Google Australia MD: Marketers failing to reinvest are ‘cost saving their way to decline’
Maile Carnegie speaking at The Australian Digital Marketing Forum
The local boss of Google has told a small business forum that Australian marketers are moving savings in their marketing budgets to the bottom line rather than reinvesting it, with the result they are “cost saving their way to decline.”
“I’m trying not to get on my soapbox,” said Maile Carnegie, managing director of Google Australia.”What I find quite troubling is that as a marketing industry, or fraternity, we have lost the ability to position what we do as a growth driver.
“When you actually ask CEOs about marketing and ask them how they categorise it, they class it as a cost of doing business versus a growth engine. So when you look at a lot of Australian businesses they are cost saving their way to decline.”
Only two problems I can see here.
1. Advertising =! Marketing.
2. I’d take Ms Carnegie more seriously if Google paid the appropriate level of tax in Australia on their actual profit derived here. i.e. revenue less costs associated with operating in Australia.
Funnily enough what does google do….search and…sells advertising
Yes agree, delegate your online presence and you are starved for growth
@I wonder.
Who pays more tax in Australia: Google or News Corp?
Are Google paying tax to the threshold’s permitted by legislation?
I am interested to know, because you must be very knowledgeable when it comes to tax; evidentially!
Yep, it’s the marketers that are banking the savings. Anytime you ask them if they’d like less money they go “yeah sure, I’d love for that to happen”
This problem is actually at the heart of advertising’s Kodak moment.
In 1976 two academics (Michael Jensen and William Meckling) wrote a paper called “Theory of the Firm”. This article kick-started the ‘maximise shareholder value’ strategy adopted by most listed companies.
Whilst shareholder value sounds like a sensible measure for commercial success, it actually creates a bias towards the short-term and makes it harder to create sustainable long-term growth.
One negative effect – among many – is that the creative industry is becoming commoditised because it is increasingly used to drive immediate behavioural responses (do this now, click this, buy this, etc) instead of building long-term memory structures (i.e. a strong brand that is worth paying more for).
So, yeah. Blame those two dudes as to why the client keeps rejecting ‘brave’ creative for the safe idea.
As a small business owner just starting out, I knew it was absolutely VITAL to establish my “digital footprint” ASAP, which is why I have invested in a paid & managed True Local, Yellow Pages/Sensis, and Start Local Featured Listing for 1 year, as well as any social media I could think of, Facebook, twitter, Google+, Google Maps, etc.
I have also had a quite surprising result from Gumtree, although I had to spend plenty of money to achieve those results.
The end results? After 3 months, no orders yet, although “expressions of interest” from various government departments and 1 South Australian Mining company.
My BIGGEST issue is establishing “brand awareness” because Hydrogen Fuel Enhancers are a VERY controversial topic. If I could afford radio and TV, even those “shop-a-dockets”, then I might have a chance.
The best possible outcome is if some media outlet could do a story on my business. Now THAT is advertising money can’t buy! 🙂