Australian/NZ Advertising Effectiveness Rules: Winning or Losing in a Recession ~ Robert Brittain and Peter Field launch new study

Advertising effectiveness luminaries Robert Brittain and Peter Field have unveiled their major new report, Australian/New Zealand Advertising Effectiveness Rules: Winning or Losing in a Recession via a special webinar on Thursday evening, attended by more than 1,000 advertisers, marketers and agency executives from New Zealand, Australia and internationally.

The report, published by The Communications Council in collaboration with the Commercial Communications Council NZ and supporting partner LinkedIn Marketing Solutions, is the first study to look at the impact of COVID-19 and the impending recession on brands and marketers on both sides of the Tasman, and to provide recommendations on how they can make the most of the economic downturn.

Key findings and recommendations in the report include:

● Recessions have always been times when the smart take advantage and the others are left to weaken;

● Marketers should not abandon spending on advertising during the recession;

● If an advertiser has a campaign in market that is working, then stick with it;

● Advertising is a powerful lever, and whilst it does have a modest negative short-term impact on business profitability during recession, evidence shows it enables brands to emerge in a stronger state with significantly faster profit recovery;

● Marketers in New Zealand and Australia are showing signs of panic and not viewing the recession as an opportunity to grow their brands and businesses;

● There is plenty of learning about best practice we can draw on, but little evidence that we are doing so;

● Previous downturns, or even just threats of downturns, have all been signals for NZ and Australian marketers to withdraw brand investment permanently;

● Advertising investment in New Zealand and Australia has not tracked GDP and the step changes down at each crisis have taken longer than the UK and US to rebuild;

Introducing the report, Rob Brittain (above left) said: “Reducing advertising investment during recessions is nothing new, but what makes New Zealand and Australia different from other advanced economies, such as the US and UK, is that the lost investment is not recovered once the economy moves back into expansion. This leaves our brands in a permanently weaker state.

“In this new study, we demonstrate that this is a flawed approach. Abandoning marketing and effectively ‘going dark’ is a strategy that at best will make it much harder for brands to recover post-recession.”

He said that the lack of commitment to advertising spend in New Zealand and Australia has implications for the economy as a whole: “Productivity of the economy declines during a recession and the reversal of this is a key driver in returning to growth. The role advertising plays is in creating consumer demand for brands – as demand grows it stimulates firms to improve their individual competitiveness through innovation and investment, the result is in an increase in productivity.

“Compared to many advanced economies, New Zealand and Australia are well-placed to bounce back, having been effective in containing the virus and implementing policies that have underpinned employment and provided direct support to sectors under most pressure.

“Advertising needs to play its role in leading that return to growth across B2B and B2C sectors,” Rob said.

Peter Field (above right) commented that ‘savage’ forecast marketing budget cuts in New Zealand and Australia showed a knee-jerk response that was ‘easy but destructive’: “In some ways New Zealand and Australian marketers should be able to challenge these knee-jerk responses more confidently than their counterparts elsewhere, thanks to sound low-debt economies and more effective management of the Coronavirus. Yet their response so far in this recession – and in previous recessions – appears to have been considerably weaker.

“Arguing against cuts is something that takes guts for marketers but doing so will result in far stronger and more successful brands post-recession.

“The gains you can make in a recession eclipse anything you could achieve in normal times: it is a time of opportunity for businesses that can find the resources.”

Commercial Communications Council CEO Paul Head said the release of the new report could not be more timely, and thanked the authors for such significant work: “It is with great pride that we publish Winning or Losing in a Recession, a body of outstanding work from Rob and Peter that follows last year’s publication of their ground-breaking first look at the Australian Effies database Advertising Effectiveness Rules.”

“This new report should be a wake-up call for New Zealand and Australian marketers. The evidence is very clear that marketing has a responsibility to both their brands and business to be leaders as advertising plays such an important role in recovering from a recession. Yet, it appears there are only a small number of marketers that are viewing the looming recession as an opportunity and employing best-practice strategies.”

“We’d also like to thank The Communications Council Australia for its collaboration on the report, and give a warm and very appreciative welcome to the report’s supporting partner LinkedIn Marketing Solutions.”

Says Prue Cox, director of marketing solutions ANZ LinkedIn: “We’re delighted to come on board as supporting partner for this ‘must-read’ report for marketers across Australia and New Zealand. The marketing and advertising sector is a critical pillar for economic sustainability across ANZ and this research provides actionable strategies for marketing professionals on how to navigate this downturn and protect their brands for long term success.”

The full report will be available for download from 5.30pm AEST Thursday 18 June. Download by clicking this link: AuNZ Advertising Effectiveness Rules: Winning or Losing in a Recession