TV and election spending continues to drive bumper ad spend numbers
Advertising spending through Australia’s media agencies has continued to grow strongly. But can it sustain such strong numbers exhibited at the start of the year?
The January spend of $555.6 million is 15.4% up on Jan ‘21 and is still +5.1% ahead of the pre-Covid January 2019 total.
The July ‘21-Jan ‘22 period is 16.1% up year-on-year, and has for the first time surpassed the $5 billion mark. 2021 was up 6.8% on 2019 and this trend has continued into 2022.
Steve Allen, director of strategy & research at Pearman Media, told Mumbrella there are two things particularly driving these big ad spend numbers in January.
“One – television is doing very well, and that’s due to the Australian Open moving back to January; and two – governments of all colours have been spending like there’s no tomorrow – particularly the Federal Government,” Allen said.
The latest Pearman Media release adds: “It feels like a broken record, but the Government spend has once again supported much of the growth. It accounts for 23% of the additional spend and the Government increased its year-on-year January spend by 51%, spending $51m in Jan’ 22.
“It is a safe bet that these increases will continue until April ‘22. Other categories to increase by +30% were Insurance, Home Furnishing/Appliances and Communications. Automotive was a disappointment for the month as its spending declined -18.2% compared to Jan ‘21. Healthcare was another category that reduced spending substantially, spending $11 million less than last January.”
Television increased 18.9%, and this can be expected to continue throughout February and March, Allen said.
Digital spending increased by 18.7% with social media reporting the strongest growth of any digital sector. Outdoor continued to get “back to normal” and cinemas had a good start to the year with an 81.1% increase, although it was off a small base.
January 2022 was a little disappointing for radio (-0.1%), newspapers (-8.6%) and magazines (-6.5%) as they all had reduced spending. The newspapers and magazines’ SMI data now include their digital spends within the medium.
“The market is good, with some big distortions in there that will not be replicated for other months, or the entire year,” Allen told Mumbrella.
But he said while January was a unique month, 2022 is going to be a growth year. He said digital was “going like a rocket in all its forms” as it continues to post double-digit growth.
Chris Walton, managing director of Nunn Media agreed, saying: “There was a growing sense of optimism and momentum from last year, when Omicron wasn’t on the horizon, things were starting to open up, Ukraine and the floods were not on the radar.
“It was a different environment, things were pretty positive and most sectors were coming up,” Walton said.
Walton believes the long lead times required to commit to advertising meant plans had already been signed off for January and people were on holiday in a positive mood.
He doesn’t believe, however, there will be a significant drop-off in February ad spend figures.
“No, I don’t think it will (drop off). For a lot of brands, February is like the start of the year. TV has been, and continues to be, bursting at the seams – if you are not already booking for May and June, you’ve missed the boat,” Walton said.
Walton argues the situation in Ukraine has less of an impact on Australian ad spend than the local floods, particularly where short-term budgets may be used to offer practical and supportive messaging.
He said the Federal Election (tipped to be held sometime in May this year) is “always an interesting fillip”, where advertising gets a shot in the arm from various lobby boards.
Radio ad spend surprised Walton, but he said TV and digital “continue to motor”, while Out Of Home is bouncing back year-on-year, and cinema did well.
Walton believes the big sporting events – the local T20 cricket World Cup and the FIFA World Cup which often spawn local programs via global partners with local broadcast partners – these will prop up the back end of the year in terms of ad spend.
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