“Certainly in the last 12 to 18 months the Sensis platform has deteriorated …Directories are declining at the same rates we have seen in Europe, which no one here really expected.”
CONTINUING pressure on margins has forced Telstra to merge its online advertising sales business, Sensis Digital Media, with BigPond Advertising and Telstra Classifieds — a move analysts say has been a long time coming.
Sensis Digital Media (SDM) will join forces with the BigPond & Telstra Classifieds in the Media Application and User Experience Group (MAX) from July 1.
However, executives have rejected suggestions the merging of the business units is part of a rationalisation.
Michael Padden, head of Telstra Media Classifieds, who will oversee the merger, said it was a question of bringing like-minded business units together.
“We are aligning the teams from across Sensis and Telstra that are responsible for creating the digital advertising content with those responsible for selling it,” Mr Padden said.
“It makes perfect sense and the new business is going to provide even more innovative and effective ways for advertisers to reach their audience.”
The merged businesses will have access to more than 9.3 million consumers online and 10.5 million mobile customers each month.
Mr Padden said BigPond was continuing to develop as a media company, having last month won the digital rights to the AFL.
“It is a relatively recent view, but now is the right time to bring the two divisions together,” Mr Padden said.
He said it was not yet clear if the SDM name would be kept as part of the merger and also denied that there would be job losses, although there would be “operational” advantages to the move.
The newly merged division will be in charge of sales and innovation across online, mobile and the fast-growing area of IPTV.
Analysts said that the move made a lot of sense but was also a sign of the shrinking value of the directories element of the Sensis business.
“Certainly in the last 12 to 18 months the Sensis platform has deteriorated,” one analyst covering the telco industry said. “Directories are declining at the same rates we have seen in Europe, which no one here really expected.”
He said that the integration of SDM, BigPond and Telstra Classifieds made sense in light of the growth BigPond was seeing as an advertising platform.
Simon Canning – June 15, 2011 12:00AM
theaustralian.com.au/business/telstra-sees-sense-in-sensis-ad-merger/story-e6frg8zx-1226075260609
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