Westpac has slashed its advertising expenditure by an estimated 70% in the six months to April, sparking frustration among media owners who were forced to offer aggressive volume deals to the bank following a contentious media account review last year.
Westpac’s consolidated media tender was ultimately won by MediaCom in a two-way tussle with incumbent OMD, but conjecture was whirling at the time about cutthroat media deals the bank was able to extract in the review, based on spending levels of around $70 million.
According to spending data obtained by AdNews, media investment for the Westpac brand has slumped 72% to $6.1 million in the six months to April over the previous six months to October. These figures do not cover Westpac Group brands which include St George and Bank of Melbourne.
“Westpac is down hugely,” one prominent media executive told AdNews. “It’s actually surprising to see the levels of inactivity given what was discussed late last year. I’m really across this one. We’re down and certainly way down based on what was touted for the brand last year. It’s a big shift and not in a good way.”
According to some executives in the banking industry, Westpac’s activity has been a “tale of two halves”. “They certainly came out hard in July-August last year with the Westpac brand launch,” one banking executive said. “It really is a tale of two halves. Spend for Westpac in particular is back 72% on the second half of the year to the first.”
Another media executive told AdNews they were still perplexed about what was happening with the bank’s marketing activity and the plans of Westpac’s general manager of strategic marketing, Damian Eales.
“Damian is a very good marketer and a clever one,” he said. “He knows what is required to hit his brand health benchmarks and all of those other measures. He’s not going to sit back and watch ANZ, CommBank and NAB do what they’re doing and Westpac not. He’s got runs on the board. It’s only a matter of time, one would think.”
When asked to confirm Westpac’s spending cuts, a bank spokeswoman indicated the bank was likely to increase budgets. “While we reduced our media spend as we prepared for a lower-growth environment, we increased our CRM focus to communicate directly with customers,” she said. “Our intention is that the reduction in above-the-line spend is short-term and we will look to increase our position in the longer term.”
Another point made by some media industry executives was around the Westpac-owned St George operation. “The question for Damian is what’s going on with St George?” one executive said. “They were making some ground but since the merger and the marketing teams have been combined, I can’t remember seeing much.”
This article first appeared in the 15 June 2012 edition of
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