Glimmer of hope for Q4 ad spend

By Duncan Craig | 17 July 2012

The advertising market will remain in retreat for the current quarter and the most optimistic outcome is for a post London Olympic bounce in the final stanza of the year.

That's the outlook provided by ad executives who responded to the latest data from ad spend data firm Standard Media Index (SMI), which has reported a 3.4% bounce in ad spend in June 2012, compared to June last year.

The ad tracking firm said that total media agency spend in June rose 3.4% to $667.9 million, compared to the same month last year. Not surprisingly, digital led the way with a 23.6% jump, followed by television, up 3.1%. Magazines slumped 13.4%, and newspapers slid 4.1%.

“A lot of spend has bypassed the Olympics, so we expect to see strong activity in the final quarter of the year,” said Kurt Burnette, chief sales and digital officer at Seven Media Group. “The bounce will happen in the television, magazine and newspaper markets.”

Burnette said the signs for an immediate lift in advertising spend across the board were not strong, but the numbers were “not falling off the cliff.” He said the the video segment would continue to experience an upsurge as advertisers increasingly invested in that platform.

Nine Entertainment Co. group sales and marketing director Peter Wiltshire said the second half of the year would be split into two, consisting of the London Olympics where some advertisers seek to dominate channels, and others simply hold back their spend.

“I do think we are heading towards a stable final quarter of the year,” Wiltshire said.

Looming over the market is the ongoing crisis in consumer confidence, which has some observers questioning whether the sluggish climate can be corrected this year.

“There is just not enough confidence out there for people to spend their disposable income,” said Henry Tajer, executive chairman of IPG Mediabrands. He added that it was becoming harder to pick shifts, trends and events,and the underlying trend remained negative.

“The ups and downs in ad spend are not correlating and not balancing out,” said Tajer. “The market is lumpy and flat, and one channel can be up in one month, and down the next.”

Others are suspending any prospects for growth until the new year begins, and don't see the Olympics playing any major part in the equation.

“I don't see any green shoots of growth in the next few months,” said James Parkinson, head of trading at Group M. “Our expectation is for growth beginning in the January to June 2013 period and the final quarter will produce marginal growth.”

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