Ad spend has ‘worst [financial] year in living memory’, and dropped 35.7% in June

The 2019/2020 financial year was the “worst year in living memory” for Australia’s media industry, according to newly-released Standard Media Index (SMI) figures.

The media agency-funded ad spend market fell 14.7% for the financial year, due to the compounded effect of the bushfires followed by COVID-19. In the month of June alone, the decline was 35.7% to $417m, an improvement on May’s whopping 40.4% slide, but worse than April’s 35.3% drop.

Those results led to a quarterly decline of 38.7%, and a 24% fall in first half bookings.

The category results for June. Source: SMI [Click to enlarge]

For the financial year, magazines was the worst-performing format – back 29.3% – followed by newspapers, down 23.3% despite swelling readership numbers throughout coverage of the bushfires and COVID-19. Radio was down 19.9%, outdoor 19%, cinema 16.5%, and TV 15.3% for FY19/20.

The category results for the financial year. Source: SMI [Click to enlarge]

“SMI’s agency partners have already guaranteed ad spend equal to half that recorded in August 2019 – and that data came through before the month had even begun – with the hair and oral care categories, parts of the pharmaceutical market and technology sector already reporting higher media bookings than for August last year,” managing director AU/NZ Jane Ractliffe said.

“And we can see that retailers have already committed to spend more on television in July and August than was spent last year, and the outdoor media is also rebuilding with the level of confirmed bookings from the utilities category for July and August already above that seen at this time last year.”

SMI’s Ractliffe

For the first time ever, the travel sector has dropped out of the 10 largest categories for ad spend this quarter, due to COVID-19’s decimation of the industry. Political party and union ad spend fell 88% in the quarter due to the comparison with last year’s federal election, and investment in the movies/ cinema/ theme parks category nosedived by 92%; the pandemic has shut down the sector.

Domestic bank spend fell by only 2.7% in the quarter, upping investment in TV and radio, and the ‘in home entertainment’ category was back 3.7% but increased digital and TV spend.

“While the market certainly looks to be picking up, the data underscores the truly awful period that Australia’s media industry has endured,” Ractliffe said.

“Never before have we seen a situation where all major media have reported significant declines in ad spend in the last month, quarter, half year and financial year as such large product categories significantly reduced their media investment.”

Other markets also experienced significant declines in June, including New Zealand (-32.7%), the UK (-44%), the US (-20%), and Canada (-37%). Ractliffe reasserted that a slow climb will begin now the industry has bottomed out.

“All markets are clearly suffering from the impact of COVID but as we track the changing market trends it’s also clear that within certain categories some media are managing to achieve growth,” she said.

“It remains a challenging market but the data proves we’ve moved off the bottom so the question is now how quickly the market returns to growth.”


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