Ad demand continues decline from last year’s government boost: SMI

Advertising spend in Australia has declined year-on-year for the first quarter of 2023 following an unusually high-spending 2022, according to Standard Media Index.

SMI found advertising revenue across Australia declined 5.1% in the quarter ended March 2023, thanks to reduced spending from the government category. With the government numbers removed, revenue for the month declined 1.6% year-on-year.

The report also found government spending declined by $73.5 million or 47.5% for the quarter ended in March.

Other categories however saw some increases. Retail, automotive brand, travel and communications collectively saw their combined spending increase 13%, with travel seeing a 34% increase.

Outdoor advertising spend increased by 13.7% in the quarter, cinema spend lifted 16.9%, while printed magazines were up 9.9%. Digital was flat with a 0.5% decline, however, within Digital, BVOD spend was up 15.4% and online magazines increased 47.2%.

For the month of March alone, SMI found advertising revenue declined 5.5%. With the government numbers removed, revenue for the month declined 1.5% year-on-year.

Government spending in March 2022, which involved COVID-related campaigns and pre-Federal election advertising ahead of the May 2022 polls, reduced by $31 million or 52.7% in March.

SMI Australia and New Zealand managing director Jane Ratcliffe said all media were impacted by the drop in government spend, with digital media taking a 31% decline in March and TV declining 54.7%. Outdoor meanwhile declined 65%, while radio dropped 70.3%.

“When we remove the impact of government ad spend we can see digital revenues are back just 4.7%; TV bookings are back 9.4% (and if you include BVOD that declines further to -7.4%) and for radio the 14% decline falls to -3.5% excluding government and then -2.7% with digital audio included,’’ she said.

“It’s likely we’ve never before seen a single category have such a profound impact on the market, either positively or negatively, but COVID was a one-off global event and we are clearly still experiencing its effect in the ad market.’’

Despite the decline from government spending, outdoor delivered the best result among all media in March, with bookings increasing 18.5% and 31.2% with government category removed.

SMI said that while government category declined, the traditionally largest categories saw increases – retail ad spend grew 18.2%, automotive brand bookings increased 11.7% and travel ad spend was up 32.9%.

“The underlying strength of the market is evident in the fact that even with government ad spend included the value of ad spend from the ten largest categories has grown 0.1% in March, highlighting the fact that the lower ad demand is mostly coming from the smaller product categories,’’ Ractliffe said.


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.