The worst-kept secret in adland is becoming confirmed, with one-third of brands saying they are having their marketing budgets cut (lead image: Josh Faulks, CEO of AANA).
An anonymous survey conducted by the Australian Association of National Advertisers (AANA), found that a range of big-name brands are reducing their advertising spend as marketing budgets shrink.
A cut in ad spending could have serious impacts for media owners. The survey also found that 71 per cent of advertisers will be prioritising “marketing effectiveness/return on investment” above all else. Sustainability came second at 40 per cent.
“Some of my members have got rock star sales performers, but that’s being overwhelmed by unprecedented increases in cost supply chain. One iconic Australian brand, they said they’ve got double-digit growth in sales, but that’s being met by 20 per cent increases in costs,” Faulks told the Australian Financial Review.
“They’re going backwards. They can’t pass that all on to customers, they have to cut costs in other ways.”
The AANA said that it is telling its members and the market to keep investing through uncertainty.
“What I find encouraging is that two-thirds are holding. I think now is not the time to cut,” said Faulks.
“There’s plenty of research that supports the proposition that brands that maintain or increase their marketing spend outperform their competitors and are in a much better position to supercharge a recovery. I find [it] a bit of a no-brainer – if you maintain and everyone pulls out, you’ll grow market share.”
The industry has been talking about the effect that growing economic challenges will have on marketing budgets for a while now.
In B&T‘s podcast with Appsflyer and Canva, the two companies discussed the importance of effective digital measurement and how it can prove the difference between growing businesses.
