Marketing on Trial
Right now in a Melbourne Federal Court, an entire era of retail advertising is taking the stand.
The ACCC’s case against Coles over ‘illusory discounts’ marks a critical inflection point for the media and marketing sector. For a decade, those big red Down Down hands served as a masterclass in brand conditioning.
But the consumer watchdog now argues the campaign crosses the line from marketing straight into manipulation.
This timing creates a spectacular headache for PR teams.
While Coles’ legal team defends their pricing strategies as ‘fair dinkum’ and points the finger at inflation, Woolworths just released its half-year results. Underlying net profit surged 16.4 percent to $859 million. The market cheered this ‘margin expansion,’ sending the share price rocketing.
The thing is, Coles and Woolworths are generally more profitable than almost all of their international peers, according to ACCC analysis.
And in the midst of Australia’s cost of living crisis, it’s time to ask some hard questions.
How long does corporate Australia think it can get away with telling consumers it’s raining while holding the watering can?
The 2GB Barometer
If you want to understand the true depth of the great corporate disconnect, look away from the ASX. Listen to some good old talkback radio.
I tuned into Ben Fordham on 2GB the other day for my sins, and got an earful. Talkback offers the ultimate, unfiltered barometer for consumer sentiment. If you want to hear what the public actually thinks of a new brand campaign, listen to the punters calling in.
Right now, they’re pretty ropable. The grocery checkout only represents a fraction of the pain because the gouge is running rampant everywhere. Callers were hitting the switchboard to make their frustrations known. Because they faced with exorbitant 20 percent home insurance premium hikes.
To beat the system, a caller explained that he jumped on to the insurer’s website, and entered details as a ‘first-time customer’. Surprise, surprise, the quote came back basically as it was less the 20% rise.
The Loyalty Trap
This reveals a profound contradiction at the heart of modern marketing. Brands and agencies spend millions of dollars and win prestigious awards for campaigns that champion trust, family, and community support.
Yet, the backend reality of these businesses often relies on a punitive loyalty tax. Brands basically ask their most long-term customers to fund the shiny bait they use to catch new ones.
Today’s consumer does not just read the weekly catalogue; they read the quarterly earnings report. They understand exactly what ‘margin expansion’ means for their household budget. They know a temporary price spike before a discount operates as a trap rather than a lifeline.
The Reality Check
The industry needs a serious reality check here. Chief Marketing Officers sit in an unenviable position right now.
Boardrooms demand aggressive margin growth, while consumers demand radical transparency and genuine relief.
Bridging that gap requires more than a clever creative brief. Brands cannot manufacture trust in an agency brainstorming session, and they certainly cannot fix systemic pricing issues with an empathetic jingle.
The path forward demands that marketing leaders step out of the spreadsheet and advocate fiercely for the customer experience at the executive table. If a business model relies on margin expansion and loyalty taxes, the marketing has to reflect a grounded reality.
CMOs simply cannot brief their agencies to build campaigns that pretend the brand is the hero of the household budget when the math tells a totally different story.
The corporate world has a fleeting opportunity to shift toward authenticity.
The Talkback switchboard is melting down, those big red foam hands are starting to look a bit lame, and the public has run out of patience.