The Australian economy has grown year on year since 1992 until the pandemic hit in 2020. After that, many economies around the world have recovered, but the Australian economy is still struggling. 2024 marked the slowest growth rate in 32 years, with the gross domestic product (GDP) growing by only 0.8% year-on-year in the first three quarters of 2024. When you compare that to the 3.1% growth in the US and add the high inflation rates over the last three years, it’s understandable that businesses have had to cut their marketing budgets.
The shrinking budget has led most businesses to adapt and modernize their marketing techniques to ensure continued business growth during these challenging times. For expert opinion on this, we sat down with Oskar Bogatinovski from AWISEE, one of Europe and Australia’s leading performance-driven marketing agencies.
The State of Marketing in Australia
The economic slowdown has been driven by inflation, rising operational costs, and shifting consumer priorities.
According to AWISEE.com Head of Partnerships Oskar, “The biggest challenge right now is finding a way that your business can use a smaller budget but still maintain brand presence. You can’t just stop marketing, but you also can’t afford to spend the way you used to.”
Due to budget constraints, many companies are now turning to digital strategies as they are more friendly to the pocket. However, it’s not just about the cost as businesses are also realizing the power that these platforms hold, especially with the younger generations.
“Digital marketing was mostly used by smaller businesses, but we’ve seen a big change in the last five years. Businesses that mostly relied on the traditional media have now started adopting performance marketing, which is basically a strategy that ensures every dollar you spent is justified by measurable outcomes.”
“This has meant that marketing agencies like us have had to invest heavily in analytics tools, and we’ve also had to fine-tune our digital marketing strategies. Every client now wants proof that their campaigns are resulting in conversions, so we have to demonstrate that to them,” says Oskar.
It’s no longer a matter of creating awareness but relying on personalized marketing and interactive content as it’s more effective at translating marketing into revenue.
How Businesses Are Responding
A reduced budget for something as crucial for businesses as marketing means that you now need to be creative. AWISEE has observed multiple ways in which businesses maintain visibility and customer engagement.
According to Oskar, one of these is moving away from extensive campaigns. Traditional ad placements are now becoming less popular as businesses are putting more focus on content marketing, SEO, and social media engagement.
“Ads have always taken the largest share of the marketing budget for most companies, but we’ve seen clients significantly reduce their spending on this. They are now investing more in building a strong organic presence,” says AWISEE’s Partnerships manager. “The focus is more on blog content, email marketing, and social media as these are able to nurture customer relationships over time, which is more visionary than immediate conversions that ads provide.”
Another key shift has been in the increased reliance on marketing automation. “Automation is also playing a key role in marketing as you can use tools that reduce the size of the marketing team you need. If email campaigns, social media scheduling, and customer segmentation can be done automatically, why not go that route?” he adds.
Of course, this has partly been influenced by the fact that customer behaviour has significantly shifted over the last 10 years. A good example is how some customers look for brands that align with their personal values, such as a minimal carbon footprint.
Influencer Marketing’s Role Amid Budget Cuts
Instead of pushing ads on media stations, lots of businesses are now partnering with influencers. The whole idea of marketing is to reach out, and social media influencers receive thousands or millions of views daily. On top of that, using this channel gives users a personalized feel at a friendly budget.
“We’ve moved from traditional media to social influence, and this strategy is quite effective as people resonate with brands supported by a person they already know on TikTok, YouTube, LinkedIn or Instagram,” says Oskar.
“And one big benefit for businesses is that they can actually target a specific audience. If you are a fashion designer or sell beauty products, partnering with a lifestyle creator will end up in an effective campaign. It doesn’t even have to be the big influencers as the smaller ones are still influential and their costs far more manageable.”
Oskar notes that of all social media platforms, TikTok has been quite the game-changer for their clients. “The biggest power of TikTok is that content is marketed by creators, and since they are short videos, the content feels a bit more genuine and watchable. Companies also don’t need to spend much on production, so it’s a win for all involved.”
Key Takeaways
Based on the insightful interview, below are some of our key takeaways for Australian businesses.
- The economic situation and lifestyle changes have brought a huge shift in marketing, from traditional marketing campaigns to digital ones.
- Campaigns are no longer just about outreach, as businesses now focus more on performance.
- Businesses are maximizing marketing by relying on organic content, influencer collaborations, and automation.
- Digital platforms like TikTok, Instagram, Twitter, and LinkedIn have become quite crucial in ensuring business growth in tough economic times.
- Authenticity and using a value-driven marketing approach is key in reaching out to the younger generation of consumers.
These show that all businesses need to adapt not just because of the economic shifts, but to reach the consumers where they are – online.
Closing Thoughts
We are in times where the economy is constantly evolving, so every business needs to be adaptive and innovative in how it reaches out to consumers. Digital media has become the go-to strategy as it focuses more on authenticity and engagement. This is not only cost-effective but ensures continued growth.
As AWISEE’s Partnership’s manager sums it up, “Marketing isn’t just about spending more to become visible, but about spending in a smart way. The businesses that adapt to the economic challenges and lifestyle changes will be the ones that enjoy the most growth in times of economic shifts.”
