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June media spend slides as 2016 election takes its toll

The impact of a federal government spending spree in the lead up to the 2016 election has had a massive impact on the year-on-year Standard Media Index spending figures for June, with government spending now appearing to drop 69% on the previous year.

Jane Schulze says media spending figures have been skewed by the 2016 federal election

SMI managing director Jane Schulze said the impact of the election spending last year had also dampened figures for the entire quarter and disguised underlying growth across a number of sectors.

Shulze said an extra $56.6m flooded the market from government departments and political parties in June last year.

Outdoor and cinema remained the areas of growth, with outdoor up 7.4% for June 2017 compared to the same time last year, while cinema lifted 10.3%.

However, spending across newspapers, magazines, radio and television were all down compared to a year ago.

TV dropped 10.8%, but Schulze said that when the impact of government spending was factored out, it was up 3%.

Similarly radio, down 4.5% when government spending was included, dropped just 0.1% when the government spend was taken out of the calculations.

Newspapers (excluding digital) were down 24.7% in June, while magazines dropped 22.6%. Spending on both platforms was only marginally affected by government spend.

SMI media agency spending June 2017. Source: Standard Media Index

The entire June quarter of 2017 shows the market declining 4.8%, but will see it revert to growth of 1.4% once the impact of government spending is taken into account.

Schulze said that overall Australia was tracking towards its fifth consecutive financial year of spending at $7.1b, down just 0.1%, but the figure would improve with the current difference of $10.5m made up when late digital bookings were added in.

“As I said last month, federal elections are like Olympic broadcasts from an advertising revenue perspective and are absolutely abnormal events, and that’s even more apparent this month given the proximity to the date of last year’s fiercely contested federal election,’’ Schulze said.

“So, again, it’s important to look at the underlying result and also the longer-term trends and despite all the tough comparative challenges from last year, Australia’s agency advertising market is set to deliver its fifth consecutive year of record financial year ad spend which underscores the strength of our market.”

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