AANA boss Josh Faulks: ‘Now is not the time to be cutting marketing budgets’
Economic headwinds, rising inflation and whispers of recession are no reason to cut marketing budgets, according to the new CEO of the AANA, Josh Faulks, who told Mumbrella now is the time for quite the opposite.
“We’re all seeing that the industry’s facing some pretty big challenges at the moment,” he told this week’s Mumbrellacast, adding that the challenges are causing changes to consumer and corporate behaviour.
Faulks: ‘It’s a pretty tough time for the industry’
“We’re seeing it coming through now. Businesses are cutting costs, and cutting staff. Just look at tech companies, for example, and their layoffs, and I don’t think we’re seeing the worst of it yet.”
Faulks was appointed as the new CEO of Australian Association of National Advertisers in August 2022, following an international search process, starting the role in October. Prior to joining the industry body, he was the national lead of the Reputation Advisory business at KPMG and held senior roles in ABC and for federal cabinet ministers.
“I’ve spoken to a few of my colleagues overseas in Europe, and in some countries, it’s pretty dire, and I think Australia usually follows a couple of months after that,” he said.
Brands and agencies are faced with similar challenges, with a senior economist from Deutsche Bank this week predicting the Reserve Bank of Australia’s official cash rate to hit 4.1% this year adding to the pain, and the tightening of wallets.
“We haven’t seen this kind of inflation for decades, and it’s a new ground for our industry because our members are asking their customers to pay much higher prices for products than they did before when real incomes are dropping, and this is a real ultimate test of brand loyalty.”
Faulks said “it’s a pretty tough time for the industry”, but rather than cutting brand spend, he said CMOs need to be asking boardrooms for more investment to protect brand loyalty while they are feeling the squeeze.
“We’ve seen plenty of research about recession and also during Covid, that those brands that invested in marketing during those downturns faired much better than those that chose to cut their marketing spend.”
“It’s all about that recovery. They’re so well positioned, they’ve got greater share of the eyes and the ears for their recovery, but the recovery will definitely happen. That’s the nature of the economy and those brands were much in a much better position to take advantage of that recovery.”
Over the rest of the discussion, Faulks talked about the major points topping his agenda, the cross-industry collaboration he is having with the MFA and ACA, as well as other industry bodies, and why his resume makes him a quality fit to move the AANA along.
Listen to the full interview in this week’s Mumbrellacast:
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Calum Jaspan was news editor at Mumbrella, based in Melbourne. He was also the producer and host of the Mumbrellacast. He left Mumbrella in May 2023.
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