Predictions for the year ahead
The Australian Financial Review polled leaders about where the advertising and marketing landscape is heading, what they think the Australian economy will look like next year and how Covid-19 will continue to affect consumer behaviour.
AKQA’s Asia Pacific Managing Partner Brian Vella responded to the report, highlighting the key aspects that have and will continue to impact business into the future.
Where is the economy heading in 2022, and how will that affect ad spend?
The biggest shift we’ve noted is the general acceptance of e-commerce. Post Covid, there’s no longer any debate about the merits of online shopping or B2B services. It’s now accepted as obvious.
Economically there will be a bounce-back, which we’ve observed with our colleagues in Europe. The advertising industry will return strongly, followed by deeper investment in capital expenditure, particularly around owned channels.
The past two years have been incredibly challenging for some but the handbrakes are coming off. Clients are energised about new projects starting or restarting again.
How will advertising change in 2022 as Australia shifts to living with Covid-19?
E-commerce in Australia has quickly advanced to a point of maturity. Though up until now and even now there’s still a relatively limited focus on transactions and getting the basics right. As competition grows, successful commerce next year will be the byproduct of a great brand and customer experiences.
There are two shifts occurring: innovation and creativity online and direct to consumer, or what we refer to as direct to value.
Innovation and creativity – investment during the pandemic went into establishing foundations and/or just enabling businesses to keep doing business. Now, brands need to ensure that investment continues towards innovation in order to differentiate. It’s the start line, not the finish. The next race is differentiation and creativity in commerce.
Direct to value – the benefit of just having your brand online is now being eclipsed by the value in owning the experience and the data. More and more brands are looking to go direct. The desired position is to own the customer relationship and the data that goes with it especially with the cookieless future. Companies are searching for long-term, lifetime value now. Ultimately, from a focus on transaction and conversion which is also a byproduct of enterprise marketing technology to deeper customer engagement and loyalty inspiration and entertainment. And all this across broader, inter-connected brand ecosystems.
What can advertising do in 2022 to be more sustainable and help clients achieve carbon reduction targets?
Putting aside the obvious shift towards marketing with purpose and being environmentally minded, there are important actions that we can take on behalf of our clients. Crypto has rightly put a focus on energy associated with its production. While to a much lesser extent, this also raises questions about the assets we create online. For example, 1.6 billion trees are required to offset the pollution caused by global email spam and the unused data collected alone. Significant opportunity lies in reducing our digital carbon footprint by reconsidering the digital experiences we create. Agencies and clients can be measuring and monitoring the footprint of their owned media. This is within our control.
What is the big opportunity and challenge for the advertising industry in 2022?
Zig when others zag! Brands quite often want to undertake landscape reviews/copious benchmarking, leading to follower status and contributing to the sea of sameness. There are huge opportunities to differentiate if you work through the lens of your own brand. It’s time to be original again, especially online.
As the playing field around marketing technology continues to level, the biggest opportunities will come through genuine innovation. Brands that lean into that and are willing to truly explore, test and learn will win.
The biggest challenge remains talent. Hybrid ways of working. In-housing. What’s often overlooked with the in-house cycle is the broader environment required to retain and see talent thrive particularly in this climate. That’s where we’ll continue to focus to ensure we remain valued and valuable as long term partners to our clients.