The latest numbers for media agency bookings show a stubborn slow start to advertising spend in Australia in 2024.
The Standard Media Index (SMI) for February was down 6% compared to the same month last year, a contrast to record and near-record results in other ad markets.
Demand was mostly impacted by large falls in ad spend from banks and the communications categories. The automotive brand category fell by 10% despite a 50% increase in bookings to the electric vehicles subcategory.
The media category almost halved due to a steep decline in ad spend from TV (-12.9%) and radio (-5.9%).
Analysts had expected a slow start to 2024 but improving into the second half as brands gain more confidence.
Various forecasts show growth in advertising spend, including MAGNA which puts Australia's total advertising revenue growth in 2024 at 3.8% to $A27. 7 billion. Dentsu predicts 2.3% but GroupM sees a flat year in 2024 with just 0.9% growth, most of it in the second half.
Nine Entertainment and Seven West Media have been warning of a weak advertising market.
Jane Ractliffe, SMI's APAC managing director, said the February result varied significantly from that in other sophisticated media markets.
The US reported record US ad spend in February. Canada had a 7% increase in ad spend to a level only exceeded in 2018. China ad demand grew 12.5% and is now up 6.7% this calendar year after a tougher 2023.
"But we have always expected a softer period in Australia up until at least Easter with ad demand likely to pick up in the second half when tax cuts and key sporting events – such as the Paris Olympics - combine to lift demand," said Ractliffe.
In Australia, outdoor was in February again the best performing media with a small year-on-year fall 0.4%.
But within that the retail outdoor, programmatic outdoor and transit sectors all reported double digit growth.
Digital ad spend was back 3.1% but social media bookings were up 5.9% and programmatic returned to growth (+4.7%).
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