19 February 2020
Michael Roddan – Reporter
Australia’s largest superannuation funds have spent close to $400m on advertising, stadium naming rights and sport sponsorship over the past five years in a bid to get a bigger slice of workers’ compulsory savings.
The figures, which provide an insight into the spending habits of a handful of the country’s 200 super funds, come amid a fierce industry debate about whether the current 9.5 per cent of worker wages being set aside for the retirement system will be adequate to maintain living standards in retirement.
An analysis of parliamentary disclosures by The Australian has found nine of Australia’s biggest super funds have spent $384m on advertising campaigns, sponsorship of sports teams and stadiums, marketing and brand research since the 2015 financial year.
This includes more than $100m spent by the country’s largest fund, AustralianSuper, on marketing, brand promotion and media broadcasting over the past five years. Over the same period, AustralianSuper also shelled out a further $24m to the not-for-profit super sector’s lobbying and research arm, Industry Super Australia, which runs its own advertising campaigns, including one launched this month calling on the government not to dump the scheduled increase in the superannuation guarantee from 9.5 per cent to 12 per cent, reportedly at a cost of $3.5m.
Hostplus, which manages the savings of hospitality and tourism workers, has spent more than $60m on brand advertising, along with an extra $18.5m on payments to Industry Super Australia, since the 2015 financial year.
Disclosures made to the House of Representatives’ economics committee, in response to questions on notice from Liberal MP Tim Wilson, also cover submissions from the construction workers industry fund, Cbus, which spent $48m on a number of brand advertising ventures over the same period.
Cbus, Hostplus and AustralianSuper attract a large degree of their membership from having won “default” fund status with employers through enterprise bargaining agreements, which means workers who fail to nominate their own super fund will have their savings managed by the default provider.
Super trustees are required by law to only spend money in members’ best interests and for the sole purpose of providing benefits to members when they retire.
Advertising spending is not unlawful, and is monitored by the Australian Prudential Regulation Authority. The super industry argues building brand awareness and attracting new members helps drive economies of scale that support the efficient growth of retirement savings for their members. However, only about 3 per cent of super members switch funds each year, while about 80 per cent of new employees do not make an active choice and go with the default selection chosen by their employer.
Cbus outlined a number of advertising campaigns, including a five-year, $30m “brand campaign”, a program targeting younger members, and another bolstering its status in Queensland where the rival BUSSQ super fund manages the savings of workers in the construction industry. Firms paid to keep track of Cbus’s spending include Kantar TNS, Nielsen Sports, Empirica Research, CoreData and Essential Research.
The $57bn Hostplus said its brand advertising included “advertising on television, radio, online billboards and on public transport”, sponsorship of logos on sports teams and “advertising on stadium signage scoreboards” and sending mail, emails and text messages to its members.
“The promotional activity of Industry Super Australia includes advertising on television, online, on radio, in the press and on billboards,” Hostplus said.
Australian Super, which manages $180bn, told parliament it tracks the “efficacy of campaigns in either retaining or gaining new members” for each of its campaigns.
The for-profit retail super sector has also spent millions on marketing, including Commonwealth Bank’s superannuation arm Colonial First State, which spent $22m over five years on advertising campaigns.
CBA only invited ad agencies Leo Burnett and IKON to compete for contracts, and only awarded contracts to those two firms, but said it commissioned KPMG to “track brand awareness and consideration over time and report this on a monthly basis”.
This includes placing ads during the Tour de France, money for a “content partnership” campaign with The Guardian online newspaper and a series with Fairfax media titled The Road Next Travelled.
National Australia Bank’s wealth management arm, MLC, spent more than $22m on marketing, about half of which was attributed to the superannuation arm, NULIS, on campaigns such as Save Retirement between 2014 and 2016, and Life Unchanging between 2017 and last year.
“The objective of both campaigns was to drive client and member engagement in their retirement savings and all aspects of proactive wealth management, while positioning MLC as a prospective partner as they seek to save for and live well in retirement,” said NULIS, which was exposed by the royal commission for charging some of the steepest fees while delivering the lowest returns in the $2.9 trillion superannuation sector.
Rest Super, which manages the savings of retail employees and derives most of its membership through the default system, said it had spent $30m over the past five years on advertising. REST has employed creative firms Carat Australia, Customedia, Arnold Furnace, Mr Wolf and Bauer Media Group.
“Rest engage a consultant to provide performance reports on advertising brand campaigns, which is presented to the Rest Board Member and Employer Services Committee,” Rest said.
QSuper, which manages the savings of Queensland public servants, spent $31m on advertising, promotion and direct marketing, while StatePlus, which looks after the nest eggs of NSW public servants, spent almost $10m on ad campaigns and sponsorship over the past five years.
“A strong focus of QSuper’s current direct marketing to members is financial wellbeing,” QSuper said.
“This includes informing and educating members on the value of financial advice, educational seminars and insurance — that is, services which aim to improve the financial literacy and retirement outcomes of our members. While this may be categorised as marketing it may also reasonably be categorised as education of QSuper members of their retirement options and opportunities.”
StatePlus, which has contracted creative agencies 303MillenLow, the Lexicon Agency and Reef Digital Media to run its marketing campaigns, has spent a little over $9m since the 2017 financial year.
“StatePlus runs always-on above-the-line and below-the-line campaigns with the objective of building brand awareness and consideration and generate new members to the fund,” said StatePlus, which looks after the savings of NSW public sector employees.
It noted its brand awareness increased by 44 per cent, and its “informed awareness” level rose by 58 per cent following the advertising.