Tuesdata: The marketers spending their way through the cost of living crisis

Welcome to Tuesdata, our weekly data-led analysis for Unmade’s paying members.

In today’s edition, we investigate how economic headwinds are impacting marketing budgets in Australia. We also examine the wider context of consumer confidence and spending.

Further down we also address a down day on The Unmade Index that saw SCA’s market cap fall below $185 million.

Everyone else hits the paywall a bit further down. Subscribe today to get all of our Tuesdata posts and access our full publishing archive, which goes behind the paywall after two months.

Unmade members also got discounted tickets to our events, including humAIn, our conference focusing on the impact of AI on media and marketing. The coupon code to access the discount appears in this post below the paywall.

How marketers are (mostly) still spending

There’s never been a more difficult time to understand the behaviour of consumers preparing for a downturn, and the marketers who are trying to reach them.

There’s a blizzard of data – much of it contradictory.

Despite annual inflation still sitting above 7% and the Australian Consumer Price Index rising by 1.4% in the last quarter, the public is still spending – and so are marketers.

Two separate data points from Nielsen point to the contradictions.

According to Nielsen’s Consumer & Media View (CMV) survey, the average grocery shopping spend per week in Australia has risen by 9% from $140 to $153 over the last 12 months. What’s less clear though is whether this represents the same basket of goods costing more, or consumers also being willing to buy a little more. Most likely it’s the former.

And data from Nielsen’s Ad Intel tracker says that marketers’ ad spend on promoting fast moving consumer goods including groceries, fast food, over the counter drugs, alcohol, toiletries and cosmetics is up 13% year on year. We’ll come back to the FMCG advertisers shortly.

Data from Nielsen CMV shows 95% of Australians aged over 14 say they are concerned about the cost of living.

The categories Australians are most concerned about is groceries, with 84% of Aussies expressing concern. That’s a 34% increase in the past three years.

Data from Australian Bureau of Statistics’ Monthly Household Spending Indicator helps explain why.

The ABS numbers, which currently go up until March, show non-discretionary spending on the rise, leaving less available for more frivolous, discretionary spending.

Discretionary household spending rose by just 2.2%, effectively a drop, in an inflationary environment.

Meanwhile, non-discretionary household spending rose by a much larger 13.9%.

Plotted against time, the trend shows that discretionary spend is approaching its lowest point since the height of the pandemic when it went backwards.

The top FMCG advertisers

So how are FMCG marketers dealing with the challenge?

Nielsen Ad Intel revealed the five most prolific FMCG advertisers for February to April 2023: Reckitt Benckiser, Mondelez International, Lactalis Group, L’Oreal Australia Group and Nestle Australia Group.

The UK-headquartered Reckitt Benckiser primarily produces health products and owns brands including Clearasil, Enfamil, Finish, Veet, Air Wick and Mucinex.

Global snack company Mondelez International owns brands including Cadbury’s chocolate, Daim, Chips Ahoy!, Oreo and Belvita.

French dairy corporation Lactalis Group has a strong Australian presence, owning Pauls, Oak, Lemnos, Breaka and Vaalia among other household names.

L’Oreal Australia Group dominates a healthy chunk of the cosmetics and toiletries market, owning a litany of cosmetics brands like Lancome, Clarisonic, Yves Saint Laurent Beauty, La Roche-Posay, Kerastase, Redken, NYX, Maybelline and of course, L’Oreal Paris.

And Nestle Australia Group owns a variety of supermarket shelf staple brands, like Maggi, Nescafe, Milo, Uncle Tobys, Nesquik, Cheerio, Nespresso and Allen’s.

Estimated category spend for the FMCG sector was $209M compared to $185M for the same period last year (Feb-Apr 2022) according to Nielsen Ad Intel. That’s a 13% YoY increase.

Top spenders by sector

To discern which discretionary spending brands are most active in TV ad spend, we collated data from media intelligence service Canda. The figures stated are based on Canda’s monitored data estimated against rate card.

In the toiletries and cosmetics sector, Head and Shoulders came, well, head and shoulders above the rest in TV ad spend. It was estimated to have spent just under $2.2m on a dandruff shampoo advertisement that aired between September 2022 and May 2023.

Huggies Nappies splashed around $1.5m on its ad airing between March 2022 and May 2023.

Dettol spent an estimated $1.2m advertising its Power Plant Based products on television between June and September 2022.

L’Oreal Australia Group was included the top 5 FMCG spenders, and was the only toiletries and cosmetics brand in the ranking. One of its largest brands in the Australian market, Garnier, was estimated to have spent $1m on airing its Garnier Serum Cream television ad between September and October 2022.

Olay, owned by Procter and Gamble, spent just over $800,000 on its collagen peptide cream advertisement between October 2022 and May 2023.

Mid-range jewellery retailer Michael Hill spent the most on its TV advertising between October and December 2022 – $720,000.

Pandora followed, spending $460,000 on its ad airing between October and November.

Adventure gear retailer Kathmandu spent $550,000 on an ad that aired between October and November, and Best & Less spent $370,000 on ad airing between October and December.

With consumer confidence heavily influenced by the Reserve Bank’s future rate hike strategy, all eyes will by on governor Philip Lowe a fortnight from today.

Down day on the Unmade Index

The Unmade Index, our measure of the performance of ASX-listed media and marketing stocks, experienced a downturn yesterday. The Index fell 1.25%, landing at 640.9 points for the day.

Of all the players, only one had a positive day – real estate platform Domain, which rose only slightly, by 0.58%. The rest either fell in share price or had no movements at all.

Seven West Media was the leading loser of the day, experiencing a 3.90% drop in its share price.

Southern Cross Austereo also had a bad day on the market, its share price falling 2.53% to result in a market capitalisation of just over $184m, another all time low.

Ooh Media and radio company HT&E (now ARN Media) also saw moderate falls in share price, of 1.95% and 1.41% respectively.

That’s all from us today. We’ll be back tomorrow with a midweek edition of Unmade.

Thanks for being a member.

Your coupon code for humAIn:

Our paying members get 20% off tickets to all our events, including humAIn – human creativity X AI. Remember to enter the coupon code on the website before you buy your ticket.

Your humAIn coupon code is:

Unmade_Member

Go to humain.au