Two people close to the project put the blame on Accenture for Veeta’s failure, saying it was apparent those involved had little or no experience in the complex media and advertising market.
Information filed by News Corp with the trademark office shows that Veeta was registered in June last year, associated with a software-as-a-service platform that linked advertising and promotional services and access to search engines. Veeta has been registered and will be owned by News Corp until June 2032.
News Corp Australia executive chairman Michael Miller.
A News Corp Australia spokesperson said the decision to end the Veeta project was linked to the impact of the COVID-19 pandemic on the advertising market. During the pandemic, news publishers had a large increase in online traffic, and Google and Meta, which owns Facebook and Instagram, invested in their self-serve platforms for small and medium-sized businesses materially changing the landscape.
“This was a strategic decision reflecting how rapidly the SME advertising market evolved during COVID with a major step-up in digitisation, making it a less attractive concept,” the spokesperson said.
“SMEs remain an important part of our business and our commitment to servicing them remains undiminished.”
A spokesperson for Accenture said: “News decided to close the platform program that was in development, following their assessment of market conditions.”
Advertising accounted for 41 per cent of News Corp’s news publishing arm’s revenues in the nine months ending March, delivering US$687 million ($1.04 billion) of its US$1.7 billion total. News Corp Australia contributed $US749 million of that, but suffered a fall of 6 per cent due to a weak Australian dollar, print declines and lower digital advertising revenue.
News Corp is due to report its fourth-quarter and full-year results this Friday morning, Sydney time.
It has been a challenging year for publishing businesses. An advertising downturn fueled by rapidly rising interest rates and consumer uncertainty cut the advertising budgets of many major Australian businesses, while cost of living pressures have put pressure on subscriptions.
The project was axed as local News Corp executives were tasked with finding significant cost cuts and reducing the company’s headcount by 5 per cent. News Corp’s global chief executive, Robert Thomson, announced a 30 per cent drop in earnings in the three months to December last year, announcing 1250 roles would be cut worldwide.
“We are absolutely focused on reducing costs across our businesses and making price adjustments where prudent,” Mr Thomson said.
Cost-cutting included limiting the amount the company would reimburse employees to $21.50 a month for mobile phone plans, slashing staff travel and limiting meal allowances to $30 for breakfast and $60 for dinner.