Ad market posts 12th consecutive month of decline in August, down 8.9%
August was the 12th consecutive month of decline for Australia’s media-agency-funded ad market, according to the latest numbers from the Standard Media Index (SMI).
The total market was back by 8.9% compared to August 2018, with all formats experiencing reduced spend. TV bookings were down 5.8%, digital 8.6%, outdoor 12.6% and radio 10%.
However, last week, SMI released a forecast which predicts the decline will be reversed in October, with the market expected to return to growth. SMI also noted that last year’s results, which are the comparison point for this year’s, were “exceptional”, driven by the Financial Services Royal Commission, Commonwealth Games, football World Cup, and various elections.
Those events, and the ad spend they drove, are in stark contrast to this year’s political uncertainty, economic volatility, lack of business confidence and a tighter credit market post-Royal Commission.
But September bookings look encouraging, SMI said, with the level of decline well below that of recent months.
“And now that we’ve seen interest rates cut to their lowest point in history, we are even more confident in our forecast for the advertising market to grow year-on-year in October,” SMI AUNZ managing director, Jane Ractliffe, said.
“And we can see in our category trend forecasts that many advertisers that spend the bulk of their advertising budgets in the Q4 period are already preparing to again grow their media investment.”
Only 10 product categories experienced growth in August, with insurance the best performing (up 33%). Automotive reported an 8.5% decline, and retail was down 14.8%.
For the year to August, automotive is back 3.8% and retail 0.1%. Insurance leads the pack yearly too, up 8.7%, followed by travel with 9.3% growth.
Brittney Rigby was Mumbrella's deputy managing editor - news and analysis. She left Mumbrella in April 2021.
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SMI’s forecast released just a week ago had its August forecast off in the span of a week; it was forecasting Aug 19 to be on similar level to Aug 18.
Instead Aug 19 is below even Aug 17 numbers.
Even if their initial forecast of industry going back to growth in October, that still puts it on a similar level to October 2016, which SMI have said to be outlier years.
https://mumbrella.com.au/ad-spend-decline-across-every-major-media-for-the-first-time-since-smi-records-began-555290
Instead, last year’s October figures look more on par with the historical trend, with the exception of 2016 and 2017. We’d be lucky if the industry can go back to even last year’s level I think.
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