SMI - Ad spend in July shows a slow rebuild after COVID-19

Chris Pash
By Chris Pash | 1 September 2020
Getty Images/iStockphoto

Media agencies reported for a second month lower falls in ad spend as Australia climbs out of the pandemic economic trough.

SMI (Standard Media Index)  numbers show a 28.4% fall in national marketer advertising spend in July compared to a 35.7% drop in June and a record 40.4% in May. 

Early data for August shows the trend continuing, with advertisers spending more than for the whole of July, with the strongest advertising demand seen in television, down so far at 11.2%.

"All markets are slowly rebuilding after COVID inflicted huge declines in advertising expenditure and it’s great to be able to report the early signs of growth as the media world tries to return to a new normal," says Jane Ractliffe, SMI AU/NZ managing director.

All major media again reported large double-digit falls in July ad spend.But there were strengthening sectors including Regional Radio bookings, down just 11.6%, Social Media ad spend down 13.8% and bookings to Video Sites back just 13.7%.

The market also reported stronger demand from some key categories, with the largest Retail delivering more stable bookings (-3.8% in total) as chemists, supermarkets and outdoor/garden retailers all grew their media investment.

But the largest percentage increase among the major product categories came from the Toiletries/Cosmetics market (+20.7%).

Within this market the investment in advertising Hair Care products almost doubled with most of those extra funds moving to the TV and Digital media (see the updated media owner shares for this category at the end of the release).

The value of Oral Care advertising grew 11.7% in July and the Other Toiletries market (mostly deodorants etc) more than doubled its media investment.

smi hair care july 2020

Ractliffe says the data is already showing an even lower level of decline in August with the total (ex digital media) so far back 25.2%.

"It could be that for August the percentage decline reduces into the teens as we’re seeing strong forward bookings for numerous product categories and both the Television and Digital media are more quickly returning to a pre-COVID state with Digital’s July decline of 15.6% the lowest of any major media," she says.

"And for the month of October the value of committed ad spend is now only six percentage points behind where it was at this time last year.

"Given the lower July decline, the trend for the calendar year-to-date also continues to improve with the market now back 24.5% over the past seven months.

SMI July 2020

SMI has also just released the final July ad spend for New Zealand, which is reporting a lesser 21.1% decline in July bookings given the country has had a more limited COVID impact than the Australian market.

The NZ market also saw some green shoots in ad spend, with the Regional Radio market managing to lift bookings by 15.6% and in the Digital media the value of ad spend utilising the Video ad format increased by 6.7%.

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