SMI: Industry in shock as agency bookings for digital fall 5%

By By David Blight | 16 August 2012

UPDATED: While media agency bookings fell 7% in July according to Standard Media Index (SMI) figures, the industry has been more shocked by the 5% year-on-year drop in digital.

The 7% drop in agency bookings was led by a 29.5% contraction in newspapers, as the print industry continues to face major structural problems, but it was the drop in digital bookings which drew the most interest.

Just days after the Interactive Advertising Bureau of Australia heralded news of the digital industry passing the $3 billion mark for the last financial year, SMI has released numbers showing a 4.7% drop for digital agency bookings in July.

Experts have either expressed surprise or suggested the drop is most likely an anomaly and nothing to be overly concerned about.

OMD chief executive Peter Horgan told AdNews the result was an “anomaly”.

“It's worth further examination, but it is most likely an anomaly.”

July 2011 saw nearly 30% year-on-year growth over July 2010, so it was one of the strongest growing months of the year. In other words, July 2012 has declined on last year because the month in 2011 was particularly strong.

Horgan said if you compare July 2012 with July 2009, you see around 50% growth.

“Some might suggest it is because money has moved out of digital into more traditional media because of the Olympics, but if you look at the television market it hasn't grown, so I don't think you can draw that conclusion,” Horgan said.

Another media buyer, who preferred to remain unnamed, said: “That number is very surprising. I don't even know if I could give you a reason as to why that is.”

A source told AdNews Google and Facebook saw major increases of around 25% year-on-year for July, but drops were seen in digital by Yahoo!7, News Limited, Fairfax and Microsoft.

Meanwhile, the total market dropped 7% in July.

Ikon Communications national chief executive Dan Johns said the drop was largely due to the Olympics, as brands not involved in the event took their money out of media channels.

Meanwhile, television dropped 1.3% in total, with metro free-to-air falling 4.3% and subscription increasing 16.8%.

Magazines fell 18% while newspapers declined 29.5%.

SMI figures only cover media booked through media agencies.

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