Australia and New Zealand are well-known as leaders in digital.  

Companies such as Atlassian, Xero, Canva, and Vend are often included in the list of the world's hottest online startups.

But how does this leadership carry over into marketing? Are companies in Australia and New Zealand also reallocating their media spend to digital?

To find out, Econsultancy and Datalicious recently surveyed global marketers about whether ad spending is changing in line with people's evolving media habits.

That is, are marketers changing how they allocate budgets as consumers change, or do old habits die hard?

Findings from the survey are now available in an Econsultancy report, the Media Budgets Index.

The report

The Media Budgets Index analyses data from five markets from across the globe on this and other topics, offering specific insights for each region covered.

Subscribers can download the report and there will be two webinars to discuss the contents of the report, one for the UK and another for the APAC region:

Below is an overview of a few of the interesting trends from marketers in Australia and New Zealand.

Media spend vs. time online

The survey revealed that Australia and New Zealand consumers spend 64.2% of their time with offline media and marketers allocate 58.7% of their ad budget to it

This indicates that there is actually a 5.5% underspend on offline media in the region. 

For digital, there is an equivalent (5.5%) overspend. 41.3% of budget is spent on digital marketing and consumers spend 35.8% of their time on various digital platforms.

Just as a comparison, the US has a similar underspend on offline media (-3%) but the UK has the opposite issue with an 11% overspend on offline.

Marketers in Australia and New Zealand, therefore, seem to allocate spending largely in line with time spent on the media.

TV still dominates, paid search comes second

Interestingly TV still dominates in Australia and New Zealand, though. Nearly one-third of marketing budgets (31.2%) is spent on TV which gives it the largest budget portion of any media.

Paid search is a strong second, though, commanding 20.2% of marketers budget in the region on average.

This means that TV and paid search make up more than half (53.4%) of media spend in the region.

This amount is more than the combined TV and paid search budget percentages in the other regions. In the UK TV and paid search makes up 42% of media spend, in the US it's 41%, and in Singapore it's only 30%.

Why is this?

Barnaby Dawe, Global CMO of Just Eat, the publicly-listed global food delivery platform, has an interesting perspective on how these two channels are related.

[In Australia] TV is a blunt instrument used for air cover that drives search.

Marketers in the region, it seems, feel that the combination of paid search and TV is a powerful way to both reach consumers and encourage action.

Things are changing

According to the report, however, TV's top spot may be under threat.

Digital seeing an increase in spending

Though 25% of marketers in Australia and New Zealand indicated that they will increase spending on TV in the coming year, 19% said that they will decrease spending on TV this year.

For paid search, a third (33%) of marketers in the region plan on increasing investment in 2016 whereas only 6% are looking to decrease spending in paid search this year.

James Woodbridge, General Manager Marketing at Antares Restaurant Group (Burger King New Zealand) commented on this in the report:

Unfortunately, we still need to be on TV, but we are paying too much for it. TV is a great example of diminishing returns for advertisers.

TV is not seen as 'very effective'

TV also lags in effectiveness, according to marketers in the region.

When asked to rate effectiveness of both online and offline media for reaching audience, 45% said that paid search was 'very effective' whereas only 6% in the region said the same about TV.

Fragmentation, too

Nick Adams, Director of Marketing Enablement at Telstra believes there is a trend away from TV advertising as well.

Australia is seeing a decline in TV and eyeballs are going different places. Fragmentation means we have to follow the consumer and where they’re spending their discretionary time... we will look at spend as a result.

Attribution modelling

Nearly two in five (39%) of marketers from Australia and New Zealand indicated that they use attribution to measure marketing effectiveness.

Of the remaining respondents, 28% said that they don't use attribution and 33% said that they were either unsure or it wasn't relevant to their marketing.

Marketers from Australia and New Zealand are behind respondents from Asia, therefore, where 61% use attribution and the global average of 44%.

Attribution, however, is still top of mind for many marketers in the region as a way to justify spending.  

Matt Taylor, CMO at HelloFresh Australia had the following to say on the topic:

Pressure comes from all areas of the business. Like any company, there are only finite resources, and I need to justify my budgets continually, otherwise it will be allocated elsewhere.

Christan Bartens, CEO and Founder of Datalicious adds:

TV remains important because it’s an effective way to help build brand at scale, but there’s a chance that companies are not attributing the role other channels have in reinforcing the brand message and driving conversions.

Leading digital

So, it seems that marketers in Australia and New Zealand are living up to their reputation as leaders in digital marketing.

In fact, according to the survey, marketers in the region may actually be overspending on digital at the moment.

Additionally, even though TV is still the largest portion of the marketing budget overall, respondents indicate that paid search is much more likely to be considered 'very effective' than TV is.

Finally, though the region may lag behind others in the use of attribution, marketers seem to have a good understanding that consumers are spending more time on digital and allocating their budget accordingly.

Jean Thomas from Vinomofo sums it up quite well:

We are working on a more holistic approach where we are spending money on both traditional and digital.

Go to Facebook and see an ad; sit on a train and see an ad; visit the office and get an email from us – it’s an approach that is catching the consumer’s eye wherever they go.

Jeff Rajeck

Published 17 June, 2016 by Jeff Rajeck

Jeff Rajeck is the APAC Research Analyst for Econsultancy . You can follow him on Twitter or connect via LinkedIn.  

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