EARLY SMI: October misses an expected lift in advertising spend

By Chris Pash | 18 November 2019
Getty

Early SMI (Standard Media Index) numbers for October indicate a soft advertising market across all forms of media in Australia. 

This would mean another negative growth month in media agency spend, the 14th in a row, when numbers for October are  finalised. 

Total ad bookings, ex-digital, were down 12.4% compared to October last year.

According to UBS, the SMI numbers suggest metro TV bookings were down 9.2% in October, a deterioration on
the -6.4% September quarter metro TV market growth disclosed by Nine at its recent trading update.

"Today's weak October result should now be largely expected by the market," say UBS analysts Eric Choi, Tom Beadle and Minnie Tong.

Nine in a trading update earlier this month said early signs of a second quarter improvement in the TV advertising market improvement had faded.

The media group told its AGM: "Advertising from pretty much every major advertising category was weak in the September quarter particularly from auto, government, domestic banks and gambling. And whilst our business has become much less subject to the vagaries of the ad market, this weakness has of course, impacted."

Analysts at SMI had been predicting a return to total advertising market industry growth in the December quarter, with a possible positive month in October.

The UBS analysts: "Not the October bounce we were hoping for." 

"We remind readers that SMI generally has the best correlation to reported metro TV revenues – and its correlation with other ad mediums can be weak," write the analysts at UBS in a note to clients.

"Nevertheless SMI suggests that most other ad mediums likely also experienced a soft October:" 

Regional TV bookings were -9.8%, Metro radio –12.7%, Regional radio –10.6%, and Outdoor -21.0%.

Initial indications also suggest digital bookings could be weak. 

Late bookings aren't in yet. However, digital bookings are currently -44% in Octiober. Usually digital bookings are only -20% to -30% pre late bookings.

The October preliminary numbers:

early smi oct 2019

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