Emilia Chambers.
The AdNews end of year Perspectives, looking back at 2024 and forward to next year.
Emilia Chambers, Head of Strategy, The Pistol
There’s no denying that 2024 was another challenging year for consumers and brands. While the endless rate rises of 2023 were thankfully left behind, we still faced cost of living pressures and economic uncertainty that left consumers tightening their pursestrings and brands needing to do more with less. But what came out of this was a renewed focus on what I would describe as the ‘importance of important’.
When faced with smaller budgets but bigger ambitions, many of us had to sit down and define what was most important - the needs, the non-negotables, the nows that impact the next. We had to make sure that everything we did was working towards a bigger goal, not just ‘for the sake of it’ or ‘because that’s how we've always done it’. What this resulted in was a silver lining of redefinition and innovation, with opportunities across the industry emerging and changing the way in which we work, activate and grow.
GenAI continued to cement itself as an important tool in our everyday processes, allowing us to work faster and think bigger. We’ve moved away from fearing the technology to embracing it, with WARC reporting that 95% of Australian businesses are leveraging more AI across their marketing efforts. What will separate brands in the coming years is how they evolve their use of AI - those who continually adapt and expand their utilisation as the technology evolves will reap the rewards far more than those who stay the same.
We saw increased importance placed on data, both from acquisition and enrichment perspective. Having email addresses was no longer enough, with many brands investing in data strategies that focused on not only increasing the volume of consumer data, but enriching it to tell deeper consumer stories and provide insights that could be used to inform marketing and broader business initiatives. But, with this, came increased demand from consumers around data privacy and transparency, a trend which is expected to continue well into 2025 and beyond. Research by Honeycomb Strategy found that nearly 88% of Australians demand greater clarity on data usage intentions by the brands they engage with, and many will switch brands if they feel their data is mishandled. Winners in this space won’t be just those who capture the most data, but those who store it and use it responsibly.
With tighter budgets came a need to increase revenue and source new revenue streams. This was anything from new channel opportunities, reaching untapped audiences or expansions and pivots in offerings. Retail media was a big growth opportunity for many brands, allowing them to unlock lucrative data and real-estate across their owned assets that could form a new revenue stream. With this, we’ve seen a significant increase in the number of retail media networks (RMN) launching in Australia, including big names such as CommBank and Afterpay announcing their own RMNs. While retail media in Australia is still quite young in comparison to our overseas counterparts, it’s only going to continue to grow, with Morgan Stanley forecasting the category to be worth $2.8 billion by 2027. My bet is that retail media will be the big growth focus for many brands in 2025.
But innovation and opportunity for change aside, this year had a shadow over it, that shadow being an overfocus on short-term performance and vicious seemingly never-ending sales cycles. Short term revenue chasing became a focus for many brands, with sales being a tactical lever to attract audiences and drive conversions.
The importance of understanding how the now impacts the next was lost and, while targets were hit, these brands are now at risk of longer-term challenges. Hyper-focus on performance can hinder creativity and innovation, making testing feel too risky if the revenue is not guaranteed. It can also dilute their image to consumers, resulting in consumers making purchase decisions based on price and not salience or affinity towards the brand. As we hopefully begin to emerge from the economic challenges that have plagued us the last couple of years, 2025 will be when we’re likely to see what the impact of these decisions will have on the brands that doubled down on performance.
Personally, I’m heading into next year optimistic. Yes 2024 had its ups and downs but it taught us the importance of important and we can take a lot of what we learnt from this year into 2025. I’m excited to see more innovation, risk taking, bigger growth opportunities and an increased focus on building brand love. If I had to provide one piece of advice as we head into the new year; remember that short term rewards don’t always equate to long term growth, so when determining what is important, make sure you’re considering both the now and the next.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.