The boss of GroupM has said market uncertainty and a conservative approach from advertisers has created the shortest advertising market he has seen in a long time.
John Steedman (pictured), the head of the WPP-owned media group which has combined annual billing in excess of $1bn through its agencies MediaCom, Mindshare, Maxus and MEC, also called for the government to revisit the “antiquated” media ownership laws.
Addressing 100 senior marketers at the Australian Association of National Advertisers Congress, Steedman said: “There is a huge amount of uncertainly in the market and consequently this uncertainty has led to a conservative approach from advertisers in making decisions about their marketing plans. I have never seen a market at the moment as short as it is, in a long long time. The media owners are finding it very difficult to forecast what the spends are going to be because the market it just so short.”
Responding to Steedman’s comments, Telstra’s chief marketer said the telco was benefiting from the soft advertising market. “I think that’s fantastic, we are certainly taking advantage of it,” he said. “It is a very competitive environment and that’s what cycles like this do.”
GroupM is predicting around a 3.5% increase in media spend in 2012, a year which Steedman claims will be a media environment of ever increasing complexity.
“The old friends have now become fierce rivals, in as much as James Warburton going across to the Ten Network and Tim (Worner) taking the role at Channel Seven, they are likely to put a stamp on their domains adding to the instability in the market place,” he said.
On media control laws he said: “Ownership rules are antiquated and need to be revisited by the government, because the media environment has changed over the last 10 years, but the media ownership rules have remained the same and the market is very concerned.”
Steedman said speculation that Pacific Magazines would buy rival ACP was “highly unlikely” as the ACCC would be likely to block any acquisition. He also said the magazine industry was not marketing itself as well as it could be.
The only way media agencies will be able to stand out from the crowd is if they embrace and manage data and technology, he said. “Data is helping us navigate our way out of the complexity of the media market. Data can be received from a multitude of sources. It’s how you bring it together in one that will be the businesses that will win.”
And in a warning to advertisers he added: “Operating on gut feel is no longer good enough. Thinking will deliver smart results to you the advertisers.”