Corporates bank on ad splurge to sway consumers
The Australian 12:00am December 31, 2018
Nick Tabakoff
Bad press in the banking and energy areas has prompted some of the largest corporates in the two sectors to fight back through a massive increase in advertising, as they try to regain consumer trust.
Data for the year to the end of October shows the two sectors have recorded two of the largest rises in outlays, percentage-wise, on ad spending.
The Standard Media Index figures show that advertising by banks rose by $45.6 million to $299.2m for the first 10 months of the year, the largest rise in dollar terms of any sector. This came against the backdrop of the banking royal commission.
Westpac, Commonwealth and ANZ have continued to advertise strongly since the proceedings before former High Court judge Kenneth Hayne.
Similarly, utility companies, primarily electricity distributors, recorded by far the largest rise in advertising in percentage terms, jumping by $23.8m, or 49.1 per cent, to $72.3m across all media. The jump has come amid increasing government pressure on both electricity and gas suppliers to lower prices, following double-digit price rises on average in both markets over the past five years.
Many energy companies have been running frequent advertisements in recent months pushing higher discounts than they had previously offered, in an apparent bid to portray an image as consumer-friendly companies.
The third-highest rise in advertising in percentage terms also came from a category that has been affected by the banking royal commission: non-bank financial services. This category is also believed to have been influenced by the banking royal commission, which also exposed dubious practices in areas such as life insurance, financial advice and superannuation.
A further big growth area during the year was gambling advertising, yet another industry that has been the target of government regulation. Earlier this year, the federal government settled on a “siren-to-siren” ad ban until 8.30 at night.
Predictions of a collapse in advertising when the ban came in from April proved unfounded, with SMI figures showing that the value of betting ads grew by $33.4m, or 15.2 per cent, to $253.4m.
Industry sources say the rise has come because of a land grab by major betting companies, including Sportsbet and BetEasy (the rebadged merger of CrownBet and William Hill), which has significantly driven up prices for premium ad space.
SMI managing director Jane Ractliffe said it was the sheer scale of rises in advertising by both banks and energy companies that was most notable, describing it as “unprecedented”.
“Both the domestic banks and utilities categories are reporting the highest calendar year-to-date expenditure in advertising we have ever seen in 12 years of continuous data collection,” she said.
“Companies within these key product categories are being forced to project a more positive image to their consumers, and they are doing that by advertising their own positive messages.”
One advertising industry strategist, who did not wish to be named, pointed to two huge campaigns run by Westpac in the period as an insight into the financial giant’s bid to rise above anti-bank sentiment in the community.
One featured the David Bowie song Heroes and pointed to the Australian culture of helping mates; the other featured the Seekers song I’ll Never Find Another You and ended with the tagline: “We’re here to help.”
Commonwealth Bank has been looking for a halo effect from sports sponsorship, promoting its support of women’s cricket. ANZ is also looking to use sport to cut through to the Australian public.
The advertising strategist said the sector had long relied on the apathy of customers to maintain market share, but the royal commission had changed that.