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Media Intelligence : MT Resource 2010
I nterest rate rises are never far from the headlines. And in 2009, they may also be closely related to the advertising industry’s bottom lines. “ The threat of further interest rate rises is the biggest concern I have for consumer confidence,” says Jackie Edwards, National Buying Director for Initiative Media. Edwards is worried because she has just started to see business turn upwards after what she describes as “a difficult first half of the year”. “ We are seeing better demand, even if it is coming off a low base. But another half a per cent rise would be very scary for marketers because it would send a message that they should keep their belts tight for a while.” Steve Allen, Managing Director at Fusion Strategy, knows how unpleasant a too-tight belt can feel. “ The first half of the year was the worst recession cycle we’ve had since World War II, by a bull’s roar, ” he says. “When Europe, Asia and North America are all tackling huge economic problems, they don’t care that Australia – 2 per cent of the world – is still going great guns. So while technically Australia didn’t have a recession, our industry did. The local advertising industry got slammed despite the fact that Australia continued to perform so well because globally, brands put out the call to cut budgets and the local industry paid the necessary price.” John Sintras, CEO of Starcom MediaVest Group, has also found 2009 challenging, and says he feels the industry has endured “the advertising recession we did not have to have”. “ We have seen the largest declines in advertising spending in living memory, off the back of an economy that did not contract, ” he says. “It’s been a challenging time by anyone’s reckoning.” The contractions in advertising spend, says Fusion Strategy’s Allen, results in a tighter market for agencies and clients alike. “ There is twice the amount of work being done for half the amount of money, ” he says. “ We are cutting in and offering clients deep discounts to help them address the pressure they are also under. Their margins are being squeezed and so are ours.” Starcom’s Sintras has had similar experiences. “ The economy has forced us to get closer to clients and provide even more advice, ” he says. “ We’re all doing more with less.” Complicating matters further, according to Initiative Media’s Edwards, is that while the economy seems set to rebound, 2010 has some special exigencies. “2010 will be an election year and that brings a lot of competition for inventory. We also have the Commonwealth Games which brings more money into the market.” The combined effects of cautious spending and a market in which demand for advertising will be pushed higher by two key events will, she feels, make the scrutiny of media buying decisions sharper than ever before. “Regardless of the state of the economy, we are looking for accountability from media owners. As buyers we need to be able to show a quantifiable difference that this media channel has made on the brand attribute we are trying to change. We have to be able to prove it can change behaviour or raise awareness.” audit feature The global financial crisis has given marketers a shock. Digital media has added a new dimension to marketing. But while the past year has brought unusually rapid change, it has also re-enforced an important fact: advertisers want to be informed by objective and comprehensive data about media brands in order to reach their goals. Confidence and accountability “Without it [auditing] we wouldn’t know what is going on.” – S teve Allen MD Fusion Strategy “The economy has forced us to get closer to clients and provide even more advice. We’re all doing more with less.” – John Sintras CEO Starcom MediaVest Group p50-55 abc_cab.indd 50 8/12/09 2:52:20 PM
2009 - 2010
MT Resource Guide 2011