It’s the conversation nobody wants to have – not least in an industry entirely built on confidence – but it needs to be said: Australia’s marketing economy is in crisis.
Pressure on marketing budgets, confidence and consumer spending is nothing new, but according to those Mumbrella spoke to, what’s unfolding is not simply another cyclical downturn.
Multiple senior industry figures believe the current environment reflects something deeper and more structural: driven by sustained uncertainty, rising caution and a wave of strategic overcorrection across channels, budgets and brand investment.
The 2008 comparison
Peter Vogel, chief executive officer of Wavemaker, likened current conditions to the global financial crisis in 2008, only this time, potentially worse for Australia.
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“What’s different now is how globally linked the economy is. Australia isn’t insulated anymore,” he told Mumbrella. “We’re much more closely tied to what’s happening regionally and globally, and that’s having a bigger impact on clients. Market conditions are tougher.”
Peter Vogel
Or as Spinach managing director Nicole Miranda put it: “Australian consumer sentiment has spent the better part of a year scraping recession-era lows. When the consumer hesitates, it has a direct impact on the confidence of marketers to invest and make longer-term decisions.
Much has been written over recent months about Australia’s economic woes, from the recent plunge in oil prices to Henry Innis’ analysis of both the nation’s housing crisis and the effects of recent capital gains tax (CGT) changes.
For Teresa Sperti, director of advisory firm Arktic Fox, events both global and local this year reflect “a genuinely unusual convergence of pressures”.
“Consumer confidence is sitting at levels not seen since the Covid lockdowns, well below the decade prior, and that’s creating real drag on discretionary spending and category growth,” she said. “We’re also in the early stages of geopolitical shocks that haven’t fully worked their way through the economy yet.”
Taken together, the picture points not only to the scale of the issues, but to a moment where simply waiting for the cycle to resolve itself is no longer viable.
“Most brands have accepted that the current conditions aren’t a blip – they’re the new operating reality for the foreseeable future, so the focus has shifted to executing well within that reality rather than waiting for conditions to improve,” Sperti said.
This view was also reflected by Adrian Roeling, chief operating officer of Hatched Media, who went as far as to say the market has been uncertain since Covid, but has now “reached peak uncertainty”.
“We can’t ride this out, hold our breath and wait for things to get back to normal,” he said. “This is our new normal. Things will not calm down, so you need to equip yourself with the skills to thrive in turmoil and you will thrive.”
The paralysis problem
Before any brand or agency can think about thriving, however, many are grappling with a more immediate issue: decision paralysis.
Recent industry data, including TrinityP3’s State of the Pitch report, points to longer procurement cycles and delayed decision-making, while anecdotal evidence from agencies suggests clients are taking significantly longer to commit to briefs and sign-offs.
Nicole Miranda
Spinach’s Miranda said client confidence now “fluctuates between being cautious and somewhat paralysed”.
“The cost-of-living crisis and margin squeezes mean ROI scrutiny is intensified, and every dollar spent is being interrogated,” she said. “This paralysis happens when marketers are forced to defend long-term brand support in a room demanding short-term visibility and performance.”
She added that marketers are increasingly being pushed to reframe their role internally, positioning marketing not as a cost centre, but as “the central nervous system of the business”.
For Australia’s independent agencies, which do not have the same safety net as holding company networks, the pressure is being felt more acutely.
Bob Mackintosh, founder of independent agency Montoya, said multiple forces are now converging into a single pressure point.
“There are some very powerful forces at play, all hitting at once, and for some businesses that is proving paralysing,” he said. “Geopolitical instability, AI, redundancies, cost of living pressures, interest rates, and general consumer caution. The challenge is that it’s not one thing, it’s everything, which makes it hard to know what’s driving what.”
Bob Mackintosh
From a practical standpoint, he said the impact is already visible in client behaviour, with a pullback in both the scale and frequency of briefs.
“There’s also more pressure to extract greater value from existing work. Campaigns are being rerun, refreshed, or stretched further rather than replaced altogether,” he said.
“From what I’m seeing and hearing, a lot of businesses are in a holding pattern. Focused on the immediate term, preserving cash, waiting for clearer signals. Survival mode … simply a matter of riding it out.”
More to lose, more to gain
Whenever there is an industry downturn, the marketing community is often met with a familiar refrain: “keep marketing”.
Indeed, this is an approach strongly advocated by the Ehrenberg-Bass Institute and leading marketers such as Mark Ritson, who reiterate that long-term cuts to marketing budgets will ultimately erode sales.
That principle, however, is often easier said than done for a marketer sitting in a boardroom where decisions are being made under the weight of job security, cost pressures and near-term performance scrutiny.
However, for Vogel, there is nuance to this conversation.
“In times like these, client response becomes critical,” he said. “There’s always that narrative that when the economy dips, it’s the time to invest, and while that’s true in theory, the reality is more complex.
“When things are stable or growing, it’s actually very hard to gain market share; even half a point or one percent. But in uncertain times, the opposite is true. You can see much bigger swings in market share. You can gain it quickly, or lose it just as fast.”
This is also a view shared by Roeling, who points to a split in how experienced marketers are responding to the current environment.
Adrian Roeling, Hatched Media
“Most of our clients are fairly experienced marketers who have been through peaks and troughs over the past few decades, and generally adhere to the motto of ‘keep calm and carry on’,” he said. “Most understand and can demonstrate the genuine impact advertising has on their business in any conditions and are well-positioned to maintain investment.”
“The braver ones see the opportunity to take advantage of a soft media buying market and are accelerating growth ahead of their competitors.”
The subject of downturns almost inevitably prompts familiar platitudes around effectiveness, return on investment and media mix optimisation, as brands are forced to “do more with less” while reassessing the role each channel plays in driving both short-term performance and long-term brand equity.
Yet for Spinach’s Miranda the brands that will ultimately emerge stronger are those that resist over-indexing on short-term tactics and instead maintain balance across the broader ecosystem.
“The brands that will come out of this stronger are the ones that hold their nerve and keep the ecosystem balanced,” she said.
“The brands that will win are the ones that treat social and content as vital parts of a connected strategy, rather than the whole strategy. They will use these channels to turn passive buyers into genuine fans and communities, rather than just flooding the feed with AI and influencer-generated messaging. They’ll remember that content is just a delivery mechanism; it cannot come at the expense of strategic, creative, and distinctive brand communication.”
Sperti, meanwhile, argued that the real divergence between successful and struggling brands is not simply about who cuts or spends, but which brands are using the downturn to reposition for what comes next.
“The separation happens between brands that are heads-down managing margin today, and those who are doing that and asking: are we set up for what’s coming?” she said.
She identified three structural forces underpinning that divergence, the first being a generational shift, with Gen Z’s growing presence in the workforce and rising spending power forcing brands to rethink how they show up
Teresa Sperti, Arktic Fox
The second is the reconfiguration of commerce itself, as platforms like Amazon and Temu take a larger share of Australian spending, adding that “has real implications for both retailers and brands — distribution strategies, pricing architecture, loyalty strategies and more”
Lastly is what she describes as innovation under constraint. In slower-growth conditions, the instinct is often to compete on price, but she notes value is only part of the equation
“Shoppers will still pay a premium when a product genuinely warrants it, or when a purchase feels like a treat. The brands finding pockets of growth right now are the ones actively looking for them – not waiting for the category to recover.”
For Vogel, who has navigated multiple downturns over a 36-year career, including the GFC and Covid, the danger of the current moment lies in over-correction
“If clients focus too heavily on the short term, they start to drift down to the bottom of the funnel and, in doing so, risk neglecting the proven marketing principles that sustain long-term brand strength, ensuring brand health is strong and service standards are right,” he said.
“And that matters, because if you let a consumer down at this point, you may never win them back.
“The clients who take those shortcuts and become too extreme in their short-term focus will regret it, because it ultimately compromises the business — certainly over the next 12 months. You see it across the board, whether in marketing, politics, or elsewhere: when you lose sight of the consumer and what they actually need, the consequences follow quickly.”
Note that several of the above quotes from interviewees were given as written responses over email.