Greek crisis will not dampen positive advertising market outlook according to media buyers



As the 2014-15 financial year wraps up major Australian media buyers are positive about the state of both the global economy and also the local advertising market, despite the current economic headwinds caused by the Greece debt crisis.

“The headline is really it’s a healthy marketplace,” Henry Tajer global CEO of IPG Mediabrands told Mumbrella. “On a broader market level we are expecting four percent growth – that’s consistent at around three and a half to four percent over the five years.

“Our view is that we are projecting growth over the next five years and that is in line with what we are seeing happen in the Australian marketplace.”

Other senior media buyers noted the consistent growth being recorded in the paid media market through metrics such as the Standard Media Index (SMI), which showed media agency spend in May cracked the $3bn mark leaving the market on track to report a record spend for the second half of the financial year.



ZenithOptimedia CEO Ian Perrin said: “I think there is much more business confidence in market right now.

“What we are seeing in the market is clients definitely spending more on new innovation projects that they probably have been planning for some time. Whether that be a campaign, new product launches etc. we are definitely seeing a lot more strength in the advertising economy out there. Even beyond the above the line media spend.”

Other media agency bosses noted that while the economy was travelling ok some of the results were “patchy”.

Chris Walton, Sydney head of independent agency Nunn Media, pointed to recent figures which showed a sharp decline in banking spend and rise in automotive as showing inconsistent results between different sectors. 

“I would sum it up by saying it is patchy,” said Walton. “When you look across retail, banking/finance etc. there is no clear trend where one is up and one is down – even within categories there are people doing very well and others who are struggling.”

ZenithOptimedia’s Perrin said the current mood was a major improvement on last year’s post federal budget economic climate, which saw consumer confidence tank.

“The budget last year was nothing short of an absolute political catastrophe and that created political uncertainty which trickled down to consumer uncertainty and therefore people were spending less money,” he said.

“You also have the challenge of Europe and what is going on there and you have to remember that most of the advertising dollars in Australia still come from companies that are headquartered overseas,” he said, noting the ongoing Greece debt crisis in the Eurozone which has seen billions wiped off stock markets worldwide.

Mediabrands’s global boss Tajer downplayed this risk arguing the broader impact, outside of Greece, on European growth and the wider global economy would be minimal.

“The Eurozone still remains a very sensitive economy on a global basis but when you deconstruct Europe into the various markets you see the likes of UK, Germany and France – which is starting to show a little bit of growth – we are starting to see a little bit of positivity through the larger economies,” Tajer said.

“Greece as it relates to the broader macro-zone has broader implications, but once resolution on the Greece question happens the broader marketplace will role on. ”

He added: “On a global level what I’m seeing in the markets we operate in, together with our global forecasts, is a global market that continues to grow.”

According to SMI, the ad market has grown consistently for the past five months and also posted positive results in September and November.

The financial year to May figures show television spend down 1.5 per cent to $3.2bn, a fall of some $50m on 2013-14, newspapers were down 10 per cent to $697m, a fall of $77m while magazines were down 11.9 per cent, down $30.5m.

The winners were digital up 17.4 per cent in the year to May to $1.4bn (an increase of $220m),  outdoor up 15.5 per cent ($95.3m) and radio up 9.7 per cent ($47.1m).

ZenithOptimedia’s Perrin added: “People are seeing strong property markets not just in Sydney but across the country. I think interest rates are low and I think there is a lot more business confidence than there was 12 months ago.

“Can we expect it to continue? We are certainly seeing from a lot of our clients that they are spending more money and investing in more projects. We are seeing the boost is not a blip, it’s a trend and that trend will drive spend particularly in digital and analytics, we see it as a strong market for the next six months.”

Tajer agreed saying: “Australia is one of the key global markets in terms of sentiment/indicators. Whilst it might not be in the top five markets from a size perspective it is definitely in the top five for a directional/change/evolution sense.

“Everyone who operates in the space is looking at Australia as an indicator market and the it very much aligns to what we are seeing globally.”

Nic Christensen 


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