The Australian media agency market saw a “significant downturn” in October, declining by 10.2% according to Standard Media Index (SMI) figures.
The latest figures show a weakened sector, but are comparable to last year’s Same Sex Marriage debate and the previous
year’s AFL/NRL Grand Finals which were abnormally high comparative periods.
The SMI uses data sourced directly from advertising agencies' billing systems that is then aggregated to show the combined media agency ad spend across all major media in Australia.
Despite the fall in bookings, the market remains at record levels with total bookings up 2.4% at $6 billion due to a growth in the first half of the year.
The softer October demand has set up the 2018 year to be one of two halves, with the market growing 5.5% in the first half of the year, but in the current financial year it’s back 1.8%.
“While the lower bookings seen this month are disappointing, the reality is that the market has returned to normal growth trend levels as seen in the SMI over at least the past nine years,” SMI AUNZ managing director Jane Ractliffe said.
To better illustrate the changing trends, SMI has produced a chart which shows how the October months in 2016 and 2017 were abnormally inflated by extra advertising relating to the Same Sex Marriage and that associated with football finals.
Ractliffe said when Government Category bookings are removed to show the underlying trends given the recent removal of the Federal government’s ad spend from the data, the trend remains consistent with the total market back 9.1%.
Cinemas and the newspapers were the hardest hit by the lack of demand in October, declining 40.9% and 20.8% respectively. They were followed by magazines, which saw a 16.4% decrease in its year on year bookings.
The majority of SMI's product category also experienced a decline, with only 11 of the 40 categories delivering growth in ad spend in October.
Food, produce and dairy products saw the biggest drop in ad spend, along with domestic banks. While, the only positive growth came from a surge in spending by retailers, home furnishing and the appliance sector.
GroupM's ad spend forecast predicts ad spend in Australia to reach $17.2 billion in 2019, with advertising video on demand (AVOD), such as free-to-airs catch-up services Nine Now and 10Play, providing the greatest boost and print experiencing the most significant decline.
In its bi-annual forecast, the group expects the local market to increase by 4.4% next year, making it the eighth largest in the world.
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