The latest ad spend numbers show ad spend returning to, and bursting out of, pre COVID levels.
But how long will the run -- backed by a strong surge in metro television and digital -- last before it hits a wall?
The December quarter, with its leadup to Christnmas and summer sales, could be huge, the pandemic, consumer confidence and economic strength willing.
The ad spend canary’s return to health has been faster than even the most optimistic forecasts.
Media agency bookings grew 41.8% in July compared to the same month in 2020, partly buoyed by television ad spend for the Tokyo Olympics. This was the fourth month in a row of growth beyond 40%, as measured by SMI (Standard Media Index).
The total market spend is 7.4% above the pre-COVID level in July 2019 and only $2 million off the record level of July ad spend reported in 2016.
Natasha Pelly, media analytics director, Publicis Media Exchange: “SMI’s latest numbers demonstrate the continued strength of the advertising market in Australia, with forward bookings at a really encouraging level despite recent lockdowns.
“It seems advertisers have re-evaluated the wisdom of pulling ad dollars in a knee-jerk fashion, perhaps due to a better understanding of the potential long-term side-effects ‘going dark’ can have on brand metrics.”
Metropolitan television is in a strong position, eclipsing pre-pandemic (up 2% versus January-July 2019). Digital is up 19% compared to 2019.
“Unfortunately, the latest spate of restrictions has taken its toll on consumer confidence, also causing a significant jump in unemployment expectations,” says Pelly.
“With another recession potentially looming in the third quarter, we may see a little more conservatism in ad spend in the last months of the year. However, it does look as though the total ad market will break even with 2019, demonstrating the adaptability and resilience of the industry.”
Pia Coyle, managing partner, Avenue C, says the July numbers and the rate at which September has filled up already is showing that Q4 will be crunch time in the market.
“Clients should be actively working to get their budgets out there, or they will miss out on key media,” she says.
“Almost half of Australians have been locked up for three months, and our positive vaccination rates mean an eye on a less restricted future and potentially, an unlocking of unspent marketing cash.
“It’s important however to remember what we’ve learnt from previous returns to ‘normal’. While consumer confidence has proven to bounce back quite quickly, the new normal will need to come with an understanding that things can change again on a dime.
“We are recommending all clients have meaningful cancellation policies, closely follow audience movement in cities, and have alternative reach driving channels that can be activated quickly if we are thrust into uncertainty again.
“All of these contingencies mean we can move forwards with optimism.”
Ben Willee, general manager and media director, Spinach, says the ad market is a function of consumer confidence.
“So while confidence remains surprisingly high, expect the ad market to be strong,” he says.
‘The real question is will confidence stay high during an extended lockdown in two of Australia’s largest markets? I hope so.
“There’s lots to look forward to once vaccination rates get beyond 70%, especially for those of us who are breaking world records for time confined to our homes.”
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