Less than a fifth of Australian marketers see brand as their most important objective

19 July 2018 Consultancy.com.au

A strong brand creates a community, an emotional connection between company and customers. But marketers in Australia are failing to see the importance of brand building and are too focused on selling products or bumping up revenue. This, according to a new report by Deloitte Australia in collaboration with Facebook is damaging Australian businesses in the long run.

Australians are being shown more advertising today than at any other time in history, and it’s beginning to become overwhelming. Accordingly, for advertising to be affective it needs to create a connection between brand and consumer; a long standing connection, not a fleeting moment whilst being viewed.

If this is done successfully, then it will help businesses differentiate their products, create and maintain a reputation and build customer loyalty. However, according to a Deloitte report titled, ‘Shared Stories: Building Brand in the Digital Age’, businesses must understand the importance of communicating effectively in the changing digital environment to reap the benefits of successful marketing. 

Top marketing objectives for marketing professionals

When brand performance stagnates its value drops. Research presented by Deloitte in the report shows that on average a business whose brand stagnates will see their revenue fall by 13%. On the contrary, businesses that invest in their brand or actively build their brand can see their profits grow by up to 42%. “Stronger brands can generate increased profits, enable greater product differentiation, customer loyalty, talent attraction and even justify premium pricing.” 

With this in mind, building a brand is of vital importance to a business. The more valuable the brand, the more valuable the product will become. Yet, the Deloitte research team identified that businesses in Australia are more interested in selling their product than building their brand. 

Only 17% of those surveyed say that brand building is their top marketing objective, on par with increasing the marketing share of the business and surpassed by building customer engagement (18%) and increasing sales and revenue (23%). 

Active users of social media during a popular TV show

This alludes to businesses not understanding the true value of their brand and thus communicating ineffectively. To better distribute resources and make marketing count it is pertinent then that businesses grasp the shift in the marketing paradigm. 

The fundamentals of this is that consumers are not what they once were. TV viewership is rapidly declining, especially for the younger generation (25-34 year olds) who in the past year alone watched an average of 17% less than previously.  

Those who are watching TV are increasingly doing so whilst interacting on the internet, with the report putting the number of simultaneous TV and internet users at 77%. “To cut through, brands need to rethink the way they tell stories, and consider omni-channel approaches.” the report suggests. 

“Consumers are snacking on shorter and shorter content. Marketers need to be designing short, accessible content in the first instance, rather than designing for a 30 second slot and cutting it back,” says Publicis Media CEO Matt James in the report. 

Best channel for brand building

According to Deloitte, those businesses which engage with their community, build a rapport with their clients and do so with a focus on digital marketing can reap the rewards. Laid out in numbers, the respondents of the survey identified that businesses which spent above the average proportion of their marketing budget on social media out-performed those that did not. In real terms this equates to a higher revenue of 7% and an added revenue of $1.8 million for businesses in the Deloitte sample alone.

“The digital age has challenged marketing professionals to reassess how their brands are built and managed. Alongside this deeper change in brand ethos, there is plenty of supporting actions in marketing and communications strategies necessary to deliver success," the report concludes. 

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The top six strategic priorities of Australia's leaders in 2019

13 December 2018 Consultancy.com.au

Big Four firm KPMG recently polled over 220 of Australia’s C-suite leaders in the private and public sector to identify the top issues facing businesses in the nation. The top six strategic priorities that executives identified were digital transformation, innovation and disruption, regulation, political paralysis, customer centricity, and cost competitiveness.

Unsurprisingly, digital transformation was the number one issue identified by Aussie execs in the survey conducted by KPMG Acuity – the firm’s insights arm. “Just about every CEO has ‘digital transformation’ at top of mind but it can mean different things,” commented Ian Hancock, KPMG National Managing Partner, Management Consulting. “In 2018, the term ‘digital transformation’ means so many things there is a very real risk that this lack of clarity is causing confusion, leading to diverse agendas and ultimately missed opportunities.”

KPMG relates that digital transformation includes not only investment in digital technologies, but also the evolution of organizational functions, back office tech, and even the re-thinking of core business models. Complete transformations should also include cultural realignment, according to the firm.

Centrally, digital transformations need to be ‘connection-based.’ That means staying connected to market dynamics and digital trends, connecting front, middle, and back offices to execute growth agendas, and connecting with customers and employees on a compelling value proposition.

“[CEOs] know they are being measured on their ability to deliver against a transformation agenda,” Hancock added.

Top six issues facing Australian C-suite

The next-most pressing issue for Australian leaders was innovation and disruption. It’s a constant worry for business leaders that competitors will use new technologies and methods to deliver products or services that better, cheaper, and more appealing to consumers. Compounding that fear is the pattern that disruption creates a winner-takes-all environment where only a few firms see spectacular growth on the back of their innovation in an industry – like Amazon, Google, and Uber – while curb-stomping the remaining industry players.

The authors caution against trying to disrupt for disruption’s sake, however. “In 2019 a response cannot be as simple as rushing headlong into big new innovative tech and organisational practice,” said James Mabbott, Head of KPMG Innovate. “That’s because the population has developed a general sense of scepticism about whether the benefits of ‘innovation’ and ‘disruption’ are really for them, or rather for a small elite who can generate an outsize payoff. So any business leader looking to prosecute an aggressive innovation agenda will likely be met by stakeholders wary about what this actually means for them, including employees.”

Third place was taken by concerns over regulation – including the challenges of aligning business regulation, cutting red tape, and the capabilities of the nation’s regulators. Leaders are also concerned about new regulation around mortgages, credit cards, and insurance contracts arising from the potential extension of the Banking Executive Accountability Regime (BEAR). Even outside of financial services, leaders are increasingly concerned about over-regulation.

“While we don’t wish to see needlessly bureaucratic demands on business, there is a danger of seeing new regulation as purely negative,” remarked KPMG Law Partner Astrid Raetze. “Reporting can be a strong discipline to get things done, so we would urge businesses not to take their eyes off the ball and get into a defensive mindset if additional regulations are introduced in their sectors, or generally in 2019.”

Political paralysis was the fourth-most worrying issue. Business leaders were critical of the ongoing political log jam in the federal government, lacking confidence that the nation’s major parties could work together effectively to pass national agenda items.

“Business leaders are concerned with growing political polarisation and the difficulty of gaining support for complex reforms,” said Grant Wardell-Johnson, KPMG Partner, Geopolitics and Tax. “This is perceived to hang over many other issues we face and have a long term detriment for Australia. In a world where we should be less ideological and more evidence and scientifically based in our public policy processes, the opposite seems to be occurring. This leads to less bipartisanship. Now more than ever we need full, frank, and fearless advice from senior public servants.”

In fifth place was customer centricity. Leaders increasingly understand that they have to put the customer first and place it at the core of their strategy – as Amazon has done to wide-ranging success.

“Successful outcomes put the customer at the centre and respond to a human need,” commented Paul Howes, KPMG Partner-in-Charge, Customer, Brand & Marketing Advisory. “Customers talk about outcomes, not necessarily service delivery models.” That means using digital transformations as an enabler to better serve customers, rather than having new technology as the goal itself.

Companies like Amazon that get it right combine digital and customer service facets to create a strong whole. “These companies understand they need to have engaged, helpful people delivering outstanding service. That these people need to be working in alignment with a great digital experience. And that it is this combination that drives loyalty, advocacy, and commercial performance,” added Howes.

Number six on the list of top C-suite concerns was cost competitiveness. The C-suite identified rising costs of energy, raw material, taxes, and even labour – despite the notably stagnant real wages of workers in a low unemployment environment.

KPMG Chief Economist Bredan Rynne weighed in: “Analysis by KPMG Economics has shown we suffer from poor labour cost competitiveness, particularly in the manufacturing sector, where labour costs typically represent between 40% - 60% of the cost base.”

And though wages have stagnated in Australia, they’ve also floundered in the rest of the world, meaning that the country’s labour has seen no increase in cost competitiveness. Meanwhile, Aussie business leaders wouldn’t mind seeing the lower corporate tax rates being brought in across the globe. “While corporate rates are falling in some countries (though not all), in Australia this has seemingly been kicked into the political long grass. This clearly acts as another cost burden to Australian businesses,” Rynne added.

Rounding out the top ten concerns were public trust, cybersecurity & data privacy, big data, and infrastructure and liveable cities.