SYDNEY - While still mired in the global recession, marketing budgets are set to grow here by 2.1% over the next calendar year and media budgets could leap by 7.1%, according to a survey of Australia's top national advertisers by the Australian Association of National Advertisers.
The survey asked 48 national advertisers with a total marketing clout of $720 million about their current budgets and any changes in marketing mixes.
While total ad market growth here in 1993 has been stagnant at only 1.3% and media spending grew a measly 1.2%, the projected 7.1% leap in media spending in 1994 indicates that major marketers are returning to above-the-line efforts. The increase should come as marketers take advantage of stable or improving conditions to launch new brands and build existing ones.
More than half (55.3%) of those surveyed said that they planned to increase marketing budgets next year, while only 10.7% said they planned decreases. The remaining 34% said that they planned no changes in their budgets.
Despite the good news of more media money, major advertisers are enthusiastic about direct marketing, with 73% of respondents saying they have used direct marketing to build quick sales and 'customer loyalty' to build brands.
The survey also found that the number of marketers paying their agencies the traditional Australian commission fee of 7.5% on top of the 10% media commission is plummeting. Service fees below 7.5% are common, indicating that agencies are lowballing to grab up assignments and, generally, advertisers are moving away from fixed remuneration rates to more flexible compensation arrangements.
Tony Burrett is the editor of AdNews in Sydney.
Copyright Adweek L.P. (1993)