The advertising market is still cautious but the outlook is improving and consumers appear to be feeling a little more upbeat.
Advertising spend, as measured by media agency bookings, was hit by a post-election slump in June.
According to the latest Guideline SMI data, total bookings were back 7.1% despite strong growth from cinema (+12.6%) and outdoor (+5.4%).
Media analysts Steve Allen at Pearman said the mood and the market overall was cautious if not a bit pessimistic.
“We had hoped for a slightly better result in June media agency turnover, but the signs were there even before the federal government election,” he told AdNews.
Leading into this, ABS Retail Sales had been weak, dead flat in February, and only modest gains in March and April before May delivered a stronger growth rate. And not forgetting the polls were generally (and incorrectly as it turned out!) indicating a tight election result.
“Confidence was not abundant. The hoped for RBA rate cut, at that time yet to materialise, which affected both Consumer and Business confidence
“Thus any extra commitment to marketing/advertising post election, not likely, and as these numbers verify.
“However, the trajectory of retail sales March onwards, especially with the newly launched ABS household spending indicator series (which measures over twice the volume of sales) indicates consumers are on the front foot, plus it is no longer inflation largely driving this (this has subdued). August RBA is expected to be another cash rate cut.
“Thus the outlook is more positive than at least it has been. With these market conditions, we would be surprised if 2H 2025 was not, at least positive; i.e. further growth in media marketing investment. However it will be no bonanza.
“Never-the-less, better than we forecast or expected. As we know from the banks, with the two cash rate cuts to date, the vast majority of consumers (circa 85% plus) have not lowered the mortgage repayments.
“We sense pent up consumer demand. Forward thinking or brave marketers will reap the rewards.”
Ben Willee, executive director of media and data at Spinach, pointed to the ANZ Roy Morgan Consumer Confidence index, up 3.9 points to a thoroughly mediocre 90.6.
“In economic terms, this is basically the equivalent of someone saying, ‘Well, things aren’t quite on fire anymore’.
“Apparently, we’re all feeling a bit chirpier thanks to lower inflation and the promise of an interest rate cut.
“Meanwhile, the post-election ad market is doing it tougher than a vegan at a Bunnings sausage sizzle.
“No shock that Government spending has dried up. And food, produce and dairy are down 21% no doubt thanks to retail media as it continues to hoover up dollars.
“But, for the first time in what feels like a long time, the forecast for the ad market has shifted from ‘impending disaster’ to something resembling ‘cautious optimism’.
“And across adland, there are even whisperings, faint hopeful whisperings, of actual budget increases.”
Bench Media’s CEO and co-founder, Ori Gold, said the headline of a record $9 billion in ad spend for the financial year shouldn’t fool anyone.
“June’s –7.1% dip shows the market is cooling post-election. Government and FMCG spend took a dive, and Automotive continues to lose momentum,” he said.
“But it’s not all gloomy. Retail and Insurance are bouncing back, boosted by EOFY activity and early signs of easing rate pressure.
“More telling is where attention is shifting. Cinema, Outdoor, Digital Video and Audio continue their rise as preferred channels offering cut-through, impact and scale.
“With stronger targeting and measurement capabilities, they now deliver results, not just reach.
“This isn’t a time to play it safe. CMOs who double down now, while others hesitate, will set the pace heading into the summer holidays.”
Ros Allison, head of product & innovation, Magna, said looming trade tariffs and global uncertainty contributed to serious revenue deterioration in June, linear TV & radio down ~15% (though noting a relatively positive comparison period pre-Olympics in 2024).
“Revenue drops for TV are despite strong audiences - viewing against all main trading audiences is up, and buyers should be seeing headline deflation and reliable campaign delivery,” said Allison.
“OOH continues to drive the traditional media market, tracking to close the half up 14% when all programmatic numbers are in.
“Less evident in the SMI data is the acceleration of the two speed ad economy. The extraordinary momentum of the platforms is continuing, with the digital pure players now accounting for over three quarters of Australian ad spend, and soaking up market growth from traditional media owners.”
Amy Carr, general manager - growth, Yango, said the post-election slowdown in government spend was anticipated, and it's encouraging to see other sectors stepping up with strong growth in retail (+10.4%) and insurance (+11.4%) in June.
“The impressive performance of Digital and Outdoor media continues, particularly with digital video and streaming sites showing a 12.3% increase,” Carr said.
“This highlights a significant and ongoing shift in consumer attention and demonstrating that advertisers are still seeking out effective channels to engage with their audiences.
“From a broader market perspective in Australia, the fact that media agency bookings surpassed $9 billion for the financial year for the first time is a significant milestone and a testament to the market's overall health and resilience.
“Even with the June adjustment, the underlying ad demand is still showing growth, indicating increased confidence from advertisers.”
Emilia Chambers, head of strategy, The Pistol, said the data looks positive on the surface with a record level of ad spend delivered in the first six months of the year.
“But we’re not quite at the end of the tunnel of a tough few years in adland, especially for agencies with retail clients,” she said.
“While retail ad spend was up in June, what this really highlights is the increased pressure for many retail brands to rely on promotional periods to deliver against sales targets.
“We’re seeing many consumers waiting until individual brand promotions or discount periods to buy so that their dollar stretches further, which is impacting AOV and tightening profit margins, making it harder for some brands to grow.
“But it’s not all doom and gloom, the volume of ad spend is positive, showing a commitment from many brands to continue to invest in their brand through marketing efforts.
“As for the retail sector, with interest rate cuts looking likely over the coming months, and their positive impact on the cost of living, we’ll hopefully start to see a return to retail competitiveness being more than just a discount war.”
Nicole Boyd, head of client service, the Media Store, said client budgets continue to be challenged, reflective of consumer spending with high cost of living.
“Those that are winning with growth - Cinema, OOH, Video/streaming, newspaper/magazine – feels very reflective of how these channels are servicing the industry.
“They are investing a significant amount of time in servicing agencies, staying in contact, and promoting their offering – proactively.
“They are investing time to promote their offering, demonstrate innovation, and showcase new offerings such as data/audience solutions, and market mix modelling case studies to prove or challenge effectiveness.
“With agencies and clients being inundated with opportunities to invest getting cut-through is critical for publishers and technology vendors. Whilst these channels are in growth, as their spend is at a lower base level, the shift isn’t significant enough to impact overall 7.1% decline in spend.”
Alfie Lagos, director and founder, Lexlab, said it’s important to zoom out and look at where the market is trying to go, not just where it’s been.
“Yes, ad spend dipped again in June, down 7.1% year-on-year. And yes, government and food category pullbacks were a big drag,” Lagos said. “But that framing risks missing what’s quietly emerging in the background.
“Consumer confidence just hit 90.6, the highest level in over three years (ANZ - Roy Morgan Consumer Confidence Report, August 2025). Business confidence also lifted in July, with Roy Morgan reporting a rise to 103.0, its highest reading this year (ANZ - Roy Morgan Business Confidence, July 2025), and NAB’s quarterly survey showing confidence at -1 index points, the best result since late 2022 (NAB Quarterly Business Survey, Q2 2025). Even SMI is showing retail ad spend is already responding, rising 10.4 per cent in June.
“These aren’t just green shoots. They’re signals. They show a market that wants to grow and is looking for permission to get moving.
“The RBA, on the other hand, seems stuck. Rates are still sitting at 3.85 percent, and despite clear evidence of improving sentiment, there’s been no move to cut. It’s as if the Reserve Bank is still haunted by the ghost of its past. We all remember the previous governor’s promise of ultra-low rates lasting until 2024. That statement didn’t age well, and it seems to have left them overly cautious, watching, waiting, and second-guessing.
“But at some point, hesitation becomes inertia. Confidence is returning without the RBA’s help. Imagine what might happen with a clear policy shift. The market isn’t asking for a miracle. It’s asking for a nudge.
“This isn’t a market in decline. It’s one that’s ready to move. But like I mentioned last time, leadership just needs to show up.”
Ewelina Jones, group investment & client partner - Carat, said consumers have been navigating ongoing cost-of-living pressures, global instability, and a sustained sense of caution in their spending behaviour.
“To record a 2.4% overall (CYTD) media investment rise year-on-year speaks to the positive results clients see from advertising impact,” Jones said.
“At Carat we see an increased focus on measurement and accountability. With both short and long-term ROI scrutinised, optimised and proof points evident for brands.
“Despite a slowdown post the election (June -7.1%), the Australian market reached over $9 billion in FY2024/25 for the first time. Demand continues across some key categories (Retail and Insurance categories in June, up 10.4% and 11.4% respectively) and ad demand remains positive even with the exclusion of Government and Political Party ad spend.
“Shifts in media channels, aligning to consumer behaviour is offering more measurable engagement, reach and agility to optimise for brands.
“June SMI numbers further show the lean into Digital and Outdoor media where new spending records were set, with Digital now commanding a 46.4% share and Outdoor 16%.
“OOH continues to deliver a strong proposition for clients, with new or improved assets and nimbleness offered through continued digitisation.
“With the release of MOVE 2.0 we can anticipate the channel to continue being key in campaign mixes and taking share from less agile and accountable channels.
“Notably, growth in Digital Video and Audio was especially strong, now accounting for 13% and 15% of their respective totals. These channels continue to grow for audiences, and grow in their capabilities for advertisers.
“For Carat teams, it is critical that we continue to balance the fragmentation within these channels, ensuring quality attention and balance across new and updated ad-funded models especially.”
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