New research from global data insights and consulting company Kantar has revealed a growing focus on performance marketing and sales promotions among Australian marketers, due to its perceived ease of communicating returns, driving short-term returns, and cost-effectiveness.

The study, titled 'Destination: Marketing Effectiveness', revealed 47% of marketers find it easier to communicate the returns of performance marketing, 42% believe it drives more short-term returns than brand marketing, and 31% find it more cost-effective. The research also indicates that 38% of marketers feel pressure from the C-suite to achieve targets.

The study also shows that while 75% of high performers consider marketing to be a strategic partner in driving business growth, compared to just 48% of lagging businesses, marketing effectiveness is not always well defined or measured. This suggests a gap in understanding and measuring the true impact of marketing efforts on business growth.

The report also reveals that Australia trails the global average in terms of marketing's strategic role in business growth. While the global average for leaders stands at 84%, Australia lags behind. Leading businesses in Australia are deeply consumer-centric, clear on their positioning and portfolio, and defend their differentiation and salience. These businesses have measurement systems in place to provide proof points to build trust with senior leadership and incorporate brand in measurement to represent the entirety of what marketing contributes to sales.

However, the study also highlights a significant drop in the number of Australian brands considered to be highly 'Meaningfully Different'. Over the past decade, this number has dropped by 51%. Kantar's global data shows that brands grow by being 'Meaningfully Different' to more people, with strong brand equity driving four times more value share. Yet, the economic squeeze continues to impact all organisations, with one-third of Australian organisations cutting marketing budgets, even as 57% say their business has been affected by current economic conditions.

“But the biggest difference is that they prioritise marketing in any economic environment as an investment not a cost," said Managing Partner for Consulting at Kantar in Australia, Mark Kennedy. “Marketing is at an inflection point in an era of unprecedented change and must evolve to meet the needs of today and tomorrow by reframing its critical role in an organisation."

Chief Commercial Officer for Kantar in Australia, Jonathan Sinton, said: “Times remain tough – from cash flow to confidence – and what hasn’t subsided since the start of the pandemic is the economic conditions in which we continue to operate. Some of the key challenges that continue to impact marketers are the need for instant results resulting in a continual move to short-termism, tightening marketing budgets that mean being brave and experimental is becoming riskier, and a subsequent lack of investment in brand building resulting in a sea of sameness. We may be at significant crossroads, but the opportunity is ripe to build a strong foundation – key to both short- and long-term sustainable growth.”

Kennedy added: “Overall, leading Australian organisations are less impacted by the economy and are seeing marketing budgets increase despite resourcing being compromised."