Investigation Report No. 2971File No. ACMA2013/264

Licensee Prime Radio (Cairns-AM) Pty Limited

Station 4EL (4CA)

Type of Service Commercial radio

Name of Program The John MacKenzie Morning Show

Date of Broadcast 19 February 2013

Relevant Legislation/Code

Section 7 of the Broadcasting Services (Commercial Radio Advertising) Standard 2012Sections 8 of the Broadcasting Services (Commercial Radio Current Affairs Disclosure) Standard 2012Clause 8(1)(b) of Schedule 2 to the Broadcasting Services Act 1992

Investigation conclusion

No breach of section 7 of the Broadcasting Services (Commercial Radio Advertising) Standard 2012 and as a consequence, no breach of the licence condition at clause 8(1)(b) of Schedule 2 to the Broadcasting Services Act 1992.

No breach of section 8 of the Broadcasting Services (Commercial Radio Current Affairs Disclosure) Standard 2012 and as a consequence, no breach of the licence condition at clause 8(1)(b) of Schedule 2 to the Broadcasting Services Act 1992.

ACMA Investigation Report – The John MacKenzie Morning Show broadcast on 4EL (4CA) on 19 February 2013

The complaintOn 19 February 2013, the Australian Communications and Media Authority (the ACMA) received a complaint about The John MacKenzie Morning Show of 19 February 2013 broadcast on 4EL (4CA) in Cairns.1

The complainant alleged:

fifteen minutes of broadcast time was spent interviewing two women touring in South Africa … One of them was said to be providing 'Julie’s African experiences'. At no time was the listener informed that this was actually 'cash for comment' with the interviewees actually paying for this time as a commercial.

The investigationThis investigation considers whether the segment broadcast by Prime Radio (Cairns-AM) Pty Limited, the licensee of 4EL:

Was an advertisement which was distinguishable from other program material as required by the Broadcasting Services (Commercial Radio Advertising) Standard 2012 (the Advertising Standard 2012)

Was material broadcast pursuant to a commercial agreement that required the licensee to broadcast an on-air disclosure announcement under the Broadcasting Services (Commercial Radio Current Affairs Disclosure) Standard 2012 (the Disclosure Standard 2012).

Under section 149 of the Broadcasting Services Act 1992 (the Act), the ACMA must investigate complaints about compliance with licence conditions. Compliance with the Advertising Standard 2012 and the Disclosure Standard 2012 is a licence condition on commercial radio broadcasting licensees under clause 8(1)(b) of Schedule 2 to the Act.

The program and relevant segmentThe John MacKenzie Morning Show is a talkback program broadcast weekdays on 4EL from 9.00 am to 12.00 pm. The program is described on the station's website in the following way:

Cairns locals have relied heavily on John Mackenzie to have their issues heard. Without Macca, they would have no-one to listen to them and put it out there for them … His dedication to get things done, and make politicians accountable is an everyday challenge.2

The segment relevant to the complaint was a fifteen minute conversation between the presenter and two guests, broadcast at approximately 10.30 am on 19 February 2013. Approximately one minute before the segment began, the presenter said:

We are going to get some travel bargains from Jenny from Travelscene American Express, one of our program sponsors in just a moment.

1 While 4EL is the Call Sign allocated to the service by the ACMA, the service uses the On-Air ID of 4CA AM for branding purposes and the service is therefore known to listeners at 4CA.

2 http://4ca.com.au/index.php/component/content/article?id=367:john-mackenzie,-weekdays-9am-12pm&catid=87&Itemid=444 – accessed 14 March 2013.

ACMA Investigation Report – The John MacKenzie Morning Show broadcast on 4EL (4CA) on 19 February 2013 2

The segment began after a series of spot advertisement with the presenter welcoming Jennifer who introduced the other guest Julie. Julie said 'We are the African specialists. So if you want to go to Africa, talk to us'. Throughout the segment the presenter asked the guests 'what do you have on offer?' with the guests providing information of available travel packages to Africa, including the attractions and activities of Cape Town. The guests also described the itinerary and inclusions of the 'Essentially South Africa' tour, as well as the price, and information on booking and payment. This tour was described by Jennifer as 'unbelievably cheap…fantastic value…', by Julie as ‘real value for money’ and the presenter also said 'I can’t believe the price…cheap as chips…deal of the day…nothing can compete with that'. The discussion about Africa was followed by a brief discussion of other destinations and travel packages. The presenter concluded the segment by asking 'Now, how do people find you?' Travelscene's address (including directions) and phone number were provided.

AssessmentThis investigation is based on the following assessed material:

An audio recording of the segment of The John MacKenzie Show of Tuesday 19 February 2013 Submissions and material provided by the licensee, dated 14 March 2013 Relevant publicly available information.

Issue 1: Compliance with section 7 of the Advertising Standard 2012

Relevant sections of the Advertising Standard 2012The operative provision of the Advertising Standard 2012 is section 7, which provides:

Advertisements broadcast by the licensee must be presented in such a manner that the reasonable listener is able to distinguish them, at the time of broadcast, from other program material.

Section 6 of the Advertising Standard 2012 provides the following relevant definitions:

advertisement means material broadcast:

(a) which draws public attention to, or promotes directly or indirectly, an organisation, product, service, belief or course of action; and

(b) for which consideration has been provided by, or on behalf of, an organisation or supplier of the product or service, to a licensee, a presenter, or an associate of a presenter.

consideration means any money, service, benefit or other valuable consideration that is directly or indirectly paid, promised, charged or accepted for material that is broadcast, or is to be broadcast, but does not include a product or service provided free to a person solely for the purpose of having the product or service reviewed.

ACMA Investigation Report – The John MacKenzie Morning Show broadcast on 4EL (4CA) on 19 February 2013 3

Complainant’s submissionsThe complainant submitted ‘this segment is repeatedly in violation of the Broadcasting Services (Commercial Radio Advertising) Standard 2012 … it is a live interview like most of the program, [and] there is no way to identify it as such.’

Licensee’s submissionsThe licensee provided a recording of the relevant segment of 19 February 2013.

The licensee submitted that Travelscene Smithfield – Adventure Tours and Holidays (Travelscene) had an advertising agreement with the licensee and provided consideration to the licensee for the relevant segment in accordance with the terms of the advertising agreement. Further, the segment is a weekly segment broadcast by the licensee each Tuesday, with an average duration of approximately 3 to 8 minutes. The licensee provided a copy of the advertising agreement to the ACMA.

The licensee submitted that while there was an advertising agreement with Travelscene, no other company provided consideration to the licensee for the segment, such as ‘Julie’s African Experiences’.

The licensee argued the segment was distinguishable as an advertisement because:

… the weekly content is consistent in style (being travel information, deals and packages provided by the travel agency, Travelscene), follows a standard format, and is placed in the schedule at the same time each week during the program.

The licensee also advised that the segment concluded with a reference to the location and contact details for Travelscene.

FindingThe licensee did not breach section 7 of the Advertising Standard 2012 in its broadcast of The John MacKenzie Morning Show of Tuesday 19 February 2013 because the segment was an advertisement that was distinguishable from other program content at the time of broadcast. Consequently, the licensee did not breach the licence condition at clause 8(1)(b) of Schedule 2 to the Act.

ReasonsUnder section 7 of the Advertising Standard 2012, commercial radio licensees must ensure that all advertisements are broadcast in such a manner that the reasonable listener can distinguish them, at the time of broadcast, from other program material.

In assessing the licensee's compliance with the Advertising Standard 2012, the ACMA must firstly determine whether the segment broadcast on The John MacKenzie Morning Show of Tuesday 19 February 2103 was an advertisement under the Advertising Standard 2012.

Was the segment an advertisement under the Advertising Standard 2012?For the segment to be an advertisement under the Advertising Standard 2012, the ACMA must determine that:

the segment drew public attention to or promoted a travel agency or its services; and consideration was provided by, or on behalf of, the travel agency to the licensee, presenter, or an

associate of the presenter for the broadcast of that material.

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Public attention or promotion

The segment included several mentions of the company's name which were positive, including provision of the company's contact details (location and telephone number). The segment provided sufficiently detailed information on the company’s services, such as prices for tours and inclusions of such tours. The segment provided such detail of the services offered by Travelscene that would further listener's interest in the company and encourage the use of its services. The segment also included the obvious call to action by the statement 'It is a super special, bookings and payments to be made by the 25 Feb'.

Further, a positive view of Travelscene was conveyed by the comments that the tour packages offered were 'unbelievably cheap', ‘real value for money’ and 'nothing can compete'.

The ACMA is of the view that the segment concerning Travelscene drew public attention to and promoted this company and motivated listeners to utilise its services.

Consideration provided for the material broadcast

The licensee confirmed that consideration was provided by Travelscene for the segment of Tuesday 19 February 2013. The licensee also provided the ACMA with a copy of the relevant advertising agreement.

Consideration was not provided by any other company, such as ‘Julie’s African Experiences’ for this segment. However it seems that the African tours associated with the guest 'Julie' and discussed in the segment were able to be booked through Travelscene.

On this basis, the ACMA considers that the segment was an advertisement for Travelscene under the definition in the Advertising Standard 2012.

2. Was the advertisement presented in a manner that the reasonable listener was able to distinguish it, at the time of broadcast, from other program material?‘Ordinary, reasonable’ listener test

In assessing content against the Advertising Standard 2012, the ACMA considers the meaning conveyed by the relevant broadcast material. This is assessed according to the understanding of an ‘ordinary, reasonable’ listener.

Australian Courts have considered an ‘ordinary, reasonable’ listener to be:

A person of fair average intelligence, who is neither perverse, nor morbid or suspicious of mind, nor avid for scandal. That person does not live in an ivory tower, but can and does read between the lines in the light of that person’s general knowledge and experience of worldly affairs.3

For the purposes of the Advertising Standard 2012, the attributes of the reasonable listener of a commercial radio station are considered the same as those described above by the courts.

How advertising material may be distinguishable to the reasonable listener

Whether an advertisement is distinguishable to a reasonable listener from other program material, is assessed according to a range of factors including content, style, tone, scripting and the placement of the advertisement.4

3 Amalgamated Television Services Pty Limited v Marsden (1998) 43 NSWLR 158 at pp. 164–167.4 Explanatory Statement, Broadcasting Services (Commercial Radio Advertising) Standard 2012, p. 4.

ACMA Investigation Report – The John MacKenzie Morning Show broadcast on 4EL (4CA) on 19 February 2013 5

Listener research indicates that integrated advertising on radio, including 'chatty' interviews with advertisers can be more difficult for listeners to distinguish as advertising, as compared to the more traditional radio 'spot' advertisements.5 Despite this difficulty, commercial radio listeners agree that integrating advertising with other program content on commercial radio is acceptable.6

Research also indicates that there is some uniformity in the particular cues and signals that commercial radio listeners use to determine whether material is advertising.7 The cues and signals include:

mentions of a brand or product name and/or repetition of a brand or product name provision of company contact details highly or overly detailed discussions of products and services overly positive and unbalanced descriptions and discussions having a scripted or artificial feel associated with discussions.8

The timing of these elements is also relevant to the assessment of whether an advertisement is distinguishable 'at the time of broadcast' from other program material.

How was the advertisement presented on 4EL?

The licensee submitted that the Travelscene segment is a regular feature of The John MacKenzie Morning Show. On 19 February 2013, the advertisement was presented as a discussion between the program presenter and Jennifer, the spokesperson for Travelscene. Jennifer also introduced as a guest, Julie from the company Bench International specialists in South African tours.

The discussion began after a series of spot advertisements and was therefore separate from other content of The John MacKenzie Morning Show involving the presenter. Further, the discussion was a discrete segment, as the only topic covered was Travelscene's travel services and offers rather than concerning regional issues or other topics.

The ACMA’s view on whether the advertisement was presented in a manner that the reasonable listener was able to distinguish it, at the time of broadcast

As discussed above, Australian Courts have identified the characteristics of the ordinary reasonable viewer/listener. The ACMA takes the ordinary reasonable listener of commercial radio to be generally aware that various types of advertising is used on commercial radio, including spot advertisements, live reads by presenters as well as interviews with advertisers.

The presenter's statement approximately one minute before the interview, established that the segment would involve discussion of '…some travel bargains from Jenny from Travelscene American Express, one of our program sponsors…' Accordingly, listeners were alerted to the sponsored nature of the upcoming segment.

As indicated above, the company's name, location and contact details were provided during the segment. Further, the segment did include highly detailed discussions on the services and tours offered by Travelscene. The discussion promoted the company by favourable comments on the travel deals and prices offered by Travelscene. In particular, the repeated praise for the prices offered by Travelscene were overtly positive and unbalanced.

5 Listener attitudes to advertising, sponsorship and influence on commercial radio, February 2010.6 ibid., p. 3.7 ibid.8 ibid., p. 32.

ACMA Investigation Report – The John MacKenzie Morning Show broadcast on 4EL (4CA) on 19 February 2013 6

While this interview with advertisers ran for approximately 15 minutes, which is longer than the typical duration of a spot advertisement or live read, there were sufficient cues and signals throughout the discussion to indicate it was an advertisement.

The ACMA is of the view that the advertisement was presented in such a manner that it was distinguishable to the reasonable listener, at the time of broadcast, as an advertisement.

Issue 2: Compliance with section 8 of the Disclosure Standard 2012

Relevant sections of the Disclosure Standard 2012Section 8 of the Disclosure Standard 2012 provides when on-air disclosure announcements are to be made:

(1) This section applies if:(a) a sponsor or an agent of a sponsor has a commercial agreement with a licensee, a related

body corporate of a licensee, a presenter, or an associate of a presenter of a licensee: and(b) the licensee is broadcasting material in a current affairs program that:

(i) promotes the name, products or services of the sponsor; or(ii) includes an interview with an agent, employee or officer of the sponsor in relation to a

matter that concerns the sponsor, its products, services or interests; or(iii) is requested by the sponsor, or which is based on, or similar to, material provided by the

sponsor; or(iv) directly promotes an issue which is directly favourable to the sponsor.

(2) The licensee must ensure that a disclosure announcement that is clearly identifiable to a reasonable listener as a disclosure announcement, is broadcast on air during the current affairs program at the time of, and as part of, the broadcasting of any material in subparagraph (1)(b)(i),(ii),(iii) or (iv).

(3) However, a disclosure announcement is not required to be broadcast if the material is:(a) a news broadcast or bulletin; or(b) an advertisement that is clearly identifiable to a reasonable listener as an advertisement.

The meaning of a commercial agreement is provided by section 5 of the Disclosure Standard 2012:

(1) An agreement, arrangement or understanding (whether in writing or not), between a sponsor, or an agent of a sponsor, and a presenter, or an associate of a presenter (whether or not there are other parties to the agreement), is a commercial agreement for the purposes of this standard if it:(a) provides for the presenter, in exchange for consideration provided to the presenter or an

associate of the presenter, to:(i) promote the sponsor; or(ii) promote the products, services or interests of the sponsor; or(iii) refrain from making a negative comment about the sponsor; or(iv) provide services in respect of publicity, promotion or public relations for the sponsor; or

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(b) imposes an obligation on a presenter or an associate of a presenter to provide things for the sponsor (other than a thing mentioned in subparagraph (a)(i),(ii),(iii) or (iv)), in exchange for consideration of $25 000 or more a year, and is not solely to:(i) provide writing services for a publication; or(ii) perform or appear in a film, television program or theatrical production; or(iii) provide voice-over services for an advertisement.

(2) An agreement, arrangement or understanding (whether in writing or not), between a sponsor, or an agent of a sponsor, and a licensee, or a related body corporate of a licensee (whether or not there are other parties to the agreement), is a commercial agreement for the purposes of this standard if all of the following apply:(a) the agreement provides for the licensee, in exchange for consideration provided to the

licensee or a related body corporate of the licensee, to:(i) promote the sponsor; or(ii) promote the products, services or interests of the sponsor; or(iii) refrain from making a negative comment about the sponsor;

(b) a presenter of the licensee does a thing mentioned in subparagraph (a)(i),(ii) or (iii);(c) the presenter or an associate of the presenter has:

(i) a beneficial or legal interest in shares in the licensee or a related body corporate of the licensee; or

(ii) if a dividend were declared by the licensee or a related body corporate of the licensee—a beneficial entitlement to be paid or credited a dividend; or

(iii) a contractual entitlement to a share of the licensee’s income or profits.

Section 4 of the Disclosure Standard 2012 provides the following definition of a current affairs program:

current affairs program means a program a substantial purpose of which is to provide interviews, analysis, commentary or discussion, including open-line discussion with listeners, about current social, economic or political issues.

Complainant’s submissionsThe complainant alleged that:

At no time was the listener informed that this was actually 'cash for comment' with the interviewees actually paying for this time as a commercial.

Licensee’s submissionsThe licensee submits that the presenter of the program does not have an agreement with Travelscene that satisfies section 5(1) of the Disclosure Standard 2012. Further, while the licensee does have an advertising agreement with Travelscene, there is no commercial agreement under section 5(2) the Disclosure Standard 2012 because the presenter does not have a prescribed interest in the licensee.

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FindingThe licensee did not breach section 8 of the Disclosure Standard 2012 in its broadcast of The John MacKenzie Morning Show of Tuesday 19 February 2013, as there was no relevant commercial agreement under the Disclosure Standard 2012 which enlivened the obligation to make a disclosure announcement. Consequently, the licensee did not breach the licence condition at clause 8(1)(b) of Schedule 2 to the Act.

ReasonsSubsection 8(2) of the Disclosure Standard 2012 requires a commercial radio licensee to broadcast an on-air disclosure announcement if, under subsection 8(1) of the Disclosure Standard 2012:

(a) there is a relevant commercial agreement in place; and (b) the licensee broadcasts material in a current affairs program that:

(i) promotes the name, products or services of the sponsor; or

(ii) includes an interview with an agent, employee or officer of the sponsor in relation to a matter that concerns the sponsor, its products, services or interests; or

(iii) is requested by the sponsor, or which is based on, or similar to, material provided by the sponsor; or

(iv) directly promotes an issue which is directly favourable to the sponsor.

Application of the Disclosure Standard 2012 to the segment broadcast on 4EL

In assessing whether the licensee was required to broadcast an on-air disclosure announcement in accordance with section 8(2) of the Disclosure Standard 2012, the ACMA needs to consider whether:

there was a commercial agreement under section 5 of the Disclosure Standard 2012; and the licensee broadcast material in a current affairs program; and the material broadcast meets at least one of the four types of material described in subparagraphs

8(1)(b)(i) to (iv) of the Disclosure Standard 2012.

The register of commercial agreements on the 4EL website identifies an agreement between the licensee and Travelscene Smithfield.9 However, as clarified by the licensee's submission to the ACMA, that agreement is an advertising agreement between the licensee and Travelscene is not a commercial agreement under section 5 of the Disclosure Standard 2012.

Conclusion

The relevant segment of The John MacKenzie Morning Show of 19 February 2013 was not subject to a commercial agreement and therefore, the licensee was not required to broadcast an on-air disclosure announcement under the Disclosure Standard 2012.

9 www.4ca.com.au/ - accessed 14 March 2013

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