Digital leads market recovery with overall ad spend up 2% in December

Ad spend in Australia has recorded another month of growth, as the media agency market continues to show clear signs of post-COVID recovery.

Digital spend continued to lead the way in December of 2020, with a late surge in bookings delivering a 15.9% increase in ad spend in the category year-on-year, contributing to an overall increase of 2% in spend.

SMI December 2020 Ad Spend Trends

Standard Media Index (SMI) reported that the digital sector actually hit a record high for spend in December, reaching $223 million, with monthly national marketer revenues overtaking the television category for the first time.

SMI AU/NZ managing director, Jane Ractliffe said the growth can be attributed to increased interest in social media sites from the market.

“In the past six months we’ve seen increasing demand for Social Media sites as Facebook continue to grow and new entrants such as Pinterest, Snapchat and TikTok, also benefit from the wave of revenues flowing to this sector.”

“In the December quarter most of these groups are averaging growth of more than 25%, and the sheer weight of revenue moving to Social Media in the second half has meant its emerged as one of the very few media sectors to now be reporting growth over this tough calendar year.”

Television itself had another strong month, with an 11% increase in ad spend year-on-year. The category grew by 15.3% in the December quarter, and these strong results mean it declined by just 1.2% across the December half.

Radio has also recovered to a point where the category is bringing in almost the same amount of ad spend as the same period during the prior year, down just -0.4%.

It was less positive for newspapers (-18.4%), outdoor (-24.8%), magazines (-37.4%) and cinema (-74.2%) where ad dollars are yet to start flowing as they did pre-COVID.

Ractliffe said: “There’s now no doubt that the market has moved strongly beyond the COVID ad recession and is quickly rebuilding.

“The evidence is clear as total ad spend for the December quarter is now up 5.4% and we can see that well more than half of all the SMI product categories grew their media investment in this period.

“And our forward pacings data – which tracks confirmed future ad bookings – shows ongoing growth across numerous categories.”

Despite the strong December quarter, the Aussie ad market declined 7.2% overall across the second half of 2020, and 15% when compared with CY2019.

SMI reported that decline totalled $1.1 billion in ad inventory. The biggest decline in spend came from the auto brands (-$226.6 million) and travel (-$241 million) product categories.

Ractliffe added: “There’s no denying the fact the COVID pandemic coming so soon after Australia’s devastating bushfires created a perfect storm for our advertising market and an advertising recession that was completely unexpected.”

“But we can see in SMI’s global data that the same trend was seen in all sophisticated media markets, with an average 32% second-quarter advertising decline across Australia, New Zealand, the US, UK
and Canada.

“So the recovery is not just happening in Australia but is increasingly widespread as marketers adjust to a new `COVID-normal’ consumer environment.”


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