Talkback: Spending 'out of whack' with consumer

A tidal wave of change is sweeping through the world of media. At last week's Marketing Today conference, there was a common theme to messages delivered by some of the Southern Hemisphere's leading marketing gurus. Marketing directors, agency heads and researchers are all forecasting a paradigm shift in media spending.

Tim Pethick, who built a $20 million, Australia-based fresh fruit drink company in a little over two years, highlighted the fact that consumers are getting bored with advertising. In the recent Yankelovich Partners' study for the American Association of Advertisers, 65 per cent of those surveyed thought they were being bombarded with too much advertising. And in the 2003 Eye on Australia, 81 per cent said they were taking less notice of advertising, with two-thirds saying it was boring and repetitive.

Closer to home, two recent pieces of consumer research have made it clear that marketers are out of whack with their customers in the way they try to deliver their marketing messages. In the September-October issue of DLB magazine, Research Solutions' Debra Hall reports that while newspaper advertising is the most appealing medium to the public, unaddressed letterbox advertising - yes, "junk mail" - is one of the most preferred media.

Colmar Brunton was recently commissioned to carry out a major consumer media preference investigation. The full details of this important survey will surprise many people when they are released in the next few weeks. The results, which are still under embargo, will cause many New Zealand marketers and their agencies to re-examine their media spending.

It won't surprise you to find that consumers think television is the best medium for brand advertising or that direct mail is the favourite for customer retention. But would you believe that unaddressed mail vies with TV as the most-preferred medium for customer acquisition?

Tim Deane, Tourism NZ's marketing general manager,, highlighted the importance of the internet as well as PR and viral marketing to the travel industry. But his strongest message was to ensure that every communication is measured for effectiveness by "constant testing and refinement".

Mat Baxter, head of one of Sydney's hottest agencies, Naked Communications, graphically highlighted the paradigm shift by illustrating how four global brands - Procter & Gamble, McDonald's, Coca-Cola and Nike - have dramatically reduced their television spending (see table).

When Jim Stengel - last week voted grand marketer of the year by US magazine Brandweek - took over as Procter & Gamble marketing chief five years ago, its market share had slipped 10 per cent in the previous decade and its reputation for marketing innovation had all but disappeared.

Stengel decided P&G's marketing model was broken, saying: "We assume she's watching television; we assume she's paying attention to our ads; we assume that if we do the same thing we've been doing for the last 20 years it will work. Well, that model is broken and gone forever."

This has been corroborated by Ken Harris, of Cannondale Associates, a leading US marketing consultancy, who says: "The shift is very real. P&G will spend media dollars only where there is demonstrable return on investment."

And the results? Last year, P&G's sales jumped more than 10 per cent and earnings 12 per cent.

If you are a professional marketer, you should be constantly examining how and where you spend your marketing dollar, otherwise you could also watch 10 per cent market share disappear.

* Keith Norris is chief executive of the Marketing Association, representing more than 4000 marketing professionals.