April ad spend drops 7.6% from last year’s record high

The Australian ad market suffered a 7.6% decline in April to $522m, compared to last year’s record-breaking ad spend driven by the Commonwealth Games, according to the Standard Media Index’s (SMI) latest report.

The Commonwealth Games last year and timing of the Easter and Anzac Day public holidays this year, combined with a high-level of business caution in the lead up to May’s federal election, meant that more than a third of SMI product categories reported a drop in demand. This was led by domestic banks, which reduced ad spend by 35.5%, driven by unusually high demand last year during the Financial Services Royal Commission. The two largest categories, retail and automotive, also saw significant April declines of 7.1% and 21% respectively. 

The federal election, held on 18 May, meant that April saw a strong level of ad spend from political parties, industry associations and unions, with its total skyrocketing by $16.3m to $18m – although this figure doesn’t include the Clive Palmer-fronted UAP’s $60m spend on election ads, given the party purchased all advertising directly from media groups. SMI doesn’t track direct bookings, but measures those placed through media agencies. 

TV ads made up the bulk of election ad spend, but newspapers and radio saw large category gains that meant they enjoyed year on year growth. Magazine bookings dropped by 24.9%, the worst of all mediums. Television was down 10.3% on April last year. 

SMI ANZ managing director, Janes Ractliffe, said SMI’s decision to create the ‘political parties/industry associations/unions’ product category last year was a big step. This category was previously absorbed into the broader ‘government’ category.

“This data is fascinating as it shows a significant 20.8% decline in spending from this collective group on major media in the lead up to the 2019 election compared to their ad spend in the four months leading up to the 2019 election,” she said.

“And there’s also been significant changes as to where this group allocates its media spend, with television’s total reducing in favour of higher spending on radio, newspapers and the digital media.”

Since creating the category, SMI has been tracking political ad spend, and this is the first time it has been able to compare how ad spend has changed in the lead up to the 2016 and 2019 elections.

The advertisers tracked include the state and federal offices of the Liberal Party, Labor Party, Greens, Nationals, and Centre Alliance, along with union campaigns including Change the Rules. Again, it does not include Clive Palmer’s UAP, since it purchased all advertising directly.

There was a drop in ad spend in the lead up to the 2019 election when compared to 2016, but also a significant change to the media mix. Television lost share to radio (up 16.9%), digital (up 9.8%) and press (up 79%).

These figures will be updated to reflect the final weeks of the election campaign in June when SMI’s May ad spend data is released.

April’s result pushes SMI’s calendar year results back 4.3%, with growth in radio (0.3%), digital (0.1%) and subscription TV direct (11.8%). For the financial year to date, the market is back 1.6%, with outdoor delivering the best growth of 5% (with digital up 2.4% and radio up 2.3%).

However, April 2019 came in 2% higher than April 2017.


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