Ad spend declines for 17th month in a row

The media agency-funded ad market was back 5.3% in February, an improvement on January’s 8.2% decline that suggests the market was beginning to stabilise before the COVID-19 outbreak, according to Standard Media Index (SMI).

SMI’s AUNZ managing director, Jane Ractliffe, said that the impacts of the pandemic means February will be the last ‘normal’ results the market sees for the indefinite future.

“Already we can see in Australia that in March there’s been large increases in spending from the categories that are more likely to benefit from a lockdown environment, such as In Home Entertainment, Food, Toiletries/Cosmetics and Health Care,” she said.

“But the market is obviously making huge adjustments given major changes such as the loss of sporting events and the large movement of audiences, so we will continue to deliver our Special Ad Spend Updates to get the latest ad spend trends to the market as soon as possible.”

The 17th consecutive month of decline saw a drop in bookings across all major media, but the formats that fared best were digital (-0.9%), TV (-1.6%) and radio (5.4%).

However, Nine’s Australian Open coverage (broadcasting into February this year instead of just January in 2019) brought 1.9% growth to metropolitan TV. Regional radio grew 7.8%, programmatic rebounded to be up 9.8%, and social sites were up 6%.

Once again, February’s local results were in stark contrast to the New Zealand market, which grew 2.4% – its second consecutive month of growth.

“New Zealand’s media has now reported two consecutive months of growth so is entering their coronavirus lockdown in a stronger position, and we can also see in our NZ future pacing data the market will also be strong in March,” Ractliffe added.

“But at least in the Australian market we can see the decline has been reducing, with this 5.3% fall below the 6.1% decline we’re reporting across the eight months of this financial year.”

This month, SMI has also created an Industry Media Index which pulls together ad spend data from media industry associations.

On a like-for-like basis, the total market was back 1% in the 2019 calendar year to $16.6bn.

For the first time, however, the combined agency and direct ad spend figures also include spend for the catalogue, inserts and direct mail media, thanks to SMI’s exclusive deal with the Real Media Collective – made up of the former catalogue and printing industry associations – to collect and publish its data. Across all major media, this segment has emerged as the fourth largest, with $1.4bn in ad spend in 2019.

With the Real Media Collective figures included, the local market hit $18bn in value in 2019.

The Industry Media Index. Source: SMI. Click to enlarge

“Given the drought, fires and floods last year it’s unsurprising to see the value of the total Australian market fall in 2019 as these events always affect business confidence which in turn hurts advertising demand,” Ractliffe said.

“But in these difficult times we’re still trying to deliver improved advertising metrics so it’s been fabulous to work with the Real Media Collective to collect catalogue, inserts and direct mail ad spend and we hope to continue improving this service moving forward.”

Last week, SMI responded to the COVID-19 crisis by launching a range of new features, including a newsletter, extra details in SMI reports on the impact of COVID-19 on product categories, and releasing future pacing data earlier to clients.


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