Australia – Australian marketers recognise the value of brand in marketing but are increasingly focused on performance marketing and sales promotions, especially in tough economic times, according to new Kantar research.
The report found that the shift toward performance marketing is driven by marketers’ ease in communicating returns (47%), its ability to deliver short-term gains over brand marketing (42%), pressure from the C-Suite to meet targets (38%), and its perceived cost-effectiveness (31%).
Kantar’s report highlights key traits distinguishing leading Australian organisations from their lagging counterparts. While 75% of high-performing businesses view marketing as a strategic partner in driving growth, only 48% of lagging companies share this perspective. However, the report also reveals that marketing effectiveness is often poorly defined and measured, with Australia lagging behind the global average of 84% for leaders.
According to Kantar, leading Australian businesses prioritise consumer centricity across all functions, maintain clarity in their positioning and portfolio, and effectively defend their differentiation and relevance. They implement robust measurement systems that provide evidence to build trust with senior leadership and crucially include brand metrics to reflect the full impact of marketing on sales. Furthermore, these organisations focus on optimising execution rather than merely testing strategies.
“But the biggest difference is that they prioritise marketing in any economic environment as an investment, not a cost. This prompts the need for marketing functions to ensure that they are speaking the same language as their financial decision-makers. Marketing needs more credibility to be seen as a growth engine. This requires honest conversations about what is and isn’t working (tactics, measurement) and transparency to allow other departments (finance) to verify effectiveness,” says Mark Kennedy, managing partner for consulting at Kantar in Australia.
“There is indisputable evidence that unbalanced brands struggle in the long term. Global Kantar studies show that if brands consistently favour performance marketing, baseline sales will erode, and this is leading to a decline in brand equity in Australia. Kantar BrandZ global data shows that brands grow by being ‘Meaningfully Different’ to more people with strong brand equity driving four times more value share, yet the number of Australian brands considered to be highly ‘Meaningfully Different’ has dropped 51 percent in the last decade.”
“Marketing is at an inflection point in an era of unprecedented change and must evolve to meet the needs of today and tomorrow by reframing its critical role in an organisation,” Kennedy further explained.
He added, “Marketing must become much more deliberate about its commercial value and how this is interlinked and communicated throughout the business. Marketing must have proper conversations with the CFO, and to do this, the language of marketing needs to change. Reframing its commercial focus will go a long way to ensure that marketing can reclaim its rightful place at the board table and partner with the C-Suite to drive overall performance—in both the short- and long-term.”
The report also reveals that organisations with high levels of trust in marketing tend to perform better. However, a significant capability gap in measuring and demonstrating effectiveness is undermining confidence in the marketing function, particularly as economic pressures persist.
Jonathan Sinton, chief commercial officer for Kantar in Australia, explained, “While some marketing effectiveness opportunities are enduring, such as establishing the commercial credibility of marketing within an organisation, others are newly emerging, such as the impact of artificial intelligence on content creation, media buying, and measurement. All of this combines into a paradox where there is a heightened focus on effectiveness, alongside diminishing confidence in how to achieve it.”
Notably, only one-third of Australian organisations have cut marketing budgets, even though 57% report being affected by current economic conditions. Ultimately, the focus on capability rather than budget cuts is impacting resource allocation and effectiveness measurement.
“Times remain tough—from cash flow to confidence—and what hasn’t subsided since the start of the pandemic is the economic conditions in which we continue to operate. Some of the key challenges that continue to impact marketers are the need for instant results resulting in a continual move to short-termism, tightening marketing budgets that mean being brave and experimental is becoming riskier, and a subsequent lack of investment in brand building resulting in a sea of sameness. We may be at significant crossroads, but the opportunity is ripe to build a strong foundation—key to both short- and long-term sustainable growth,” he continued.
“Overall, leading Australian organisations are less impacted by the economy and are seeing marketing budgets increase despite resourcing being compromised. They are also more holistic in their approach, and the C-Suite does see marketing as a strategic business partner. Overwhelmingly, they are in it for the long term. There is a lot to learn from those who have their marketing effectiveness roadmap aligned with their entire organisation—those with a holistic focus on organisational performance are set up for success,” Sinton concluded.
