Economy experts says budget was ‘great for Google’

(l-r) Matthew Melhuish, Justin Fabo, Megan Brownlow, Andrew Cornell

(L-R) Matthew Melhuish, Justin Fabo, Megan Brownlow, Andrew Cornell

The CEO of the Enero Group has taken a swing at Coles and Woolworths saying their duopoly is “squeezing the life out of their suppliers” while the recent federal budget was described as “great for Google” by PwC’s Megan Brownlow.

Speaking on a panel looking at the state of the Australian economy in the first session of Mumbrella360 today Brownlow, the author of the annual Australian Entertainment and Media Outlook report, said the tight budget would see a boost for sectors including cinema attendance, out of home and direct response.

She said: “This is a great budget for Google. When the CFO demands of their CMO they want to get more accountability for their ad dollars they will turn to direct response. Google already has half of the Australian online advertising market, but they can expect a boost.”

Justin Fabo, head of Australian economics, corporate and commercial for ANZ told the room he did not expect consumer confidence, which has dipped since last month’s budget “to bounce back to previous levels for the next few months”.

Brownlow said cinema was a traditional benefactor when consumer confidence is low as it is a “luxury” people feel they can afford.

CEO of Enero Matthew Melhuish said he has also seen the return of consumer confidence across the US and UK, but when asked what challenges were holding Australia back he pointed to traditional duopolies, adding: “Some of the challenges in our sector in Australia are the duopoly of the two big supermarkets squeezing the life out of their suppliers’, which limits their marketing budgets.”

He also pointed to the pace of change in the media and marketing industry saying; “We’re privileged to live in is time. When I started my career everything seemed fixed and it was done the way it was done, but its far more dynamic now, and its an exciting time because of that.”

Responding to a question from moderator Andrew Cornell, editor of ANZ’s newsroom Blue Notes, Brownlow said she did not expect to see marketing dollars return to traditional mediums when budgets do pick up, and pointed to the Blue Notes experiment as an example of where the money is now being diverted to.

“Four out of five marketers are telling us they’re spending more on their owned channels,” she said. “How do media companies take their core skills the creation and curation of content and do it for their clients? We’re seeing some interesting examples like Nova Entertainment for Coles Radio, but its a major disruption and an opportunity.

“More money is also going into data expenditure, which is coming out of marketing budgets.”

She also said she was “excited and hopeful” for the traditional media companies like News Corp and Fairfax, which have suffered from declining revenue shares in recent years due to structural shifts, pointing to innovations they are making such as Fairfax getting into more events, and content marketing strategies.

However she added: “Are they doing it fast enough, we can’t tell yet.”

Alex Hayes


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