Perspective - Australian advertising in 2023: Upheaval and transformation

By Joe Heath | 4 December 2023
Joe Heath.

The AdNews end of year Perspectives, looking back at 2023 and forward to next year.

2023 has been a game-changer for the advertising sector. We saw mighty mergers, a rising tide of independent agencies, sustainability stealing the spotlight, and transformative tech that shook the industry to its core. Let's dive in for a closer look.

Advertising fuels Australia's economic comeback

The proof's in the pudding: advertising's been a key driver in Australia's economic bounce-back. A Deloitte "Advertising Pays" report pegged the industry's contribution to the GDP at a hefty $53 billion, employing over 153,000 ad people. And with ad investments hitting $18 billion in 2022, we're outstripping many of the world's growth rates.

Continued consolidation reshapes the landscape

One of the biggest headlines was the seismic merger and loss of iconic agency brands JWT (Wunderman Thompson) and Y&R (VLM/Y&R), giving rise to a new agency, VML. This massive consolidation underscores the relentless transformation underway, and who knows, it may be just the first of many dominos to fall.

Indie agencies leave their mark

Meanwhile, plucky independents have been carving out their turf both here and overseas. The likes of Bear Meets Eagle on Fire and Special Group had their breakthrough moments, and shops like Howatson & Co and Akcelo are keeping the big guys on their toes. This rise of the indies looks set to stir up some healthy competition.

Bespoke agency-client models pop up

Linked to the rise of indies, we've also seen tailor-made partnerships between agencies and clients take shape, like Coles/Smith Street and Telstra/+61. These models are paving the way for more integrated, flexible ways of working. The big question remains: is this a stepping stone to in-house client agencies or a hybrid version that is here to stay?

Transformative technologies redefine everything

Generative AI crashed onto the scene, surprising everyone with its creative ability. Agencies are scrambling to get their teams up to speed on these tools. While we may be a few years away from AI coming up with the winner of the Cannes Lion Titanium, it will undoubtedly give the smaller indie agencies more capability and/or lead to clients looking to take even more jobs in-house.

Sustainability takes centre stage

And not to be outdone, sustainability finally went mainstream. Brands across sectors made bold pledges and upped ad spend promoting green initiatives - though not without facing tighter restrictions on potential greenwashing from the ACCC. Consumers demand authenticity and accountability. Agencies must help clients map credible paths to real impact, not just gestures.

So, what a year – between the big mergers, indie agency upstarts, disruptive tech, and the green wave, the only constant in advertising has been change, and at a pace that's been hard to keep up with. Staying ahead of the curve? That's just the name of the game.

Joe Heath – Head of Strategy, Saatchi & Saatchi Australia

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