Marketing budgets holding back local digital industry

Marketers' reluctance to invest their budgets in mobile and digital have held the Australian industry back at international award shows, according to leading agency bosses.

Earlier this year, the local industry failed to score even a finalist in the Cannes Lions Cyber category, leading to questions over whether the Australian digital contingent was up to scratch against its international counterparts. Australia also failed to walk away with any Lions in the Mobile category despite having two entries shortlisted.

While it was suggested by some in the wider ad industry that local digital shops weren’t generating the barrier-breaking ideas that take home metal, digital gurus have suggested another reason why we’re not competitive, with digital budgets squarely in the firing line.

Tim O’Neill, joint managing director at independent agency Reactive, told AdNews: “I don’t think the budget constrains the idea. Our thinking is just as strong [as overseas agencies]. It’s production budgets that limit the realisation of the idea. If you're working with $200,000 you can't commission film or 3D animation so you're restrained in how you execute the idea."
O’Neill said Cannes winners tended to be highly produced pieces of work with lots of money, time and resources invested. He said budgets at Reactive’s overseas offices in New York and London were much more generous, but coceded the smaller population in Australia meant marketing budgets across the board were smaller and digital was getting a comparable piece of the overall pie compared to other markets.

VML managing director Aden Hepburn agreed smaller budgets meant less flashier production values. “We still have to be robust and we’re still expected to build world-class campaigns which can put the pressure on,” he said. "However, it means we have to work faster, be smarter and focus more on innovation because we still need to get consumers engaged with the budgets we get."

Deepend chief executive Matt Griffin said a trend in the industry had seen investment shift from purely marketing projects to digital infrastructure. “A lot of the traditional, digital spend is being absorbed into larger infrastructure projects, e-commerce and platform developments that bring real, long-term value to business taking budgets away from smaller-scale ‘throwaway’ advertising executions," he said.

Griffin said because of the uncertain economic environment, clients were rationalising their spend. He believed the bigger creative ideas would get more traction elsewhere in the world due to Australia’s small population, particularly as multinational brands were more likely to consolidate their investment near where they are headquartered.

“[But] there’s no question Australia is creative,” he said. “In fact, we attract talent from overseas.”

This article first appeared in the 21 September 2012 edition of AdNews, in print and on iPad. Click here to subscribe for more news, features and opinion.

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