‘Unprecedented number of negative events’ drive ad market down for first time in six years

The media agency-funded ad market has ended a difficult 2018/19 financial year, down 1.4% against 2017/18’s record result to end on $6.93bn. According to the Standard Media Index (SMI), the second half of the financial year drove this drop, falling 2.9% to drag down the total financial year’s results for the first time since 2012/13.

The Royal Commission, Commonwealth Games, and various by-elections and state elections were behind last year’s record ad spend. In contrast, the 2018/19 year was plagued by a lack of business confidence, political uncertainty globally and a tighter post-Royal Commission credit market.

Despite the overall results, record levels of spend were experienced by digital (+2.7%), radio (+1.7%), and outdoor (+4.5%). In addition, 10 product categories saw record ad spend, led by the political parties/unions category thanks to this year’s federal election, which doubled ad spend to $101.4m.

Retail moved above $700m for the first time, and travel grew to more than $400m, while auto, consumer electronics, utilities and home furnishing/appliances also achieved record levels of spend.

Digital outdoor accounted for 53% of all outdoor bookings for the financial year, while in the digital category, video format spend became 20% of the digital category’s value for the first time.

June’s market was back 1.5% to close out the financial year, thanks to a lower-than-expected level of late digital bookings (-1.9%).

Outdoor was the best performer in June (+7.3%) although metropolitan TV bookings also saw a gain of 1.8% (excluding SBS’ results to normalise the outcome given last year’s football World Cup broadcast).

Auto, retail, insurance and travel saw record ad spend in June, offset by significant declines in gambling, domestic banks, and food/produce/dairy.

SMI’s AUNZ managing director Jane Ractliffe said there was lower demand for the month of June, June quarter (-2.8%), first half of the year (-2.9%), and also the financial year.

“As SMI’s data history has shown, it’s very unusual for the agency market to not grow and it’s taken an unprecedented number of negative events to deliver this knock. But we’re seeing numerous local and global issues come into play at the same time which have had the combined effect of significantly reducing business confidence and therefore ad spend,” Ractliffe said.

“At least in June we are starting to see improvement as the 1.5% decline is the lowest reported since November last year when you exclude the month May given the abnormal election impact that month.”


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