Credit: Philippe Gauthier via Unsplash
Australian advertising spend, as measured by media agency bookings, is suffering from a comparison to the lead up to a federal election last year and its associated spike in government money.
Guideline SMI numbers show February down 5.2% despite a surge in streaming video via Nine’s Winter Olympics broadcast.
That broadcast reduced metropolitan TV’s February decline to just 3.7% and also delivered a boost to the streaming video sector where total revenue jumped 22.5%.
The key message is that advertisers are spending but execution is changing.
Media analyst Steve Allen at Pearman points to the spending comparison distortion of the March quarter 2025, especially January and February, leading into federal election in May, held up by a wall of government spending.
Therefore, an overall dip of just 5,2% in February is “quite heartening”.
Shai Luft, COO, Bench Media, said the February’ numbers feel like more of the same.
“The market remains flat and confidence hasn’t returned,” Luft said.
‘Inflation is lingering, rate expectations are creeping up again and there’s a significant global uncertainty, so it’s no surprise marketers are cautious.
“It’s also worth remembering this time last year we were heading into the federal election, which brought more spend into the market.
“What’s interesting is where the money is still going. Streaming keeps growing, helped by big events like the Winter Olympics, while most of the remainder of the market softened. That’s not just a one-off spike, it shows how selective things have become.
“Brands are not switching off, they’re just being pickier. There is more focus on places where people are actually paying attention and less on broad, easy reach.
“It’s not a broken market, just a more considered one, and the brands that adapt to that will pull ahead of their competitors.”
Vera Manalac, group investment director, iProspect, said the February SMI paints a picture of an advertising market that is more dynamic and less predictable than the headline numbers might suggest.
“While total agency demand is back 5.2% year on year, the underlying shifts across media types reveal where brands are finding value, where competition is heating up, and most importantly, where growth could potentially return as we move further into an Olympic‑fuelled year.
“At iProspect, we believe this is not a declining market but one that is rebalancing and for brands willing to rethink their mix, the opportunities right now are significant.
Streaming Video continues to outperform, growing 22.5% year on year and adding more than $5 million in February alone.
“This isn’t merely a reflection of changing viewer habits it demonstrates a fundamental shift in brand strategies,” Manalac said.
Brands are now: Balancing out incremental reach on digital platforms against declining linear audiences; Leveraging heightened addressability and data-rich environments; Aligning with culturally significant programming, including major sporting events
From a linear perspective, Nine’s strong Winter Olympics performance helped stabilise Metropolitan TV, but long‑term trends remain unchanged.
TV’s decline, down 7–12% across various time frames, will continue despite short‑term sporting spikes. Its future role will likely increasingly centre on premium, event‑driven moments rather than mass‑reach continuity.
As Total Television fell 7.1%, connected screens filled the gap. In iProspect’s view, this signals an industry now firmly operating in a Total Video paradigm, where cross‑screen planning and deduplicated reach measurement must be non‑negotiable.
“February’s SMI data doesn’t show a market in retreat, it shows one in transition,” said Manalac.
“As the Olympic year unfolds, we expect investment momentum to strengthen, particularly in high‑attention, measurable environments.
“At iPROSPECT, we’re not telling a story of decline, because the detail shows a market reshaping, not retreating. February saw growth across four major categories retail, insurance, auto brand and government with Insurance up 14.9%, pointing out consumer priorities around security, necessity and value. In contrast, discretionary sectors such as restaurants (‑17%) and travel softened under economic and global pressures.
“Early March pacing reinforces this pattern, with strong gains in auto insurance, soft drinks, EVs, government and hardware, signalling a market anchored in resilience and everyday consumption.
“As 2026 unfolds, brands will continue rebalancing their investment mix following audiences, prioritising effectiveness, and capitalising on efficiencies across channels where momentum is strongest.”
Amy Dascanio, managing director, Enigma Media, said the February results highlight how major events such as the Olympics continue to drive incremental revenue for media owners, as brands look to capitalise on key cultural and sporting moments to better engage their audiences.
“Investment is increasingly following attention, with channels that can demonstrate this capturing a greater share of budgets,” Dascanio said.
“What we’re seeing across channel investment is a direct reflection of changing consumer behaviour.
“As audiences continue to fragment and budgets come under pressure, there is far less tolerance for inefficient spend.
“The expectation is clear: all investment must deliver results, whether strengthening long-term brand health or driving immediate sales and leads.”
Her agency is seeing the strongest results from integrated, cross-channel strategies combining FTA, BVOD/SVOD, AUDIO and DOOH.
“These environments are no longer planned in isolation, so when planned effectively within a broader digital ecosystem, they are delivering measurable gains in both reach and performance,” Dascanio said.
But storm clouds are already here.
Allan at Pearman points to the quagmire of the Iran War and the Straits of Hormuz, and what this does to the Australian economy…and life.
“March will be tough, especially when taking into account government/election spending last year, but OKish,” he said. However, the June likely to be really tough.
Dascanio at Enigma Media said the latest drop in Roy Morgan’s consumer confidence from 63.1 to 58.5 marks a second consecutive decline and the lowest level since 1972.
“This does signal that there will be increasing economic pressure ahead,” she said.
“From my perspective, this is unlikely to further accelerate declines in ad spend, but it will drive greater discipline, as the conversation has already shifted from ‘how much do we spend?’to ‘how hard is our spend working?’
“We all need to be prepared to balance effectiveness with efficiency, and those who can consistently deliver both will be best positioned to outperform, as we move into tougher market condition across Q2.”
Lee Stephens, executive chair, Meerkat, said it’s a relief to see signs of growth in an otherwise dismal media market for months.
“While the Nine Network benefited from the Winter Olympics, the awkward time zone live coverage did the heavy lifting for on-demand viewing,” he said.
“Outside of the Olympics you can see the rapidly growing structural changes to on demand TV as free to air audiences are aging beyond key demographics.
“What isn’t captured well in the SMI data is the growing number of Australian’s watching YouTube on lounge room screens. By YouTube’s own figures, 11 million Australians watch the platform regularly on large screens in the household.
“The growth in print media, fuelled by regional and community markets was the biggest surprise in the February figures. Sustaining this growth is going to be tough with mass travel plans delayed or shortened over fuel shortages in March and April.”
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