SMI data shows ad spend fell 35% in first full month of COVID-19

The first ad spend figures for a full month of the COVID-19 pandemic lockdowns have been released by the Standard Media Index (SMI), showing a drop of 35.4% in media agency advertising expenditure across the board.

The fall equates to $331.13m of spend, but forward pacing data from the measurement body shows June may be the next time the industry sees improvement.

SMI ad spend data for April 2020 [click to enlarge]

The only industries to deliver positive results were domestic bank ad spend which saw a 16% increase and government spend, excluding federal government, which experienced a 20% rise.

SMI AU/NZ managing director Jane Ractliffe said the level of decline is almost twice that seen during the depths of the global financial crisis.

“Australia’s advertising economy suffered the full force of the COVID impact in April as it was the first full month in which our economy was in partial lockdown,” she said.

“Large categories such as travel advertisers simply stopped most of their spending due to the COVID restrictions – travel alone cut ad spend by $20.2 million – and the closure of all cinemas had a double impact as firstly there was no ad spend into cinemas and that in turn had a second impact as those businesses themselves stopped advertising and that saw the cinema/theme park product category report the third largest dollar decline this month (-$16.3 million, or back 86%).”

GFC ad spend data vs COVID-19 data [click to enlarge]

“Clearly this decline is far larger and was also more sudden than the GFC which evolved over a few months. In contrast, the COVID lockdowns occurred within weeks of the virus’ potential danger being realised, so it’s had a more devastating impact on media which had no time to prepare for such an extreme loss of revenue,” she said.

SMI is predicting May will also see a similarly reduced spend, particularly due to the suspension of live sport which has only just returned. But June shows some positivity, said Ratcliffe, with 32.5% of the value of June 2019’s ad spend already guaranteed for the month.

“We can already see in June that product categories such as health insurance, online media and savings/deposits have already guaranteed to spend more on advertising in June 2020 than they did in June 2019 so there’s clearly some green shoots already in the market,” she said.

April’s result means the market for January to April has fallen 14.8% and 9.3% for the financial year-to-date.


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