Traditional ads ‘still crucial’ to selling: report

DESPITE digital disruption, traditional advertising channels remain as important as ever to business and government, a new report has found.

Traditional ad campaigns, such as Coles’ famous “down, down, prices are down” hand, are crucial in the selling process. Picture: Coles

DESPITE digital disruption, traditional advertising channels remain as important as ever to business and government, a new report has found.

Businesses need to adapt their advertising strategies in response to digital changes but should be wary of relying solely on social media to promote their brands, says Deloitte Access Economics in its report on the economic employment and business value of advertising.

“Consumers are omnivorous so they (advertisers) need to have a balanced representation across channels,” said the report’s author and Deloitte partner John O’Mahony.

“The future for advertising is bright,” he said adding that such a valuable economic driver, worth $40 billion a year to the Australian economy, should be a part of the national economic debate.

“It could be a part of our innovation story. Most people when they think of innovation think of science and technology ... but since you have advertising fuelling innovation and competition that could be part of the conversation as well.”

A point-of-sale ad at Woolworths.

Coles goes back to basics to advertise bananas in store.

Traditional advertising continues to have a significant influence on what people buy. While 42 per cent of people said they would be influenced by a newspaper advertisement only 31 per cent said they would decide to buy something because of an ad on social media.

And 55 per cent of people said they would pay more attention to newspaper advertising in print than advertising on the internet.

“Between 37 per cent and 63 per cent of Australians report that advertisements on TV, newspapers, magazines, radio and billboards have a high or medium influence on their choices when buying goods and services,” the report found.

O’Mahony said advertising benefits the economy and consumers by helping make goods cheaper and allowing consumers to buy better goods for better prices.

“For example, the competitive battle between banks and supermarkets, like the price competition between Coles and Woolworths, that has been facilitated by advertising. If there was no advertising people might get away with far higher pricing,” O’Mahony said.

In 2014, 12.6 billion was spent on advertising in Australia with retail, motor vehicles and finance and insurance industries the three largest industry sectors.

Deloitte estimates that advertising is worth about $2,000 per person to the economy every year — or slightly more than all of the nation’s hotels, pubs, bars, restaurants and cafes.

It also creates employment for 200,000 people both directly and indirectly.

It is also a valuable way to communicate crucial social messages which benefit society as a whole such as campaigns to encourage people to quit smoking and reduce speeding.