5 April 2009
Small Window for Advertising to Help Pull Economy out of Recession
Marketers believe there is a small window of opportunity – perhaps as little as two months – for the advertising industry to positively impact Australia’s chances of avoiding a deep recession, according to the Australian Association of National Advertisers.
This is because lower interest rates have actually put more money in peoples’ pockets, but economic uncertainty and fear of job loss is killing off confidence.
At an AANA Marketers Forum in Sydney this week, attended by a dozen of Australia’s largest advertisers, participants said advertising can play a key role in building consumer confidence and restoring economic growth.
Unlike the recession of 1983, which was a period of high interest rates, this time around many of us have money to spend. Interest rates are at a 45-year low and prices are down on key items like automobiles and white goods. If advertisers can be encouraged to maintain or increase their ad spend, the stimulus on consumer demand could significantly reduce the local impact of global recession,” said Scott McClellan, CEO of the AANA.
The advertising, marketing and media industry and all the jobs it supports makes a $30 billion annual contribution to the economy, the equivalent of a private sector ‘stimulus package’ as inputs to the advertising, marketing and media industry flow through to rest of the economy.
“Companies are currently setting their marketing budgets for 2009-10. Current indications suggest many of those budgets will be reduced from current year levels, contributing to the economic slowdown.”
But there is a well-established link between advertising expenditure and economic growth. A 2003 study by the Boston Consulting Group in Germany found that advertising is particularly effective in stimulating competition in times of recession. By contrast, where advertising investment was weakest, economic growth was also poor.
“We think there is an opportunity to work with the Federal Government to encourage advertisers to maintain or increase ad spend to help fuel the economic recovery and we would welcome an opportunity to discuss the idea further.”
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For further information:
Scott McClellan, Chief Executive Officer, AANA, 02 9221 8088
Background Information
The Australian Association of National Advertisers (AANA) is the peak advertising industry body representing the rights and responsibilities of Australia’s major advertisers and their industry partners. Further information about the AANA is available from http://www.aana.com.au/
The AANA’s aim and objective is to promote and safeguard the advertising interests of its members and to ensure that ethical standards are upheld through the management of the industry’s self-regulation system, implemented today through the Advertising Standards Bureau (ASB) in Canberra. The industry self regulation system is created, reviewed and owned by the AANA.
The ASB administers a complaints process under a national system of advertising self-regulation through the Advertising Standards Board and the Advertising Claims Board. Both boards make their determinations about complaints under appropriate sections of the Advertiser Code of Ethics, and the Food & Beverages Advertising & Marketing Communications Code and the Advertising and Marketing to Children Code as prescribed by the AANA, by following principles laid down by the AANA in consultation with the advertising industry and other stakeholders. Further information about the ASB is available from http://www.adstandards.com.au/pages/index,asp
The ASB reports annually on the complaints it has received.? body copy