Origin Energy Regional Market Review November 2011

Origin Energy

Regional Market Review

November 2011

www.regionaltvmarketing.com.au

RTM is the marketing bureau for Regional free to air TV

Regional markets require a nuanced approach to fulfill maximum return to Origin

• Regional people have bigger homes and more kids – likely to be high consumers of energy and engaged with the category

• Regional consumers – like all Australians – are very aware of corporate social and environmental responsibility

• Community invovlement and support through the media has far greater meaning in Regional Oz than in the capital cities

Regional TV covers all areas outside capital

cities and reaches 36% of

populationQLD

NNSW

SNSW

TAS

VIC

REG. WA

DIARY

Regional TV coverage

includes large cities and fast

growing coastal suburbs

Newcastle & Central Coast

Gold Coast

Wollongong & Illawarra

Canberra

Diary markets: 19% of total regional population

Regional WA

Port Pirie/ Broken

Hill

Satellite

Griffith

Mildura

Darwin

Loxton/Mt Gambier

Populations of major regional TV markets are comparable with the metros

People

Source: ATR & OZTAM 2011, Nielsen Media Research 2010

NNSW 2,079

SNSW 1,410

Population Increase: 2001 vs. 2011

Source: ATR & OZTAM 2011

Australian population moving North and to the coast. Over 30% growth in 10 years in some regional areas

National average

QLD NSW VIC TAS METRO

Urbanisation and high population growth changing the profile of regional Australia

• Seachange: Baby boomers and young families

• Lower cost of living and lifestyle are main attractions

• Rural populations moving to regional hub towns

• Less than 4% of households depend on farming

Regional energy consumers are more

likely to live in a house and have bigger family

Source: Roy Morgan Research (12 months to June 2011)

3 %7live in Regional TV markets

Source: OzTam AGB Nielsen 2011

1,573,000

Australian teens age 13-17

3 %8live in Regional TV markets

Source: OzTam AGB Nielsen 2011

1,547,000 Australian GB’s with

children 5-12

3 %8Source: OzTam AGB Nielsen 2011

3,141,000

Australian 55+

live in Regional TV markets

Seachange…

… for baby boomers

…for families

“Typical” Seachanger

Ryan, 36. Wollongong NSW

Made the seachange from the “Shire” to the “Gong”. Owns a small business in building trade

Above average income & primary focus is kids and lifestyle.

Loves footy , cars and teaching kids surfing.

Savings are at an all time high in both regional and metro markets

Saving per discretionary $1000

Source: foreseechange 2005 – 2010: annual average, 2011: June 2011 survey

The need to pay debt continues to decline in regional but is growing in metro markets

Source: foreseechange 2005 – 2010: annual average, 2011: June 2011 survey

Loan Repayment per discretionary $1000

Regional consumers’ willingness to spend grew this year by 9% – against national trend

Source: foreseechange 2005 – 2010: annual average, 2011: June 2011 survey

Spending per discretionary $1000

Home price to income ratio is significantly lower in regional TV markets

House price vs. income multiple

Source: Residex median house *(includes apartment price) Jan – Jun 2011 & Roy Morgan Single Source 12 mths to March 2011

Average household incomes in regional TV markets are within 10% of national average

Source: Roy Morgan Single Source (12mths to Mar 2011 )

P25-54: Average household Income

Incomes in regional and rural Australia are growing well above the national average

Average household income growth since 2004 (P25-54)

Source: Roy Morgan Single Source (12mths to Mar 2011 – 2004 )

Regional consumers are more optimistic about their current financial outlook…

…and are more likely to spend on discretionary items over the coming year.

Attitudes to environment and corporate social responsibility – foreseechange Nov. 2011

• Australian are overwhelmingly favourable to the participation of companies in social and environmental good.

• The degree of support does not vary significantly between adults in Metro, Regional city, and rural areas

• There is a high degree of skepticism about what companies say they do for the good of the community and the environment.

• Corporate social responsibility should, therefore, be genuine, both in appearance and delivery.

Source: Roy Morgan Single Source (12mths to June 2011)

Regional attitudes towards the environment marginally more conservative – age is a bigger

differentiator

Companies should concentrate on making profits and forget about social & environmental issues

Source: foreseechange 2011

Companies should not donate to charities

Source: foreseechange 2011

Companies should not donate to political parties

Source: foreseechange 2011

So long as the quality is the same, would pay up to 5% more for a product made by a company that did good things for the community

Source: foreseechange 2011

So long as the quality is the same, would pay up to 5% more for a product made by a company that did good things for the environment

Source: foreseechange 2011

Most companies talk about being socially & environmentally responsible but don’t actually do much about it

Source: foreseechange 2011

•News & current affairs•Local TV ads•Promotions •Community sponsorships

Regional TV is part of the community… “We live here

too”

…means greater engagement

Creating a regional voice for a brand will improve preference, loyalty and cut through

• True local (Newcastle Permanent, Southern Phone Company)

• Product offer localised (TCW, Rural bank)

• Tone of voice or context localised (youi, Greater Building Society, LaTrobe Uni)

• Support for local community (CBA Kids Cricket, NAB AFL, Surf Life Saving etc etc)

Regional consumers will reward Origin’s overt support and communication

• Opportunity is for Origin to take a leadership role in regional communities on environmental energy issues

• Regional consumers will reward value and honesty in business

• Regional FTA TV has reach and credibility far beyond any local media