F.Y.I.

Advertising budgets grow by 6.8%

National advertisers have increased their ad spend by 6.8 per cent – Starcom’s Media Futures survey has found.      

The announcement:

Media Futures mid-year update finds ad revenue bounces back strongly

September 20 2010: National advertisers have seen their actual advertising expenditure jump by 6.8 per cent in the first six months of 2010, exceeding their full year predictions already after a bleak 2009 for advertising revenue in main media.

Starcom MediaVest Group’s annual Media Futures survey has conducted a mid-year update for the first time ever, which has revealed that advertisers have shrugged off the global economic crisis to record strong increases in advertising expenditure and predictions for equally strong growth in the second half of 2010.

At the end of 2009, advertisers predicted that the Australian advertising market was set for strong growth, with their expenditure set to grow by 5.3 per cent. That optimism has been justified with advertisers reporting that their actual ad expenditure rose by 6.8 per cent in the first six months of 2010.

In addition, 45 per cent of national advertisers reported a year on year increase in actual expenditure compared to the first six months of last year. Among those who have seen an increase in advertising spend in first six months of the year, the majority have seen increases of 20 per cent or more, with the average increase being 31 per cent.

“Given that the global financial crisis during 2009 impacted advertisers and mainstream media so badly, we decided it would be interesting to see, for the first time since our Media Futures report was launched in 1985, if advertiser predictions for 2010 had come to fruition in the first half of the year,” Starcom MediaVest Group CEO John Sintras said.

“The Media Futures report released last December predicted that advertisers would quickly turn around from a mood of uncertainty to return to strong expenditure growth for most sectors of the media. This mid-year update has shown that turnaround even in the first half has exceeded advertisers’ full 2010 year predictions.

“This gives a very accurate indication that 2010 will be an exceedingly strong year.”

Predicted versus Actual advertising budget change for 2010 (year on year increase)

Free-to-air television has been the main beneficiary of increased ad expenditure in the first half of this year, with almost 6 in 10 advertisers significantly increasing their TV budgets. Online continued to be a strong performer, with 50 per cent of advertisers significantly increasing their online spend (including search and display).

Media expenditure has been reduced in newspapers, with just under six in ten advertisers significantly reducing their spend, and magazines also received less budget from around 40 per cent of advertisers.

The Media Futures mid-year update also asked national advertisers to predict expenditure for the second half of 2010. Advertisers predicted that advertising expenditure would rise by 6.4 per cent.

Almost half (45 per cent) of national advertisers expected their budgets would increase compared to the last six months of 2009, while 39 per cent said their budgets would remain steady. There would be an average increase in budgets of 29 per cent.

The Starcom Media Futures survey was launched in 1985 and is one of Australia’s most authoritative predictors of expected advertising budget growth over the coming year, and is the only survey of its kind of national advertisers and key media executives around the country.

The survey is conducted by Roy Morgan on Starcom’s behalf via both telephone interviewing and online methodologies. Respondents from the original survey, drawn from Australia’s top 100 advertisers, were reengaged to participate in the mid-year update.

Source: Starcom MediaVest Group press release

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