Q&A: The factors that make Australia a unique market

We asked three in-markets experts for their insights into Australian consumers.

Participants:

• Lachlan Brahe, VP Australia, ComScore
• Marcel Wijnen, creative director, Marque Branding Consultants
• Justin Graham, Chief Strategy Officer, M&C Saatchi Group, Australia

What distinguishes the Australian consumer market from others? What are the most interesting trends in Australia that make its consumer market unique in Asia?

Brahe: Australian marketing tends to follow the U.S. and European trends more so than other Asia-Pacific markets. If considered on a per capita basis, the ad spend in Australia for overall advertising, and especially digital advertising, is close to the highest in the world making for an over-saturated landscape. According to IAB Australia’s Online Advertising Expenditure Report for December 2016, total ad spend on online advertising grows 15 percent year-on-year, driven by significant growth in video advertising with 76 percent year-on-year. This density of advertising, coupled with the rapid take-up of advertising technology (retargeting, programmatic platforms, ad validation services, data-driven buying) make for extraordinary competition in a relatively small, yet sophisticated, market.

Wijnen: In 2017, Australia consumer trends are really being led by the millennials who want more experience over materialism, personalization over prestige, and small and relaxed over big and formal. This age group are skeptical of companies and brands, meaning not just transparency but being pro-actively being upfront about areas such as origins, sourcing, processing methods, nutritional values is a must. It’s about appearing to be an educator about your product. If brands don’t do this, consumers assume that they are hiding something, and will easily discount them in their choices.

Health and wellness is also continuing to gain strength as a trend. It is becoming a conscious consumer driver—everywhere and all the time. Previously considered ‘specialist’ health choices for dedicated enthusiasts are now becoming mainstream. This doesn’t mean that consumers don’t buy the bad stuff, but more and more they are becoming aware of this choice and looking for ways to balance their lifestyles.”

What are some of the cultural issues brands need to be aware of when marketing here?

Brahe: I don’t think brands face ‘cultural issues’ as such. Australia is a very multicultural society and generally embracing of new ideas and products. One aspect of Australian life to which brands should be sensitive is the very high cost of living, relative to other Asia-Pacific markets. This can have an impact on market segmentation, purchase cycle, the need for product/portfolio diversity and the need for potentially aggressive discounting and price setting.

Graham: As we discover and define our new identity, we are confused to say the least. Neither East nor West, neither bat nor bird, today we live in limbo as we find our feet. This has given rise to various cultural contradictions, confusion and emotional turmoil.

Everything that once defined us is currently under construction as we continue to evolve alongside our neighbours. Our ‘bush’ badge has been smothered by a metropolitan haze. Today the city is growing at double the speed of the country (The Australian 2017), and the closest most of us will ever get to red sand is an empty block in the urban sprawl of greater Sydney.

The ‘land of the fair go’ is now home to a huge divide between the haves and have nots. The top 20 percent of wealth holders in Australia have 70 percent more wealth than bottom 20 percent of income earners (Mcrindle, 2016).

On the doorstep of new world player Asia, we are attempting to shake off our ‘Crocodile Dundee’ days and find our own cosmopolitan style. There is an unwavering confidence in the Asian consumer market as their economy emerges, and in an attempt to keep up, 85 percent of Aussies agree that we are living beyond our means. As our wants become needs, and luxuries turn to necessities, 60 percent of Aussies are living pay-check to pay-check, despite feeling anxious about their future financial security. The new norm in the built up cities is an expectation of private schools, international holidays, double-digit property growth and European cars. The unrealistic acceleration requires yearly salary growth.

Wijnen: Australia is a country of immigration, full of immigrants, people who have been brave enough to leave their homes and look for something new, something better. There’s a sense of adventure and experience-seeking that really stays true in the Aussie psyche and that’s one of the unique things about Australia. A lot of countries have a very strong sense of identity but in Australia it’s more about opportunity as opposed to what you are, because it’s such a melting pot of different people. This makes for a marketplace very open to new ideas.

The cultural sensitivity that external brands coming into Australia need to consider is probably about the presumption of who Australia is. It’s not America, it’s not Europe, it’s not Asia; it is its own place and Australians are quite adamant about that. So if a brand tells us ‘You’re Australia, you’re like this’, we tend to push back quite hard. We prefer people to talk about our differences rather than tell us who we are because, I think, Australia lacks a real good sense of identity. That is also its opportunity: different people with different ambitions etc all came to australia for similar reasons—that sense of opportunity.”

Is there anything advertisers need to avoid?

Brahe: There’s a trait in Australia called “The Tall Poppy Syndrome” which the Oxford dictionary defines as, “A perceived tendency to discredit or disparage those who have achieved notable wealth or prominence in public life.” Basically, it’s important for all brands, especially leading brands, to remain humble and respectful of their customers and prospects. This is compounded due to the competitiveness and density of media in Australia. In short, no one likes an arrogant winner!

Graham: Firstly, don’t make ads. Australians have a love hate relationship with marketing. They are cynical towards ads, but value brands. While Asian consumers have the biggest reliance on ads in the world to build preference for a brand, 73 percent of Australians believe that ads can’t be trusted (M&C Saatchi, 2016) and a huge 55 percent of Aussies think that brands spend on ‘social good’ advertising, but actually don’t really care (Cavill & Co, 2016). Despite cynicism towards ads, 73 percent of Aussies still look to brands as a judgement of quality (M&C Saatchi 2016). This means that to win in the Australian market, brands shouldn’t make ads. Brands should be experience led, brands should be active, and brand building should hold importance in the business's budget.

Secondly, don’t make generalisations. Like the Asia Pacific region, Australia is made up of diverse consumer clusters each with their own subtleties. Today, more than ever before, these clusters have varying beliefs and behaviours due to the broader cultural shift in narrative. See the complex social structure of Australia as an opportunity. Know your audience and their tribes down to the tee. Understand their intricacies through by leveraging data. If you know your customer first, the rest will follow, and it won’t matter where they live geographically.