Magazines suffer 42.5% decline in ad bookings, with newspapers not far behind

Print media kicked off 2018 with a dramatic decline in ad spend from media agencies, new Standard Media Index (SMI) figures reveal.

Magazine ad bookings are well down on January 2017

Print magazines were the worst hit, with bookings falling 42.5%. Magazines’ digital properties also suffered a 40.5% decline, compared to January 2017. Newspapers didn’t fare much better, falling 36.4% in print and 27.6% in digital.

Digital bookings exclude programmatic ads and data for late bookings is not yet available, with SMI AU/NZ managing director Jane Ratcliffe (nee Schulze) telling Mumbrella there has been an unusually high level of late bookings due to so many agency employees taking time off in January.

Ratcliffe further explained the decline by noting there was one less Sunday in January 2018, compared to January 2017.

The toiletries and cosmetics industry also normally spends more with the sector, Ratcliffe said.

Overall, including print and digital, magazine ad spend fell 42.1% and newspapers declined 34.1%.

The magazine sector conceded it had been a rough start to 2018 and noted it had to improve its agency relationships.

Nicole Bence, commercial Director at Pacific Magazines said: “There is no doubt it wasn’t a good month for publishers, and we have to do better as an industry and as Pacific to prove the effectiveness of our media, and that’s exactly what we are focusing on,” she told Mumbrella.

“The reality is we are in an increasingly performance-based marketing environment, and at Pacific we are working hard to show that our trusted brands can move the dial on the metrics that matter, combining brand building with actual sales uplift. We’re seeing success with this in digital, where despite the reported January result, year-to-date we are up year-on-year.

“We also have to balance these results with non-SMI revenue, which now forms half of all of our revenue and is stable year-on-year. We need to, and will, translate that performance to our agency partners.”

Bauer Media too recognised it needed to improve its relationship with agencies.

Paul Gardiner, Bauer Media sales director, said:”We don’t believe that these figures represent an accurate overall snapshot of our business. Our direct revenues continue to grow and magazine readership is actually increasing over the summer period.

“We recognised there is a problem with agency revenue and have been working closely with our partners to turn this around. We have updated our agency structure in December to ensure that service levels remain high, and we have also recently launched our Story54 brand entertainment division to deliver better customer solutions.

“Bauer Media has strong forward bookings and a robust growth strategy for 2018 and beyond.  Our clients will be seeing a very different proposition for our magazine brands over the coming months “

The newspaper industry, however, was more dismissive of SMI figures, pointing to direct bookings, which it says accounts for 50% of newspaper and digital news media advertising revenue.

Peter Miller, CEO of NewsMediaWorks told Mumbrella direct advertisers have not been persuaded by arguments that spend should be directed away from print.

Miller: Direct advertisers are committed to newspapers

“Rather, they are persuaded by what happens when they advertise white goods; FMCG; cars; financial services; mobile and travel offerings in our papers. What happens is sales go up,” he said.

The December quarter, he said, only saw a 4% downturn in direct advertisers’ print spend.

“So direct advertisers have a virtually unchanged commitment to newspapers. And consumers have a virtually unchanged commitment to reading newspapers. So that leaves only media agencies reducing spend, or recommending a reduced spend in press, he said.

The divergence, he said, was puzzling.

Digital ad bookings were also hit by the January 2018 lull, falling 20.1% (interim result) from bookings during January 2017.

Traditional radio fell 3.4%, with digital radio also falling 8.3%, excluding late bookings. The overall radio category thus declined 3.6%.

The only categories to avoid what SMI is calling a “cautious” start to the year were television, cinema and outdoor. Outdoor edged up by 0.3%, while television climbed 1.3% overall (after a 1.3% climb in traditional television and a 0.6% decline across its digital assets). Cinema jumped 37.9% from January 2017 to January 2018.

Media agency bookings by media type (Click to enlarge). Source: SMI

The SMI release also highlighted the strong performance of television in the metropolitan markets, which climbed 5.1% to record its best January result in three years.

Despite a decline in retail ad bookings (down 15.5% in January) and an unexpected drop in travel bookings (down 18%), which Ratcliffe attributed to a significant drop in spending by airlines, government and gambling spending both increased. Two state elections helped lift government ad spend via agencies 13.8% to $14.6m, while a number of sporting events (The Ashes, Australian Open and the Big Bash) gave gambling organisations the impetus they needed to spend an extra $13m via agencies (an increase of 29%).

“The overall retail figure masks ongoing growth in ad spend from discount stores and online retailers who have collectively grown their January spend by 32% to $6.7m to emerge as the second-largest retail sub category,” Ratcliffe explained.

“And interestingly, most of that extra media investment is being directed to television, with those advertisers more than doubling their TV ad spend to $3.6m to give TV 55% of the category’s total investment. In contrast, these advertisers spent just 26% of their media budgets on digital in January.”

The interim result for January 2018 shows an 8.1% decline in agency ad bookings, with agencies spending $425.3m over the month.


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