Ad spend dropped to 10 year low in February, says SMI

February saw the softest advertising demand in almost ten years, says the Standard Media Index (SMI).

While February 2018 experienced a record high, February 2019 saw a decline of 8.3% to $482.9 million, the biggest drop recorded in the SMI database since April 2009.

February’s SMI numbers

Negative demand has only occurred five times in SMI’s 12 years of data history.

SMI said February 2018 was a record-breaking month due to one-off events which included the Winter Olympics broadcast and an increase of 56.6% in domestic bank ad spend in the lead up to the Financial Services Royal Commission. There were no similar drivers for this February.

Accordingly, all major media reported lower bookings for February, even with the government category of advertising excluded to normalise the results. However, far fewer corporates advertised in February, according to SMI’s new digital client count, decreasing by 17.3%.

SMI Australia and New Zealand managing director, Jane Ractliffe, said that while the lowered bank spend was the primary factor in the slump, softness in categories like toiletries and cosmetics (which has seen a decrease of 24.9% year on year) and media companies (a decrease in 23.2%) also contributed.

“But there are also some positive signs in the data with SMI, for example, tracking ad spend by political parties and unions and in February with the NSW and federal elections approaching we saw this category’s ad spend grow 52.5% to $4.43 million,’’ she said.

“The television media scored the largest share of this investment (43%), followed by radio (19.1%) and outdoor with 14.9% of this category’s media investment.”

SMI stated that despite the result, February saw “some bright spots”, including that:

  • the largest category of automotive brand grew its media investment 7.4%;
  • travel emerged as the third largest category for the first time, driven by ad spend growth from Cruise Lines (+21.2%) and Government Tourist Bureaux (+30.6%);
  • within subscription TV, the direct (non-automated) market continues to grow with its bookings up 16.7% year on year; and
  • regional radio grew the value of its advertising sales 1.1%.

The February result continues a pattern of bleakness for this financial year, with total bookings back 1.2% to $4.56bn. Only digital (+2.6%), outdoor (+6.7%) and radio (+2.5%) have reported any growth.


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