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April was always expected to be a challenging comparison month following last year's federal election campaign, with Easter and school holidays further distorting the results.
Steve Allen, director of strategy and research at Pearman Media, said the result was the most negative since October, with the big audience media suffering most.
"TV, radio and newspapers, and to an extent digital," Allen told AdNews.
"Of the top 15 spend categories, only four increased investment.
“Automotive brands led at +34.1%, the largest growth category and third overall by spend, followed by in-home entertainment +22.7%, home furnishings +15.5% and wealth management +12.9%.
“The rest are not holding year-on-year media investment."
The SMI figure puts total April ad spend down 11.6%, with linear TV off 24.8% and digital video up 19.6%.
Lewis Hearn, managing partner at Havas Media, said strip out the $45 million in political advertising and the real decline was closer to 5.5%.
Forward bookings for May, he said, sat at 93% of last year, the strongest since COVID, and brands pulling back in response to the headline figure were making a mistake.
"Strip out the $45 million of political advertising that flooded the market back in April 2025, and the underlying decline is closer to 5.5% and that gap will narrow even further based on a late market," Hearn told AdNews.
"We're advising clients to treat this as a reset, not a retreat. The election created artificial demand for inventory and inflated costs across broadcast and outdoor last year. What we're seeing now is a normalisation, and smart brands should be leaning in, not pulling back."
Sue Cant, head of investment at This Is Flow, warned the biggest mistake brands could make was reading the numbers at face value.
"Ironically, markets like this often create the best buying conditions,” Cant told AdNews.
“Inventory pressure is easing in some channels, negotiations are becoming more fluid again and there's an opportunity for brands to buy smarter if they move decisively to win against brands that hesitate.”
Amy Carr, general manager of growth at Yango, said the underlying market showed renewed energy once political spend was removed.
"While the headline 11.6% drop in April ad spend looks startling, it's an artificial dip caused by a shortfall in political and union spend compared to last year's record pre-election market," Carr told AdNews.
"Excluding government and political spend, the underlying decline is a much softer 5.5%."
Amy Dascanio, managing director at Enigma Media, said the market was being misread if election spending wasn't accounted for.
"We're encouraging clients not to read the latest SMI results as a sign of a weakening market. Once election spend is stripped out, the underlying market is actually much stronger than the headline numbers suggest," Dascanio told AdNews.
"What we're seeing isn't advertisers pulling back, it's a return to more normal investment patterns. Over the past 18 months, we did see a trend to adopt a shorter-term approach to planning in response to economic uncertainty, rising interest rates and softer consumer confidence.
"As those conditions become the new normal, clients are gaining greater confidence and are increasingly planning further ahead."
Frank Carlino, head of investment, media at Dentsu, said the overall picture was consistent with a market adjusting back to its baseline.
"The latest SMI data shows the Australian advertising market is back with total agency bookings -2.5% CYTD due to a softer April result of -11.7% YoY, mainly due to the Federal Election playing a major part in the YoY decline," Carlino told AdNews.
Paul Wilkinson, client partner and head of investment at Hatched, questioned whether "reset" was even the right word for what the market was experiencing.
"This implies that the market has landed somewhere stable from which to move forward," he told AdNews.
"With the constant instability and uncertainty facing businesses and consumers, interest rates, supply chain issues, Iran war, tariffs, this appears to be a structural softening of the market."
Ben Willee, executive director of media and data at Spinach, put it more plainly.
"Right now, the advertising industry feels like it's standing in the corner with its wallet out, counting the notes twice before spending anything," Willee told AdNews.
The TV versus digital video numbers are also drawing attention, but agencies say linear television is not in a freefall.
Hearn said political parties were the single biggest driver of TV spend in April 2025, and if you strip out government and political bookings, he said, TV's decline narrows to 13.6%.
"What the data does confirm is an acceleration we've been planning for. Audiences are fragmenting, and streaming video including BVOD and ad-supported platforms are capturing attention and ad dollars," he said.
"At Havas, we're not abandoning linear television, but we are seeing a rebalancing. Linear still delivers unmatched reach for tentpole programs and will continue to do so."
Mark Krebs, chief product officer at PMX ANZ, said linear had stabilised and remained effective for cost-efficient reach at scale.
"The shift towards digital video is continuing, but not at the expense of abandoning linear TV," Krebs told AdNews.
"The opportunity is less about substitution and more about optimising the total video ecosystem."
Dascanio said the movement in spend reflected changing viewing behaviour more than a wholesale migration of budgets.
"The decline in linear TV and growth in digital video is not a new trend, so it's important to interpret these results within the context of broader audience behaviour rather than viewing them as a direct transfer of budgets from one channel to another," she said.
"For clients focused on building long-term brand growth, reach and trust in brand-safe environments remain critical, and linear TV continues to play an important role in delivering those outcomes.
"We don't see advertisers moving away from television altogether. What has permanently changed is how consumers access and consume video content.
Carlino said the channel data reinforced the same story.
"Television trends further reinforce the market shift. Australian linear TV bookings are down 12% CYTD and -25.1% in April, while BVOD and premium digital video continue gaining share as advertisers seek more measurable and targeted video solutions," he said.
"Digital remains a growth driver +1.1% CYTD, concentrating spend around premium video, social video and high-impact digital environments that balance reach with stronger engagement."
Cant said the industry risked oversimplifying the shift.
"Linear is still one of the most powerful tools for building scale quickly and plays a critical role for cultural impact and fast reach building, particularly around live sport and major entertainment," she said.
"The future of video isn't 'linear versus digital'. It's about how intelligently agencies can orchestrate reach, attention and outcomes across both, working together commercially and strategically."
Phil McDonald, CEO of BCM Group, said free-to-air spend would keep falling as buyers used it more selectively.
"Overall, FTV spend will continue to drop as it is being used more selectively as a way to drive higher engagement in more premium programming. It's still a powerful way to spearhead the other digital video platforms, but no longer the backbone of total video spend," McDonald told AdNews.
Allen questioned whether the shift to digital video was delivering on its promise.
"Part of this is seemingly cheap CPM buying. But where is the performance, critical mass, reach?" Allen said.
"Impressions trading has some gapping traps."
Wilkinson said the direction of investment towards online video was real, but the more interesting question was where the money was going within digital.
"The data does point to a deliberate quality play, not just a cheap reach swap. It also implies a shift, or at least a softening, of investment from performance and bottom-of-funnel objectives and a shift towards brand," Wilkinson said.
Automotive grew 34% in April, the data's standout category result. Agencies say it reflects competitive pressure, not widespread advertiser optimism.
Hearn said the surge was driven by EVs, SUVs and light commercial vehicles, all of which doubled spend, off the back of new model launches and intense competition.
Carlino said the category numbers backed that read.
"Automotive Brand has emerged as a growth driver with bookings +34% April YoY and +12.9% CYTD, as ad spend to the EVs, SUVs and Light Commercial subcategories all double," he said.
Cant said the category was doing what categories under pressure should do.
"When markets tighten and new entrants flood in, smart brands don't go quiet, they fight harder for share of mind. Therefore, Automotive makes sense as a growth category given the increased competition across EVs, SUVs and new market entrants," she said.
Allen pointed to Australia's position as the world's most competitive auto market to explain much of the result.
"Australia is the most competitive auto market in the world. People are sent here by the global brands to see if they can make it. We are being flooded by new brands, particularly Chinese," he said.
"Right now, with the uncertainty in the Middle East, consumers are delaying major spend decisions."
Carr highlighted petrol prices as an additional tailwind for EV and hybrid marketers.
"Automotive's 34% surge reflects a plethora of new-to-market brands aggressively competing for market share, coupled with the opportunity that rising petrol prices present to EV and hybrid marketers," she said.
For the second half of 2026, agencies are watching travel, finance and retail.
Hearn said travel and tourism would fight hard for share of voice as consumer confidence stabilised, finance would be triggered by rate movements and regulatory change, and retail, which he said was back 10.7%, was ready to grow once cost-of-living pressure eased.
Wilkinson said wealth management and financial services stood out as a category set to outperform in H2, given proposed changes to capital gains tax and negative gearing.
"This is clearly going to be a focus from households and I believe there is opportunity here for such businesses to capitalise, in fact we are already seeing this, with the category up 12.9% in April," Wilkinson said.
"I expect this to continue as people seek ways to continue to build wealth in what is arguably a very uncertain market."
For agencies, retail remained the industry's biggest concern.
"As the market's largest advertising category, continued weakness from the retail sector will be difficult for the industry to absorb," Willee said.
Hearn said May forward bookings at 93% of last year were the strongest since COVID, and agencies say they tell a more useful story than the April headline.
Krebs said clients were cautiously confident, willing to re-enter but pacing spend given geopolitical and economic uncertainty.
"While forward bookings are tracking strongly, this needs to be contextualised against softer comparables driven by last year's election cycle,” he said.
“Clients are best described as cautiously confident, willing to re-enter the market, but still pacing investment given ongoing geopolitical and economic uncertainty.”
Cant said the market was shifting from paralysis to pragmatism.
"Clients still want flexibility, but they also understand that waiting too long can mean missing quality inventory, stronger pricing positions and strategic advantage," she said.
"Confidence is returning, just in a much smarter and more commercially disciplined form than pre-COVID."
Allen was sceptical, calling the forward booking figure a blip rather than a trend.
"Definitely not a trend. There is great uncertainty until the Strait of Hormuz situation is resolved," he said
Wilkinson said some of the May strength reflected deferred spend, with clients having pulled or paused budgets in April as the Iran conflict escalated.
"I'd love to believe that was the case, but I am actually of the view that some of this is borne out of the fact some monies were either pulled or paused in April due to the escalation of the Iran war," he said.
"That said, some advertisers are definitely starting to look and book further ahead, my advice to advertisers would always be to get in as early as possible. You will be rewarded with improved value and access to the best inventory."
Hearn said Havas was already acting on the data.
"Our advice to clients is clear, secure H2 positions now while competitors are still reading the headlines and hesitating. Those that back themselves now will be the real winners," he said.
Meanwhile agencies also spoke to the 17.6% growth in cinema in April, and 15% year-to-date.
Hearn said it points to a broader shift in how clients value attention and reflected fatigue with low-attention digital placements.
"The attention economy has matured. Clients now understand that not all impressions and exposures are equal,” he said.
“A 60sec spot on a 20-metre screen, in a captured environment, with phones away, delivers a fundamentally different brand impact and viewer experience than a skippable pre-roll on mute," he said.
Cant said clients were asking harder questions than they used to.
"It's no longer 'how cheap was the CPM?', but more so 'did anyone actually notice the ad?' That changes the conversation significantly for premium environments and how channels like cinema are valued," she said.
Krebs said cinema's growth was content-driven rather than a structural shift in planning.
"High-quality blockbuster slates are drawing concentrated, attentive audiences, which in turn attracts brands seeking high-impact environments. It reinforces that attention follows content, and investment follows attention," Krebs said.
Allen agreed box office was the main driver.
"Cinema is far more box office driven, they are having a good run with major releases (and successful!)," he said.
Wilkinson said the content argument only went so far.
"The fact that cinema advertising spend grew 17% period on period, between two genuinely strong box office months, is compelling and evidence yet that this isn't purely a content story but one of structural shift," he said.
Willee said cinema's underlying proposition remained hard to replicate.
"In a world where we're all distracted by notifications, tabs and endless scrolling, getting people to put their phones away and stare at a giant screen for two hours remains a very powerful proposition," he said.
Carr said cinema's rise was consistent with broader gains in out-of-home, with street furniture and transit both reporting higher revenues.
"Clients are actively rethinking their media mix to favour environments that deliver genuine impact and cultural resonance rather than just chasing cheap eyeballs," Carr said.
Hearn said the SMI data backed the direction Havas had already taken.
"We're entering an era where 'premium attention' becomes a traded metric, not just a talking point around the boardroom table. Cinema, long-form BVOD, and high impact outdoor formats will all benefit," he said.
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