A weary advertising spend canary in a slow start to the year

Chris Pash
By Chris Pash | 19 March 2024

The advertising market has started 2024 with continuing weakness among traditional media, according to agency booking data.

Standard Media Index (SMI) numbers for January, not yet released publicly, show metropolitan television down 9.2%.

And early SMI data for February indicates a more than 12% fall in metro TV.

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.

Seven West Media, announcing half year results, said it was prepared to squeeze costs “as hard as we possibly can” if necessary.

The media group reported a steep drop in net profit after tax, down 52% to $54.46 million for the half year to December.

Nine told the market last month that the advertising market remains difficult in the current March quarter with Metro free-to-air revenue expected to be down in the mid teens (%) on the same quarter last year.

Across total television, Nine’s revenue fell by 9% in the half to December due to the advertising market and "challenging" broader economy. 

The unreleased SMI data also shows outdoor media, normally the star of ad spend growth, recording a drop in January.

However, early data for February is showing a pickup up pf around 6%.

Total radio for February was trailing 8% behind and newspapers down more than 25%.  

Insiders say bookings for March are weak so far but forward bookings look more robust in April for television, radio and outdoor.

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