Ad spend has kicked off the year on the back-foot, 6.2% down, year-on-year, in January; however, a flat result is expected once late digital bookings arrive at month end.
According to the Standard Media Index’s latest figures, media spend in January totalled $417.7m, with outdoor and radio both up while the regional TV market delivered its fourth consecutive month of growth.
Outdoor was up 10.9% while radio was up a more modest 1.1% and regional TV posted growth of 3.4%.
Theo Zisoglou, Bohemia chief media and investment officer, said he would not classify January as stable.
“Outdoor and radio saw growth which is a continuing trend from last year,” he said.
“What we are seeing is very short lead-time market with late bookings across most mediums, so gauging supply and demand is becoming more difficult and fluctuating throughout the month.”
Zisoglou: ‘Outdoor is seeing benefits of digitisation of key sites’
On outdoor, Zisoglou said the medium is seeing “the benefits of the digitisation of key sites” which has driven three benefits.
“Smaller clients are now also finding outdoor more accessible as they can book for shorter periods or time target and buy more cost efficiently hence increasing the revenue potential,” he said.
“Advertisers no longer need long lead times to get creative printed so this has helped drive some of the demand.”
And thirdly: “Digital sites are also being sold on a loop of four-six advertisers so the outdoor networks have been able to maximise yield on these sites by selling more than one face.”
Ashely Earnshaw, Carat chief investment officer, was in agreement on outdoor’s success.
Earnshaw: TV is not faring as some have feared
“Outdoor as a medium continues to thrive in this market principally through the diversification of digital. The outdoor industry, I would say, has cracked the challenge of digital. It’s one of the mediums that has been able to take advantage of digital. You can see that in the numbers,” he said.
Television – excluding digital – was down 2.2%, year-on-year, while digital posted an interim result of 13.9% decline.
“Television is not faring as some have feared but it’s still in low decline,” Earnshaw said.
Print products continued to see spend decline with newspapers (excluding digital) down 24% while magazines (excluding digital) was down 24.9%.
On print, Earnshaw said: “We look at that and they’re both down, everyone understands that’s an irreversible trend and there’s no surprise.
“But whenever I look at the SMI figures, we always think about the newspaper business as total content businesses and think about the digital assets as well. No new news there, it’s a slow and steady decline there.”
Overall, for the financial year to date (July 2016 – January 2017), the full agency market was flat with bookings was down $1.9m to $4.15b.
For Zisoglou, a flat market is good news.
“At this stage a flat market would be a good result given the economic uncertainty globally around the new US President and also relations with China,” he said.
“It remains unknown what impact this will have on Australia as both are key trading partners so companies will be more cautious on advertising spend.”
Looking ahead, Earnshaw expects 2017 to yield low, single digit growth.
“At this stage of the year we always do a lot of listening to clients. My view overall would be low single digit growth. It’s going to be a long year,” he said.
“It’s going to be a very interesting year, any growth is positive.It’s going to be a challenging year for some.”
January saw two of the market’s largest categories – Automotive Brand and Auto Parts/Dealers/Services – report reduced bookings by 7% and 24% respectively year-on-year.
With the school holidays in January, the strongest Product categories were Movies/Cinema/Theme Parks with ad spent up 31%, year-on-year, while the retail sector was up 10% and technology was up 28%.
Schulze: “Major media has benefited from Retail’s growth, and the largest beneficiaries have been TV (Retail spend +15.9%) and Digital (+27.8%)”
SMI AU/NZ managing director Jane Schulze said: “The Retail category (supermarkets, department stores, discount stores, chemists and office/hardware stores) has grown bookings 17% in the three months to the end of January to $193.3 million while at the same time the Auto Brand category has reduced bookings 7.3% to $156.5 million.
“All of the major media have benefited from Retail’s growth, but the largest beneficiaries have been TV (Retail spend +15.9%) and Digital (+27.8%). And SMI’s Digital sub category data shows most of the growth comes from supermarkets.”
An influencing factor on the January results was one less Saturday in 2017 compared with last year.