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SMI: Market braced for softer end to 2016 as major events take their toll on September

Ad spend in September dropped 4.8%, year-on-year, with the Standard Media Index and media buyers citing a lack of big ticket events in the month as contributing factors.

The Olympics sucked ad budgets forward according to media buyers

The Olympics sucked ad budgets forward according to media buyers

Overall the market is up 1.6%, year-to-date, according to SMI, but with the Federal Election, Census and Olympics shifting ad budgets to earlier in the year media buyers are predicting a soft run in to Christmas.

Theo Zisoglou, trading director for independent media agency, Bohemia, said: “I don’t think there will be a massive year-on-year increase, I think it will stay quite stable.”

Head of investment for Dentsu Aegis’ investment arm, Amplifi, Alex Pekish told Mumbrella: “Historically, Olympics has resulted in advertisers pulling budgets forward in the year and often leads to a quieter last quarter.”

Pekish: predicts flat end to the year

Pekish: predicts flat end to the year

He also noted how a new government often meant a quieter year in terms of government advertising, as it bedded in and began to push new initiatives and policies through.

Total media agency spend in September was $616.7m, with outdoor enjoying 5.1% growth and cinema a bumper 74.2% jump from a low base in terms of media agency spend, year-on-year, while the initial report for digital is flat, with late bookings likely to see it rise marginally.

Both Pekish and Zisoglou pointed to outdoor as a success story for the year, hailing its growth on the back of the rapid adoption of digital screens.

However, every other medium was down, with magazines down 14.9%, radio dropping 4.8% and newspapers down 15.5%, although regional papers recorded a 10.1% increase, which has been attributed to higher government spend.

TV also took a blow, with media agency spend for metropolitan free-to-air stations dipping 9.6% for the month, down around 4% for the year overall.

Zisoglou said the trend for TV was “worrying”.

Zisoglou: 'TV drop a worrying trend'

Zisoglou: ‘TV drop a worrying trend’

“Normally, in an Olympics year we see TV pick up about 2% in terms of revenue, but January to September it is down 4% and that’s concerning for them going into next year,” he said.

“Fragmenting audiences mean that in the short-term buyers are having to buy more to achieve the same reach, but over time the market will move away as it makes it more expensive.”

Ten was the biggest winner – picking up 3% in revenue share from rivals Seven and Nine, but still lagging with a 25.24% share of the metropolitan TV pie.

Seven’s share dipped 0.9% to 38.85%, ahead of Nine, which dropped 2.23% to 35.9% share.

Regional TV was relatively less badly affected with a 5.4% drop, and pay TV was down 3.2%.

SMI AU/NZ managing director Jane Schulze said there seems to be a “level of caution” from advertisers in the market: “This caution also seems evident in SMI’s Category data, with only seven of the 40 categories growing their marketing investment by more than $1 million in September.”

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