TV IKEA’s CMO Kirsten Hasler and former Diageo and Domino’s CMO Adam Ballesty reckon there is plenty of value in pouring ad dollars in regional Australia, but only under certain conditions.
Two of the nations top marketers have encouraged the industry to consider regional Australia.
IKEA ANZ’s head of marketing Kirsten Hasler said that the home furniture store has seen positive ROI for strategically investing in markets outside of the five metropolitan areas, while Adam Ballesty, the former chief marketer at Diageo and Domino’s, said that underinvesting in regional Australia, where brands like Queensland’s Bundaberg are from, had cost the company in some of its “heartland communities” and focusing too much on metropolitan areas had previously led to the brand’s decline.
Both explain that advertising in regional communities, especially where the brands have a presence, can deliver solid ROI, but there’s one caveat: make sure you have the right sized advertising budget.
IKEA, which traditionally had spent most of its advertising budget on the metro areas where its stores were located, begun researching strategic regional areas nearby to find out why customers weren’t engaging with the brand.
Hasler said that they discovered regional shoppers were unaware they could buy IKEA products online, so began an advertising campaign.
“The traffic uplift for our website was 31 per cent, just by promoting in those regional areas. So it is a very receptive audience for us and it really showed us that customers were interested to hear from us in areas that we haven’t traditionally in advertising,” she said.
“It’s such an important lesson to get close to your customers and especially those people that don’t shop from you.”
Ballesty, working at alcohol beverages giant Diageo, recalled a time when one of its brands, Bundaberg rum, was “clearly in trouble” promoting his team to go a “roadshow of research” to rebalance, splitting up the sunshine state into the mainland (Brisbane) and heartland (regional Queensland).
“In Brisbane they didn’t stop (investing in marketing) Bundaberg rum because Bundy is old Queensland fighting juice… and then, you go to Townsville and we had left them…and shifted all of our money in so we needed to recreate a conversation that made everyone proud, you know, of this great Australian spirit.”
Bundaberg rum recovered its foothold in regional Australia, helping the brand recover the ground it had lost by being too metro-centric in where it advertised.
A hierarchy of ad spend
Boomtown chair Brian Gallagher told the conference that investing in regional Australia, where about a third of the population lives has many benefits: its often more cost effective than metropolitan areas, efficient and there is less clutter.
However, there are still reasons why many categories of advertisers avoid running campaigns in the country.
“There are so many competing forces for the marketing dollars, so in the search for efficiency and accountability, there is a hierarchy in the strategic outlook on what to buy and where at the very beginning of the campaign planning and entire audience base,” he said.
“At the top end of town, everybody’s buying everything they can and extracting as much value as they can because they’ve got deep data sets that tell them exactly the outcomes.
“And there’s a big middle section of advertisers that have different types of strategies that I think are leaving a lot of audience on the table. A little bit more awareness of what is available, just in the traditional media buys, might set you up for success with just a much greater reach.”
But it’s not simply a matter of throwing more money at spots in ‘the sticks’, most companies are under cost pressures and taking a strategic approach to investment, and doing it properly matters.
Hassler and Ballesty both made the point that you need to have enough budget to be effective when advertising in regional areas rather than taking a scatter gun approach.
When IKEA sets budgets, the look at the “three Es” of efficiency, effectiveness and enough.
Once the furniture store identifies the areas and audiences it wants to target, it has to make sure campaigns have enough money to ensure every dollar spent on an area can be effective without breaking the bank.
“When it comes to investing into new areas, we have to be super specific,” she said. “We weren’t going to invest in all of regional Australia, we’ve selected priority regional areas and want to make sure we have enough budget allocated to that.
“The results show that it works, and then you show those results internally it becomes more of a growth opportunity and the businesses is willing to reinvest. For anyone who’s thinking about testing out those regional areas, I recommend you start small and make sure you have enough budget for it to be effective.”
Ballesty said that targeting regional Australia can pay dividends but that marketers still need to remain focused on a targeted approach.
“Pretty much throughout my marketing career, I’ve watched marketing teams getting smaller and budgets getting tighter, so we have had to become efficiency monsters,” Ballesty said. “The reality is, is there’s so much wastage…Rather than focusing on four or five things, focus on doing one thing really well and get under the skin of every cent in the budget to make sure you’ve got enough money to advertise effectively.”
