Aussie Advertising Industry Needs A Rethink

The Australian ad industry needs to rethink a few things in light of today’s state of play.

Doyen of the advertising industry, Harold Mitchell, AO and AC, was an avid contributor to the industry in many ways. This included talks to the industry and a regular column for the trade publication, Advertising News. He hasn’t written for that column since 2013, but recently asked the publishers if he could do another one.

His piece in the 03 October, 2014 issue of Ad News (page 14) was entitled “Wake up! You have to spend a dollar to earn a dollar”. The title is as the article’s preamble mentions is a take on the late Kerry Packer, which really just means you have to invest before you can reap.

The article is a swipe at Mitchell’s media buying colleagues. After all, he did own one of the largest media buying companies in the country, Mitchell and Partners, which he sold a few years ago for over $300 million.

In the article, he states the obvious that the industry is in a state of flux. In fact, the words he used were “under attack”. But, change is a constant in life and that doesn’t excuse the ad industry.

Mitchell writes “I started in advertising just three years after the start of television, which some thought would seed the end of radio. Many thought newspapers would continue forever….I started media buying business….we’d just seen the change to colour television and then later VCRs – which many thought would be the end of television. Along the way AM radio seemed under threat from FM radio but on each occasion, adjustment were made and life went on…”

He goes on, “I think I can handle change, in fact the only thing I’ve had that’s constant is change.” He mentions visiting MIT in Boston and seeing a “clever piece of digital work that was based around a modern-day dashboard of which there are many variations.” He discussed this discovery with his team and they politely told him that “we’ve been doing that for quite some years. In fact, that’s the real story….Australians are very good at what we do….by 2013, Australia with only 0.4% of the world’s population had 5% of the world’s advertising industry. Equal to that of France, which has three times our population. We had the highest per capita advertising spend in the world.”

Mitchell is positive about Australia. He says that “we can adjust and survive. If we don’t we’ll become the unlucky country run by second-rate people who share the country’s bad luck…Australia can adjust by reducing an overhang of costs at all levels and continue to be an economy of highly educated, innovative people, motivated and resourceful.”

A pull quote in the article notes: “Media spending is flat because confidence is down and we’ve been talking ourselves into oblivion.”

Mitchell recalls a recent dinner, where he sat beside Treasurer Joe Hockey and Philip Brass, a manufacturer and brilliant marketer who came up with “Computer Socks”, “No Nickers”, “Antz Pantz” and so on.

According to Mitchell, Brass tells him that “you have to reach customers with a product they believe in and a message that they can engage with.” Personally, I believe that this can be applied in both traditional and new media.

He makes more points and pushes for more positive thinking and appreciation of the talent and the necessary skills to beat the best advertising around the world.

Mitchell ends his column, with five simple points, which are worthy of note:

1. He suggests advising clients to increase ad budgets by just 5%. He posits that “you might be amazed how you can catch your competitor on the hop and get the market share increase you haven’t had.”

2. “Don’t give up on main media” (the traditional ones) which he believes are still as powerful as when Philip Brass built his brands.

3. “Strong promotion grows a market.” According to Mitchell, it gets people take out money from the bank and spend. And, sales should grow even if market share doesn’t move up much.

4. He makes an interesting point: “The most valuable advertising dollar ever spent is one that works when you’re not spending….building the continuing images of a brand….that’s always working.”

5. He suggests to make full use of the full range of media available.

On the last point, I’m sure he refers to the full gamut of the traditional and digital offering.

Mitchell has many interesting points which are worth considering, especially today when an uncertainty has made many marketers and advertisers very wary to spend. Again, I go back to Mitchell’s channeling of Kerry Packer admonishing his peers to invest so that they can reap.

Kudos to Mitchell for this article.

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