Food and drink advertising is media industry’s best hope of avoiding decline, says SMI
The media industry will only avoid a media recession for 2017 if the alcohol, food and credit card categories deliver a boost in spending over the final three months of the year, spending yardstick Standard Media Index has warned.
The comments from SMI as the media sector continues to struggle with declining ad revenues.
However, if the advertising patterns of last year are followed then television, digital and outdoor could see improvements in the last quarter of this year, said SMI’s boss Jane Schulze.
Schulze: Will food and drink get Aussie media out of its hole?
SMI reports the first eight months of 2017 Australia’s media market saw overall ad spend decline $113.4 million, or 2.5%, on the same period last year.
September’s data will be revealed next week.
“The Food/Alcoholic Retail category really drove the market’s growth at the back end of 2016 by investing an extra $34.8 million in advertising in the fourth quarter alone,” said Schulz, SMI’s co-founder and Australia/NZ Managing Director in a press release.
“In 2017 we can see that category is already the fastest growing in dollar terms but the level of overall investment is less with the sector increasing ad spend by $29.7 million over the whole eight months of this year,’’ she said.
The credit card market appears to be also following 2016 patterns, SMI suggests. So far this year the industry’s ad spend has fallen 3.2% compared to last year and may indicates marketers are preparing for a similar end-of-year advertising push.
“In the fourth quarter of 2016 the Credit Card category was the second fastest growing after Food/Alcoholic Retailers with its actual ad spend lifting $12.2 million, or by 53.1% from the year-ago quarter with the bulk of that extra investment being directed to the Digital, which was up $6 million, and Television media, up $5.6 million,’’ Schulze said.
“But for the first eight months of the year its ad spend is back 11% so if that pattern recurs in 2017 it will ensure another strong burst of media investment at the end of this year. If these trends continue, Television, Digital and Outdoor will be looking at a windfall in the final quarter of 2017 for both categories.”
| SMI CYTD % change of Categories growing by highest dollar value | ||
| Product Sub Category | Growth | Variance |
| Food/Alcohol Retailers/Shopping Malls | $29,788,367 | 16.60% |
| SUV | $25,828,316 | 35.60% |
| Discount Stores/Online Retailers | $23,703,229 | 88.20% |
| Insurance Brand/Sponsorship | $15,876,996 | 45.30% |
| Cruise Lines/Rail/Other | $11,321,486 | 33.70% |
| Computer Software /Services | $10,758,256 | 36.30% |
| Milk/Dairy/Produce/Baked Goods | $10,166,298 | 19.90% |
| Restaurants | $9,928,091 | 5.60% |
| Auto Brand/Sponsorship | $9,860,045 | 3.90% |
| Beer Imported | $9,511,787 | 75.00% |
Schulze said the categories of Discount Stores/Online Retailers, Micro/Small Cars and Auto Insurance seem to be following the same pattern with significant declines in ad spend in the first eight months of the year and huge fourth quarter growth.
“Discount Stores/Online Retailers reported a 38% fall in ad spend in the first eight months of 2016 but it’s clear the marketing budgets were being saved for a strong fourth quarter push as in that later period total ad spend soared 25.8%.”
“On an even grander scale, the Micro/Small Car market had reduced 2016 CYTD ad spend by 5.4% before growing its market budgets by 96% in the fourth quarter,” concluded Shultz.
