Ben McCallum.
Many breathed a sigh of relief when Michelle Bullock confirmed the long-anticipated rate cut following February’s RBA meeting. It prompted me to reflect on an article I wrote in September 2022, during a time of economic uncertainty and mounting challenges. As I revisited it, I couldn’t help but consider how much of it still rings true three years later.
Back in 2022, the cash rate stood at 2.35%, steadily climbing with predictions of reaching 4%. Indeed, this forecast materialised, and as we now know, it didn’t stop there, peaking at 4.35%. This left millions of Australian homeowners under immense financial strain, struggling to balance their budgets.
In December 2022, CPI peaked at 7.8%, since falling to 2.4%, while underlying inflation (Trimmed Mean Inflation) hit a high of 6.9%, now sitting at 3.2%. Still slightly above the RBA’s preferred 2-3% range, current forecasts suggest inflation will hit 2.7% by June this year.
Consumer confidence, which was rapidly declining in 2022, is expected to surpass the 100-point mark by the end of 2025. This would mark the first time since February 2022 that consumer sentiment has shown such a positive shift, signalling that recovery is underway.
Fast forward to today, and the welcome news of the first rate cut since November 2020. The question now is whether any future cuts will be passed on in full, only time will tell.
So, what’s next? Will the RBA remain cautious, or will we see one or two more rate cuts in 2025? Most will agree, the future remains uncertain.
What has become abundantly clear over the past three years is the significant shift in how brands approach growth. The importance of digital transformation and data-driven decision-making has only accelerated. Many brands have leaned into the opportunities offered by digital channels, focusing on effectiveness. Companies like Mutinex, for example, are leading the charge, already working with some of the most prominent brands in Australia and globally. Having witnessed this transformation firsthand, I can attest to the seismic changes it is bringing to the industry and the barriers it is breaking down, enabling a truly optimised, ROI-driven approach based on reliable, accurate data.
Another important development is the fact that many brands have had to navigate reduced budgets, a reality that experienced marketers know too well can be detrimental. When budgets are cut, marketing is often the first area to face scrutiny. However, those brands that have continued investing in customer engagement, whether through martech, targeted advertising, or enhancing the customer experience, have found themselves positioned ahead of the competition. The brands that resisted cutting back during downturns are now reaping the long-term rewards of those decisions.
Agility has become more critical than ever. With the rise of AI and automation in marketing, brands can now adapt to changing consumer behaviours at an unprecedented speed. This capability allows for rapid iterations and adjustments. At the same time, having a clear strategic direction is crucial. In times of uncertainty, brands that have well-defined plans are better equipped to adapt and maintain a competitive edge. Simplifying complexity is now paramount. With an overwhelming number of platforms, tools, and channels, brands risk drowning in options. However, those that can cut through the noise and stay focused can seize a valuable competitive advantage.
At UM, we've been working to address this challenge by embracing our “Full Colour Media” approach. By blending human creativity, critical thinking, and insights with AI, data, and technology, we create powerful, nuanced connections that drive sustainable brand growth. While data is critical, it’s the interpretation and creative balance that truly make the difference.
The future is looking brighter as inflation is forecasted to stabilise, with potential rate cuts likely to boost consumer confidence and improve spending patterns. Brands that have embraced digital transformation, data analytics, and personalised customer engagement are well-positioned to thrive.
To stand out in an increasingly fragmented media landscape, brands must balance creativity with data, cutting through the noise.
By simplifying complexity and focusing on human insight, brands can avoid becoming generic, fostering deeper, more meaningful connections with their audiences and driving sustained growth.
Ben McCallum, Managing Director, UM Sydney