Australian ad spending decline continues into February with 8.6 percent dip: SMI
Ad spend in Australia has continued to decline year-on-year due to unusually high levels of spending in 2022, according to Standard Media Index.
SMI said spending in February 2023 declined 8.6 percent to $544.4 million, from the $595.7 million reported in the same period last year.
The company said the decline was largely due to a 50 percent drop in spending from the government, with February 2022 also benefiting from the broadcast of the Beijing Winter Olympics. With the government category bookings removed, the underlying decline in ad spending is at 5.5 percent.
The decline also comes after January’s own year-on-year decline, with SMI reporting a 10 percent decline compared to a strong market the previous year.
SMI Australia and New Zealand managing director Jane Ractliffe said the normalisation of government category ad spend was having a material impact on the ad market.
“Australia’s ad market received an abnormal boost from record high levels of government category ad spend throughout 2022 and that’s now a key reason why we’re seeing softer demand this year,’’ she said.
“It’s having a huge impact with, for example, radio’s decline of 7.8 percent in February transforming into growth of 0.4 percent when government category ad spend is excluded. And the trend will continue until May as the extra COVID-related government ad spend was further amplified ahead of last year’s federal election.’’
Excluding government spend, SMI reported year-over-year increases in outdoor media (17.9 percent) and cinema (50.9 percent) ad spending. TV spending however was impacted by the Olympics broadcast last year.
Ratcliffe emphasised the unusual size of February 2022’s ad spend total, which was $30 million more than the next strongest February month in 2019 and more than 10 percent more than the February 2021 total.
“This trend of huge prior year months will also continue into March as the market reported yet another record high for that month with the total up 12.1 percent on the March 2021 total and 4.1 percent higher than the previous record March set in 2019,’’ she said.
Countering the declines from government spending are increases in spending from automotive brand advertisers (up 6.5 percent year over year) and travel (10.3 percent).
SMI maintains the market remains strong over the eight months of the financial year with total bookings lifted 1.5 percent on the same period last year.
Year to date, the three largest product categories have reported higher ad spending, with retail up 6.6 percent, auto brand up 16.9 percent and insurance up 7 percent. Travel has also secured sixth place, after delivering an 80 percent bump in ad spend.
Earlier this year, SMI said advertising spend in Australia came close to hitting the $9 billion mark in 2022, an increase of 6.9 percent from 2021.
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