Ad spend falls 7.3% after 2 months of growth, TV takes a hit

The Australian media agency market fell in January, with total ad spend back -7.3% year-on-year following two consecutive months of growth in November and December.

A significant factor was the moving of the Australian Open to February due to COVID-19,  and TV took a significant hit as a result with a -5.3% reduction in bookings and down -2% in overall spend.

Such reduction in TV spend was played into the hands of the continued growth of the digital media sector (+1.8% growth year-on-year), which allowed it to surpass TV as the largest media in national marketer ad spend for the first time.

Social media, programmatic and video sites sectors all continued to report double-digit percentage growth. Digital now holds a 37.6% share, ahead of TV with 37%, with all other media making up 25.4%.

SMI January 2021 Ad Spend [click to enlarge]

Despite the dominance of digital in other markets, the strength of television in Australia has meant that it has taken longer here for pure Digital media agency bookings to rise to the top of the pile.

SMI AU/NZ managing director, Jane Ractliffe, suggested that television would likely return to growth for the rest of Q1, 2021.

“Given the likely return to Television growth for the rest of Q1 it will be interesting to see if this trend lasts beyond a single month, but at least for now the lack of the Australian Open combined with continued digital gains has seen the digital media emerge as Australia’s largest this month.

“Digital media has forever changed Australia’s advertising landscape and has been on a strong growth trajectory for more than 10 years. But it’s worth noting that when digital revenues sold against traditional media content is excluded from this top-line analysis, digital’s share of the total falls back to 32.2%.”

Looking at several other media sectors, radio continues to show its strength, with spend back just -1.8% year-on-year. Newspaper spend was down -16.8%, magazines were down -38.5% and cinema continues to struggle to attract advertisers, back -66.7% year-on-year.

Ractliffe admitted that it was disappointing to see the market come back after two months of growth, but that February demand appears to be in line with the same corresponding reporting period.

“The delay of the Australian Open broadcast was clearly a one-off factor but had a significant impact, and beyond that the market seemed to be pausing for breath after all the marketing activity in the last quarter of 2020.

“But we can see that February demand is already in line with that evidence before the start of the COVID pandemic last year, while for March the total demand is running at four percentage points
above the same time last year while for April demand is already seven percentage points higher.”

Though outdoor spend was down -24.6%, Ractliffe noted that the Posters/Billboards market was already reporting high future ad demand than for the prior corresponding period.

SMI AU Outdoor Posters Sector [click to enlarge]

“And already we can see some strong indications this media is returning with the Retail Outdoor sector reporting another good increase in bookings in January with the total up 21.3% for the month.”

Looking at the 2021 financial year to date, SMI reported that the market is back 6.8%, with the value of Digital bookings up 7.9% for that period.

Meanwhile, product category trends show that government bookings are up 54% for FY21 (largely driven by COVID-related campaigns), while health care spend is up 170% and food, produce and dairy has risen 21% during the period.


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