The AdNews end of year Perspectives, looking back at 2024 and forward to next year.
Josh Faulks, Chief Executive of AANA
As we crawl to the finishing line after an intense year, the marketing industry in Australia is at a pivotal moment as we grapple with economic headwinds, shifting consumer behaviour, fragmented media, rapid technology change, and the need to demonstrate value like never before.
For many businesses, this year was defined by squeezed margins, cost pressures, and flat to declining consumer spending.
For marketers, this translated into pressure to clearly demonstrate the return on marketing investment and a shift towards speaking the language of, and building closer relationships with, finance teams and business leaders to secure marketing budgets.
A tough economic backdrop
The economic backdrop in 2024 was challenging to say the least. Gross Domestic Product (GDP) growth was sluggish to non-existent, while GDP per capita has been in the negative for some time. Inflation has been stubbornly high, with it finally returning to the Reserve Bank’s target range in the September quarter. But, don’t expect an interest rate cut any time soon.
On the consumer side, household spending was flat and savings were low. Imagine what those numbers would look like without the record migration intake. Consumer confidence was on the rise in the September quarter, but it has been low for most the year with the rising cost of living dominating the conversation and spending behaviour.
In this tough economic environment, businesses had to navigate a path through rising operational costs and tightening consumer spending. As everyone tightened their belts, budgets were under scrutiny as marketing chiefs were asked to grow their businesses – often with less – while demonstrating the return on investment for every dollar spent.
Marketing as a growth driver
We all know that marketing is a critical driver of growth and profitability. If you want your business to grow - especially in the hard times - you must maintain that investment in marketing.
While there has been some anecdotal chatter about a swing back to brand-building, the data tells a more complex story. Many brands are still understandably cautious and have doubled down on performance marketing - seeking immediate returns. The key question is whether a continued focus on short-term performance will achieve sustainable growth for brands as the economy begins to recover?
The general consensus is the worst is behind us, but the recovery will be slow and patchy. Historical data shows that those brands that balance performance with brand-building strategies during economic downturns, emerge much stronger than their competitors because they are able to capture future demand.
The challenge for marketers in 2025 will be to make the case for this balance, backed by evidence tied to revenue, sales and growth.
Strategic Business Partners
There has been some good news for the marketing industry this year. Business leaders are increasingly recognising the critical role marketing plays as that driver of growth, particularly in difficult times.
The most successful marketing chiefs have stepped up as strategic business partners, deftly speaking the language of Chief Financial Officers, Chief Executive Officers and boards to demonstrate the critical role of marketing in terms of revenue, incremental sales growth, and return on investment.
The rise of advanced measurement tools like Marketing Mix Modelling has helped bridge this gap, giving marketers the tools they need to demonstrate the financial and business impact of their efforts.
This is a significant shift for our industry. Marketers who can quantify their contributions in clear business terms will be better positioned to protect their budgets and secure greater investment in the future.
Sustainability: now non-negotiable
Sustainability has been a focus for the industry in 2024. Increasingly, consumers and stakeholders are expecting brands to act responsibly and sustainably. AANA’s work on initiatives like the launch of the new Environmental Claims Code to stamp out greenwashing, and the launch the Australian Chapter of Ad Net Zero with ACA, IAB and MFA, has highlighted the importance of embedding sustainability into marketing practices. If you are not part of the Ad Net Zero movement already, now is the time to get on board. It’s not only the right thing to do, it is also good for business!
Looking to 2025
As we look forward to 2025, the challenge for marketers will be to take a proactive, long-term view that will enable their businesses to take advantage of the recovery that we are told is just around the corner.
While it may be tempting to focus on short-term results, the brands that succeed will be those that set themselves up for future demand and growth.
There are existing pockets of opportunity in different demographics – like the baby boomers – that can be leveraged now to lay the foundation for growth as the economy splutters back into gear.
The role of the marketing chief has never been more important - or more complex. Marketers who embrace advanced measurement tools and AI, champion sustainability, and align closely with business leadership, will continue to lead the way forward.
It’s been a tough year, but once again, our industry has proven that we are innovative, creative and resilient. It looks like the worst might be behind us. Let’s work together to ride the building momentum and make 2025 a great year!
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.