GroupM projects flat media expenditure over the next two years
Australia’s largest media agency group GroupM is projecting flat growth in media expenditure in this market, with the buying group expecting USD$10.8bn to be spent in this market in FY2016, up from USD$10.6bn last financial year.
However, it expects growth in the Australian market to pick up in FY2017 with media spend tipped to lift to USD$11.3bn.
GroupM’s projections also warn that the television sector is likely to see its revenues go backwards, marginally, with a 3% decline this financial year and a 0.5% decline next year.
“The ratings and profitability of the major TV networks will remain an issue as viewing behaviour shifts to video and catch-up viewing,” warns the group. “Measurement of streaming and the evolution of metrics which combine video and terrestrial viewing will become paramount.”
The declaration comes just a day after Seven West Media announced a return to profit but warned of significant declines in revenues next year. The news saw both Seven West Media and Nine Entertainment record double-digit declines in their respective share prices yesterday.
According to the media buying group, video, mobile search and display will be the major drivers of growth, with online video predicted to grow at 27.8% a year for the next two years.
Display and search are projected to growth at 10% and 9%, respectively.
The newspaper and magazine sectors are predicted to see continuing revenue declines with 10% and 14.1% declines respectively, while GroupM is predicting the outdoor advertising space will remain “buoyant” with 5.3% growth.
Radio is expected to be relatively flat this year with 0.9% growth in FY2016 and 3.2% growth in FY2017 due to the threat from the likes of online music streaming sites such as Pandora and Spotify.
“Whilst increased competition from streaming is a factor, radio growth is still predicted as current networks invest in talent, content and social media to remain relevant,” the group notes.
Globally GroupM is projecting the ad market to grow 4.3% with the international ad market pushing through the $1 trillion mark for the first time.
Interesting article. Glad to see predictions are positive for radio in FY 2017. However, they must have missed the Deloitte figures for the financial year 2016 which showed strong growth of 5.88% not a flat 0.9%.
User ID not verified.