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Managing Marketing: Fake news and its impact on news media

Peter Miller

Managing Marketing is a podcast hosted by TrinityP3 Founder and Global CEO, Darren Woolley. Each podcast is a conversation with a thought-leader, professional or practitioner of marketing and communications on the issues, insights and opportunities in the marketing management category. Ideal for marketers, advertisers, media and commercial communications professionals.

Peter Miller is the CEO of News Media Works. He chats with Darren on the role of News Media in society as the fourth estate of democracy and the impact of #FakeNews on news media brands. The irony of Facebook turning to trusted media such as out of home, television and newspapers to spread their message on fake news, fake accounts and data security and the double standard the industry appears to have on media metrics.

 

You can listen to the podcast here:

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Transcription:

Darren:

Welcome to Managing Marketing and today I have a chance to sit down with Peter Miller, CEO of NewsMediaWorks. Welcome, Peter.

Peter:

Thanks, Darren.

Darren:

We go back a long way.

Peter:

We do.

Darren:

We’re actually friends from last century.

Peter:

We are friends from last century and we were in different jobs then.

Darren:

Very different jobs.

Peter:

You were Creative Director of JWT as I recall.

Darren:

That’s right and where were you?

Peter:

ACP, I think—probably my first employer (ACP Magazines) and I was there for 13 years. I think I met you in the first phase of my career back when I knew very little.

Darren:

I think we both knew very little. But now you’re CEO of NewsMediaWorks and it’s such an interesting area, this idea of the role of news and especially news media in advertising. It must be quite a dynamic area to be working in.

Peter:

Yeah, it’s very exciting. There’s a little bit of nostalgia for me. I studied media under Professor Henry Mayer at Sydney University, started my career working for the Packer magazine organisation and then went to news and Fairfax and then worked for the Stokes Control Pacific. I spent 25-27 years in media and then I went into technology for a long period of time before taking on this role.

I can say to people without fear of contradiction I had the most fun working in the big newspaper companies because they really hum and news is important. And it was at the heart of my university interest. News media is a fascinating area because it’s evolving, transitioning and because it’s exciting and affects peoples’ lives. And it’s still a very big commercial business.

Darren:

So, the organisation you work for could easily have a question mark at the end of it, which is NewsMediaWorks?

Peter:

It certainly does. It should have an exclamation mark not a question mark, Darren. News media is a very powerful medium and it’s imbued with journal of record status. News media runs across newspapers, news websites and their related apps and access points (online digital delivery of news), television, radio but we represent the traditional newspaper publishers and 50% of their audience reach is now accessing the news brand or content online.

It’s a little more 55/45. Our patrons, shareholders are doing what everyone else is doing: giving people the content they want in the format and at the time they want it.

Darren:

The reason I said question mark is because the biggest story in news media is fake news.

Peter:

Yes.

Darren:

This whole concept of fake news—we’ve even got the leader of the free world referring to the news media as the fake news media.

Peter:

Yes, it’s the gift that keeps on giving isn’t it? And why is that? What the leader of the free world is doing is shamming the New York Times primarily but he equally detests the Washington Post because these are papers of national importance that are reporting on the facts and are really invested heavily in holding, not the just the president of the United States but everyone in the United States government and business community to account.

And he detests the transparency they bring to what goes on and he accuses them of producing fake news when we all know that the fake news really exists online and especially on Facebook. It can be easily searched and people are doctoring content so I think people are addled.

It’s really worked for the New York Times who are now running a campaign on the importance of news and finding the truth. The truth is hard is their kind of campaign sting.

Darren:

It’s working economically because they’re getting a huge number of subscribers.

Peter:

Their digital subscriptions are heaving and the Washington Post is heaving. The Washington Post shouldn’t be considered as an exemplar because it’s owned by (I think) the world’s richest chap and he’s invested heavily but he’s doing a good job running a news media organisation.

And the Wall Street Journal is promoting itself on the basis of balance. They’re running this beautiful red and blue campaign; whether you’re a Republican or Democrat come to the Wall Street Journal and you’ll find the truth here.

In fact, it’s spawned not an editorial but a marketing response and in the age of digital subscriptions people are saying yeah, I want that balance, I want the truth and they’re prepared to buy it.

Darren:

I want a perspective that comes with some credibility whether you believe it or not.

Peter:

Yes, there are a few papers (the New York Times chief among them) that have absolutely profited from being attacked. I think the whole of the news media firmament has done well because consumers are now troubled. They are troubled not just because of the rise of fake news.

Many of them right across the demographics know that you can play with digital images and words and formats. You don’t know where it’s coming from. But you know if you’re getting it from a newspaper or a news website that’s run by a company that’s just down the road and has its head office in Holt St or Pyrmont or whatever they know that that’s happened.

Darren:

The masthead is the brand and many of these mastheads have been around for more than a century and they’ve built a reputation for being reliable.

Peter:

That’s exactly right.

Darren:

And I think that’s how it works. Do you think it was because of the commercialisation, especially in the latter part of the 20th century? When we got to 24 hour news cycles, news television and the advertising was paying for it that people actually forget that journalism is one of the pillars of democracy?

Peter:

I think less likely now because people are being reminded every day that if it wasn’t for journalists we wouldn’t know what was going on. And great stories like the work the Washington Post did in the Watergate and Vietnam years and the work that the Sydney Morning Herald and the Australian are doing covering public interest journalism, which is and has to be funded by advertising and consumer subscriptions and cover price sales because there is still a very sizable cover price revenue.

Darren:

But I wonder if people took it for granted because of that very obvious commercialisation. We’ve had media companies become very high profile and it was all about share prices and value when in actual fact at the very core of a media company is an inherent responsibility to be that Fourth Estate, a pillar of democracy as it’s practised in Westminster and the U.S. and in Australia.

Peter:

I think you’re probably right. I think people did take it for granted when these companies were thriving and their attention was distracted by the great valuations and profitability. But that was very much at the heart of—you’ve got the government, judiciary, the armed forces, and you’ve got the papers and journalists.

Darren:

And then you’ve got the Church.

Peter:

Well the Church’s relevance is dimmed for many of the same reasons politicians are distrusted. People are addled by the inability to trust institutions.

Darren:

Trust has decreased and we’ve seen it decrease every year.

Peter:

We’ve done research (without peddling) that favours our media shamelessly. We’ve invested in some trust research and newspapers and news websites are trusted more than the run of the web, social media, search, and more than every other media.

But I think one of the reasons trust is now becoming such an important thing is because it’s been breached so often. You’ve got the bank inquiry. You’ve got breaches of trust by institutions like the Church.

I think it’s no accident these stories are being broken by news media organisations of repute. And that’s where people can go. The Facebook scandal around Cambridge Analytica was broken by The Guardian—a proper newspaper and investigative journalism.

Darren:

Proper journalism.

Peter:

Going at it for a year, being threatened by Facebook and the former company Cambridge Analytica (which theoretically doesn’t exist anymore) and people are now returning to printed journals and their related websites for a good reason because they can rely on what’s in them.

Darren:

The reason I bring it up is I think people have forgotten that to be a media proprietor in the times of Randolph Hearst and the rest in the very early days, there was a huge social responsibility that they were held account to. Likewise, even when TV licences were given out there’s a huge responsibility to provide news coverage even through TV and radio.

What was the print media and I know that newspapers are only one way the news journalism is actually distributed, it’s largely also digital now but it’s still that mechanism that sets the news agenda for the day isn’t it? Whatever you read on the front page of the Sydney Morning Herald or the Australian or the Telegraph or The Age will then be the stuff they’re talking about on the television and radio stations and the like. It really is where the news cycle starts.

Peter:

In one way editors of daily newspapers, particularly the metropolitan papers and the nationals probably get infuriated that the talkback radio people are just basically reading their content straight off their pages, but on the other hand they should be sending them a thank you note.

They don’t get credited for it but I think consumers are wise to the fact that what’s being said on the radio is what’s in the papers and how did it get there.

Darren:

That raises another interesting point from my perspective, which is that people should be credited. The source of news should be credited and one of the issues we’re facing with, let’s call them the digital aggregators, is that although they run the name of the source, the revenue which is generated isn’t actually passed back to the people who created that content in the first place.

Peter:

No, that’s right. It’s an uneven playing field and these organisations have great market power and share and in the early days of the web there was a tendency to produce a lot of content and put it on the web because it was a fantastic marketing platform.

Darren:

Well, it was free.

Peter:

The big platforms have developed and grown and now they’re profiting from this content but there is no mechanism whereby the content generators are remunerated. And there are different people who are proposing different models about how that can be rectified.

Darren:

I gave evidence along with Denise Shrivell at the senate hearing into public interest journalism and the example I used, which I actually got from Paul McIntyre, he said to me imagine if Foxtel came along and lifted Four Corners from the ABC and ran it on Foxtel with 13 minutes of advertising sprinkled (Four Corners goes for 45 minutes so it’s perfectly set up to make it a one-hour show and put 15 minutes of advertising) and then turn around to the national broadcaster and go ‘thanks for the content, we’re keeping the advertising revenue’.

Peter:

Four Corners ABC—I’m sure they’d be satisfied with that.

Darren:

That’s exactly what’s happening every day through the digital aggregators like Facebook and Google.

Peter:

I think we’re at an end game there. There’s a lot of focus on this. Google have taken some actions that are important in terms of returning some equity to the content producers. They’re developing subscription offers. They removed the one-click free, which basically waved every consumer of news on Google straight through every pay wall in the world. That’s been eliminated largely due to pressure from publishers and Rupert Murdoch who have been very vocal.

And Google work with publishers to help generate revenues. They sell them tech, they’re involved in programmatic so there’s a lot of action there. It’s by no means solved the problem but it’s movement and these things can take a while to play out.

And then you’ve got Facebook talking about changing its models and recognising that news and original public interest journalism is important to them, their users, the world and the community. They’re more talking than doing; we haven’t seen much action yet but the narrative’s changed.

And in the middle of that you’ve got the ACCC inquiry which shines a light. I think the best thing about the ACCC inquiry is that it’ll hasten these conversations and help with the dialogue between news media, originators and the platforms.

Darren:

Let’s hope it gets to the point where the flow of income can be reinvested back into the very engine that drives this which is quality journalism.

Peter:

I think there have been some baby steps but that’s all they are at the moment. But the tom toms are beating and I think the best outcome is a commercial outcome. We don’t want to win by appealing. We want to succeed by winning and succeed on the merits of our offer.

Darren:

As long as it’s a level playing field and it hasn’t been up till now. I just read that LinkedIn is building their own network of journalists to generate original journalistic content on LinkedIn.

Peter:

I wasn’t aware of that. That makes them a publisher then.

Darren:

Absolutely because I think they’ve recognised that it isn’t enough to just collate user content. They’re a business publisher in the business category.

Peter:

I’m a LinkedIn enthusiast but I’m not a full metal jacket user and I wasn’t aware of that. I was aware that they provide opportunities and it’s a good way to find information about a business.

Darren:

They’re recruiting editors and journalists globally who will then be generating original content on issues and then publishing that into the platform.

Peter:

Well it’s certainly better than nicking other people’s content, which has become de rigueur.

Darren:

Well there are even a few publishers who are known to do that.

Peter:

Facebook have announced that they’re hiring fact checkers, which is a relief since the algorithms have been doing such a poor job.

Darren:

That’s one of the other things I wanted to talk to you about. Don’t you think it’s ironic that Facebook is using newspapers and outdoor to communicate the fact that they’re against fake news, fake accounts and they’ve gone to the very media the digital world says is dead to communicate the fact they’re doing something about it?

Peter:

Perhaps their next campaign will say we were wrong. It doesn’t surprise me that they’re going outside their own medium to promote a new credential which is we’re sorry, we didn’t mean it, we’re going to get better.

In point of fact they’re using outdoor, television, and cinema and I’m unaware of a big commitment to newspapers, which is a shame because newspapers are the most trusted media and they’re campaigning for what they hope will be a newfound trust in them. They’re going to do better.

But it does not surprise me they’ve gone to traditional media and outside their own media but it would be just like a public apology, like Zuckerberg standing up once again to say we’re sorry.

Darren:

Sorry, it wasn’t this campaign in newspapers. What they did was run Mark Zuckerberg’s apology in newspapers, all of the major newspapers in the U.S.

Peter:

Sorry, I misunderstood you. I thought you were talking about this recent campaign. I know all the newspaper publishers are busy knocking on their agencies’ doors to get a piece of that business.

On the face of it it’s ironic but on the other face it’s completely logical. Newspapers are a canvas. A letter of apology that big says I’m really sorry so there’s something McLuhanesque about that; it’s unmissable page 3, 5, 7, 11 or whatever page it was on. And if you go wall to wall across America or Australia with an early general news full-page ad that’s a powerful way to communicate.

And it’s written down. And even if it’s in the digital news websites—a very powerful way to communicate. It’s not the same thing as a hair-parting full page ad in every broadsheet and tabloid in the country but it kind of made sense to me. Probably there was a little bit of strategic advice to say what’s the best way for us to get a message out in a big way in trusted media in a way which is going to be remembered and get talked about? And of course, it has been talked about. We’re talking about it now.

Darren:

I say ironic because it’s interesting how the big digital players have always positioned themselves as this is the platform for the future, this will be the only platform. They have this vision of this will be the consolidation of everything you’ll ever need and that’s why even in their own business development they just keep adding additional things into the platform so you can buy things, book tickets, do all of this through the platform, that your life will be this platform.

And probably the one that’s most successful at it is Amazon and they’re also an ad/media player. It’s interesting that for an industry that’s all about digital first that when push came to shove they reverted back to using traditional media outside of their digital platforms.

Peter:

Yeah, it was obviously very rewarding and there wouldn’t be a news media organisation in the world that hasn’t celebrated this fact and it’s also yet another example of advertisers coming back to using newspapers as an impact medium. And we’re seeing good growth in community, regional and national newspapers and the metros won’t be far behind them.

But I think in that particular case and in the KFC campaign people forget that there’s craft in advertising. It’s not just about the medium; it’s about the message so that was a perfect place to publish a letter. I didn’t get the outdoor.

Darren:

It’s a very short letter.

Peter:

Not when you’re doing 100 kms an hour down a freeway in America.

Darren:

Certainly, the campaign that’s running in Australia, most of it is street furniture so it’s targeted at people standing there waiting for something.

Peter:

Being reassured of the important, great and good.

Darren:

It’s also interesting because one of the things about outdoor is it’s very public. You are putting your message out in the public, more so than any other medium.

Peter:

Standing there naked really.

Darren:

Then back onto their own digital platforms come all the photos of the sites that have been vandalised to put the negative connotation of what they’re trying to achieve.

Peter:

We talk a lot about the positives of newspapers and news websites and trust is one of them, impact and reach, and there are lots of terrific qualities but they’re shared by other media. Other media have reach and impact propositions.

Whereas a newspaper is a journal of record and things get written down. I can understand the Mark Zuckerberg letter running in it. I also get that you make a very powerful point that outdoor media is a public apology, more public even than in the newspaper.

Papers are a one to one medium; I’m reading it and believing it or I’m not but in the outdoor world there’s a lot of incidental readership.

Darren:

Everyone’s standing there looking at it saying ‘gee, they must have screwed up, look how big the apology is’.

Peter:

Fake news is not our friend. I don’t doubt the authenticity in that but it hasn’t happened yet and they may not like fake news but how to stop it happening and algorithms won’t do it because the algorithms have enabled it.

I’ll believe it when I see it happening and their hit rate gets back to nothing, which is how much fake news occurs in the paper.

Darren:

This is a good point about algorithms and artificial intelligence because every time there’s either an algorithm or a mechanism of learning there are ways to game it. That’s the beauty of the human mind that it can be used for greatness or it can be incredibly devious.

Peter:

Used for evil. I worked in technology for a very long time and the fact is that for every 100 nerds working at Facebook there are 100 nerds trying to break it. It’s a red rag, an invitation to come play. These people, they’re nerd-like trolls aren’t they? They’re energised by any promise that can’t be beaten.

Darren:

This is the challenge. As soon as someone says we’re going to eliminate or minimise X then it throws down the gauntlet for everyone else to go ‘o.k. we’re going to learn how to break that’ because as soon as they do there’s a huge kudos.

Peter:

It’s an incitement.

Darren:

But one of the other things is the way different media are actually judged around accountability. I read an article where someone was complaining about the accountability of outdoor because those big sites they just do a traffic count of the number of people that drive past the site and that’s the viewability.

Newspapers, circulation, readership figures people are always going on how could you prove that it’s 2.3 readers per copy sold and yet we’ve just has Facebook announce that in 3 or 6 months they eliminated almost a billion fake accounts and yet I didn’t hear anyone screaming. And I haven’t seen the investment in Facebook disappear like I think it would if TV, newspapers or magazines suddenly said, ‘almost 50% of our numbers are actually fake’.

Peter:

Yes, the whole issue of fake accounts –fake news is one thing but fake accounts is another. Obviously, there are questions about the real delivery on Facebook to advertising investments because they don’t submit themselves to 3rd party metrics but there is talk that they are moving to an agreement in the United Sates and no doubt as a global company.

We are hearing a lot of encouraging things about Facebook but we’re not seeing them but I’ve been surprised by the silence of the market. The big media agencies, the big personalities in the media—I’ve been surprised that there hasn’t been more. We’ve obviously beaten the drum about that and asked for the questions to be asked. I was quoted in the Herald as saying, ‘I’d be wanting my money back if I learned that’.

Facebook have a different narrative. They say for 14 years they’ve been witnessing people creating fake accounts for commercial reasons and they’re on to them within two to three days and these accounts don’t affect their total user base because they get created and they get wiped.

This just goes back to the fact that they’re being gamed and in a less spectacular way the advertising business is being gamed too because they don’t know. There is no independent measurement of the claims that Facebook make and that’s the bigger issue. It’s even bigger than the fake account thing because there’s no doubt there’s one story here and another way of interpreting it there.

If a billion fake accounts get created and they’re gone 3 seconds later then they didn’t exist materially. But they probably did move some dough and there’s no doubt about that. I think the traditional media are held more to account and of course there are some government regulations. Our media, outdoor, television, there are all kinds of government accountabilities and when I say government I mean the public.

And these big apparitions from around the globe in the digital world aren’t held to account in the same way and everyone seems to accept the failure.

Darren:

That was my point; the level of accountability and reaction to that accountability seems to be disproportionate because to move from diaries to people counters, from audited circulation to surveyed readership numbers there is always greater interrogation, interest, and criticism when we could be talking about incremental percentage points of difference.

And here we’ve got an example of a digital platform where we are talking about a billion users, almost a half—why aren’t people running down the street with pitchforks and flaming torches going ‘what the hell have you been doing to us?’ Is it apathy? Is it ‘oh, they’ll get it right’? I really can’t understand.

If any other medium did this; ‘we’re coming clean—all those numbers we’ve been giving you, they’re almost double’.

Peter:

We’ve been overcharging you by 100% for ten years.

Darren:

Sorry. But we’ve fixed it so let’s get on.

Peter:

We’re going to do better. I don’t have an answer to that question. I am incredulous because if there was a rating shift 5 or 6 years ago of a full percentage point there’d be discussions about rebates. Market share; you didn’t deliver. Readership figures head south, which I’m glad to report they aren’t, but if they do on a publication there’s going to be a conversation about it. That’s the media agency’s job.

Maybe these conversations are being had one to one (mano a mano], media agency to haggard, beaten up, under remunerated Facebook rep. I don’t know but I’m sure not reading it in the Trade Press, that this is a scandal. And I ask the same question as you and I don’t have the answer. It beats me—double standard.

Darren:

Obviously representing NewsMediaWorks you would be looking towards quite a positive future for public interest journalism and news media as a medium but what do you think is going to be the game changer, if anything, that will get this balance, this level playing field, get people focused on paying and investing in having what we could easily lose?

Peter:

I think this topic’s being widely and brightly illuminated by discussions like this and discussions are being had in Senate inquiries, papers published by academics, conversations and submissions. I don’t know how many submissions there were to the ACCC inquiry but they were all logged on the site and they can all be read.

I think there are a lot of conversations and at, a community level, business level, and government level, and at a commercial level between the players and I think they’ll lead us to a much better place. In the meantime, I think the rattled state of the community in terms of trust in institutions and digital platforms has done our members a great favour and we’re seeing definite interest from agencies and advertisers back in our printed products, which is very exciting.

Digital has been growing anyway. The digital news sites produce 25 or 30% of the news media’s revenues. That’s going to grow to 40. Eventually it’ll be 50. What’s especially pleasing is print advertising was in severe negative growth for 5 years and it’s now shaping up again and in some sectors growing again.

I think there’s lots to be excited about and there’s another thing and that is winning is a habit and the sales organisations in our news media companies they’ve been getting a beating, missing targets, been hard to predict, negative growth for years; they’re suddenly on the up, hitting targets, they’re excited and there’s nothing like 1,000 enthusiastic salespeople out there harassing the media agencies for share to change things. I think that’s not insignificant.

The stories are good, the metrics are good, readership is sound, trust has come into the equation, doubt’s come into the equation around digital and the run of the web is considered a bit dodgy. People are worried about whether their money is really going to eyeballs. The measurements’ not there in Facebook and I think the tide’s definitely changed, turned. We’re excited.

Darren:

It’s good to hear. For us, in this time, to have a strong democracy requires strong public interest journalism and journalistic infrastructure that holds those in power accountable. I wish people could see that that was something worth investing (paying for) in because ultimately it will only survive if we get the economics right.

And from what you’re saying there seems to be enough of a change that that’s going to happen.

Peter:

I wouldn’t even call it hope. Hope, as we know, is not a strategy but there are definite signs. I know Paul Murray quite well and he’s got a great description for it: ‘journalism isn’t a self-saucing pudding’.

Public interest journalism is hard to do. The truth is hard, that’s the New York Times’ trade advertising beautifully executed campaign. Truth is hard to uncover. Those journalists are the best. They’re not kids, they’re expensive, and they’re serious players. These stories take a long time to work through. You’ve got lawyers all over them because of defamation problems.

Public interest journalism is so vital and it mainly happens on the news floors and to be fair there is probably investigative journalism on television and that includes the ABC. But it mainly happens in the newsrooms because that’s where the journalists are employed and but for them we’d be putting our faith in politicians and the judiciary and no one else.

Darren:

Speaking of politicians the government is just about to hand out the money that they’ve collected to support public interest journalism—one of the things that Nick Xenophon negotiated before he left the Senate. It’ll be great if that brings new journalists and helps develop new talent.

Peter:

It’s going into regional media especially is it not?

Darren:

Well they’ve got some criteria.

Peter:

Because that’s where the vulnerabilities have been greatest.

Darren:

It has to be Australian media. All we’ve heard about over the last 5/10 years is newsrooms getting cut so to actually recruit fresh people and bring some talent back into the industry has to be a positive thing. Diversity is one of the things that makes journalism great.

Peter:

I was very rewarded to read that Fairfax is recruiting 20 cadets, which is just fantastic.

Darren:

It’s been so long you’d almost forgotten what they were called. You almost called them apprentice journalists.

Peter:

I did. Well they are effectively apprentice journalists aren’t they? It’s just a fancy name, it’s like being in the army, the army of truth. That’s fantastic news and they’re the award winners of the future. It takes a while to get to be an award winner. There are very few awards handed out to cadets.

Darren:

Or luck.

Peter:

Oh well there’s luck in everything isn’t there?

Darren:

The harder I try the luckier I get.

Peter:

Exactly. Warren Buffet, the harder I work, the luckier I get. Regional publications didn’t have the big national advertising dollars behind them. They had local businesses and retail to rely on and much smaller markets and more finely tuned businesses and they’ve suffered the most. And of course, Facebook is now after what’s left of their income. So, I don’t think the big end of town can expect too many handouts from Mr Xenophon.

Darren:

Well, he’s gone now.

Peter:

Based on his initiative, the Fourth Estate but I think the regional publications are very important in the communities aren’t they and not just to the farmers, not just rural, it’s the High Street, town and country.

Darren:

Suburbs as well. Suburban newspapers have suffered. I think it’s important we have a thriving journalistic infrastructure to keep the councils, State, and Federal governments honest.

Peter:

It did wonders in Auburn.

Darren:

That’s true. Pete, we’ve run out of time. It’s been great catching up

Peter:

Run out of time, run out of battery. A very enjoyable conversation, Darren.

Darren:

One last question. What’s your preferred newspaper?

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Darren is considered a thought leader on all aspects of marketing management. A Problem Solver, Negotiator, Founder & Global CEO of TrinityP3 - Marketing Management Consultants, founding member of the Marketing FIRST Forum and Author. He is also a Past-Chair of the Australian Marketing Institute, Ex-Medical Scientist and Ex-Creative Director. And in his spare time he sleeps. Darren's Bio Here Email: darren@trinityp3.com

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