Credit: Serina Bird via Unsplash
Media agencies are urging brands to plan defensively for the second half of 2026, with leaders warning the federal budget does little to unlock meaningful advertiser confidence despite its political ambition.
The budget delivered tax relief, a permanent instant asset write-off for small business and sweeping changes to negative gearing and capital gains tax, measures that land unevenly and leave the broader business environment, as one agency head put it, conflicted.
Bench Media co-founder and COO Shai Luft drew a sharp line between political courage and commercial wisdom.
"If nothing else, this was a brave budget," he told AdNews.
"The problem is that brave and smart are not always the same thing."
Luft said the reversal on negative gearing, after the government had firmly ruled it out just a year prior, sends a damaging signal to the clients agencies serve.
"Reversing course that quickly may make political sense, but it also creates uncertainty for investors, founders and business owners trying to make long-term decisions around hiring, expansion and investment," he said.
"Businesses invest when they feel the rules are relatively stable. When governments suddenly change direction on major structural settings, people naturally become more cautious."
Luft raised a longer-term concern for the market agencies depend on.
"Independent businesses, startups and agencies are built by people taking enormous personal and financial risks over long periods of time," he said.
"Australia should be careful about creating an environment where risk-taking feels less attractive while simultaneously wondering why productivity and innovation are slowing."
Edge Marketing CEO and director Rohan Dwyer was more optimistic, pointing to the tax cuts as the strongest driver of near-term advertising demand.
"More money in the pay packet equals improved spending, good retail, travel and lifestyle categories," he told AdNews.
"If you have a product or service the market requires or desires, then aggressively pursue it before someone else does and you lose the opportunity."
Dwyer's main frustration was the Budget's silence on AI at a moment when agencies are mid-transformation.
"Investment in this area is required to help businesses thrive with it, protect against those using it for nefarious reasons and inspire all to look at the benefits it brings rather than using it as a scapegoat for lack of preparation, vision and naivety," he said.
Havas Media Melbourne managing partner Lewis Hearn said the government's intent was legible even if the timing of its impact was not.
The combination of the new worker tax offset, incremental tax cuts and the $1,000 instant deduction all signal support for working Australians, he said, even if the bulk of the cash benefit lands in 2027-28 rather than immediately.
For marketers, he argued, that distinction matters because confidence moves before cash does.
"After 18 months of intense scrutiny on marketing investment, this budget gives CMOs and CFOs permission to shift the conversation from cost control back to growth," he told AdNews.
"It doesn't flood the economy, but it does reduce risk, which is often the trigger for investment decisions."
Enigma Media chief media officer and partner Justin Ladmore struck a similar note, saying the budget should support consumer confidence without triggering a major spending boom.
“For advertisers, that means the second half of the year should feel a bit more stable, but still cautious,” he told AdNews.
Ladmore said the moment still presented a real opportunity for brands willing to act.
“The brave brands that ramp up spend when others pull back are usually the ones that win share. The opportunity now is for brands to keep investing, but to do it in a way that shows they understand what households are going through and can help make life feel a little easier,” he said.
Ladmore, whose agency has a dedicated property division, said the picture for that sector was mixed.
On categories, Hearn pointed to retail, FMCG and travel as the clearest early beneficiaries.
"When household pressure eases, even marginally, it shows up immediately in the shopping basket," he said.
Travel, meanwhile, had been resilient but cautious, and he described the budget as acting as a release valve for deferred spending, particularly among middle-income households.
Automotive remained a strong category, he said, but with an important shift.
"The budget signals that EVs are moving from subsidy-led growth to mainstream," he said.
"That means success in automotive will increasingly be driven by brand strength and product positioning, not just financial incentives."
Yango managing partner Nick Murdoch was blunter.
Agencies will see spend soften not because of anything industry-specific but because Australians will simply have less money.
"If consumers are cautious, so are marketers, simple," he told AdNews.
"The only ones with a moat are Alphabet, Meta and co. We'll be telling clients, and ourselves, batten down the hatches, ride it out and hope for better times ahead."
Lexlab founder and director Alfie Lagos said the budget's own numbers told the story for H2.
"That is not a budget designed to give H2 2026 ad spend a sugar hit," he told AdNews.
"H2 2026 is defensive. Confidence is wait-and-see."
Lagos identified the negative gearing transitional window, full negative gearing retained on property purchased before 30 June 2027, as the budget's clearest forward-planning signal for agencies advising property clients.
"Real estate portals, mortgage brokers, conveyancers and developer marketing are about to have the most predictable ad demand event of the next 18 months," he said.
"Plan inventory now."
Lagos also flagged the News Bargaining Incentive, a 2.25% levy on Meta, Google and TikTok above $250 million in Australian revenue, as something agencies need to plan around rather than toward, warning it could see Meta pull news from Australian feeds again.
His broader critique was direct.
"The budget made the $20,000 instant asset write-off permanent, which is genuinely good policy for small business. But it only rewards buying things. It does not reward growing,” Lagos said.
"The most productive thing a small business can do is grow.
“That means investing in local advertising, building a brand, backing a new idea, or testing a new channel. None of that gets a kicker. A new laptop does."
Dentsu ANZ president of Amplifi Melanie McDonald said the budget ultimately leaned more toward stability than stimulus.
"There is little in this budget to provide significant relief for everyday consumers, with small tax breaks for small businesses but no short-term solutions for household budgets," she told AdNews.
McDonald said while the changes to capital gains tax and negative gearing may soften house prices slightly, they also risk placing further pressure on renters.
"Ultimately, business confidence remains the most important driver of marketing spend, and this budget is unlikely to move the needle there," she said.
"This is a budget that leans toward relief rather than recovery, and advertisers will most likely be watching consumer sentiment closely before making any decisions on spend."
On investment strategy heading into H2, Hearn said the fundamentals had not changed but the context had.
He advised clients to rebalance back toward reach and brand building, warning that many organisations had overcorrected toward performance marketing and short-term conversion during the downturn.
"That was rational in a constrained environment, but as conditions shift, the risk becomes under-investing in future demand," he said.
"This budget supports a move back toward brand as a growth lever, not a discretionary cost."
Hearn also flagged a timing consideration, noting that given the lag between policy and household impact, the real opportunity sat in strategic planning now for stronger activation in Q4 and into next year, when sentiment and spending would align.
For Ladmore, the client advice heading into H2 was clear.
“I will be telling clients not to over-read the budget as a consumer boom. Confidence will stabilise, but consumers will still be selective, so brands need to be smart with how they invest,” he said.
“I will be also advising clients to maintain or increase share of voice as their competitors pull back and now more important than ever is to have brand and performance working closely together as one growth engine,” he added.
Prophet CEO Jordan Taylor-Bartels warned agencies against mistaking political headlines for economic momentum, pointing to grocery, value retail, pharmacy, QSR and domestic travel as the categories best placed to benefit while premium discretionary accounts face quiet pressure.
"If your media strategy can survive unchanged after a federal budget, inflation shock, interest-rate cycle and collapsing consumer confidence, it probably wasn't grounded in reality to begin with,” he told AdNews.
“The era of static annual planning is over."
Taylor-Bartels also warned that making capital gains less attractive has consequences agencies will eventually feel in new business pipelines.
"When you make capital gains less attractive, you do not just hit wealthy investors,” he said.
“You reduce the incentive for people to fund the next generation of Australian startups.
"If you tax risk like it is rent-seeking, you get less risk. And when you get less risk, you get fewer companies, fewer challengers and a less dynamic advertising market."
Hearn pointed to structural issues the industry had been carrying well before budget night.
"This budget provides support for households and some funding for public interest journalism, but it does not shift the imbalance in the media ecosystem," he said.
"A significant share of digital advertising revenue continues to flow offshore to global platforms that don't directly invest in Australian journalism or local content creation."
He also flagged two further gaps. "There is a continued lack of clarity around privacy and data reform, marketers know change is coming, but without clear timelines or frameworks, it creates planning uncertainty, which ultimately slows investment decisions," he said.
"And there is a capability issue that remains under-addressed. The media and marketing industry is facing a genuine talent and skills gap, particularly in areas like data, technology and advanced analytics."
Ladmore shared a similar concern about the missing ingredient.
“The missing piece is a stronger reason for businesses to feel confident about growth," he said.
"The budget gives households and businesses some relief, but it doesn’t really create a big confidence boost.
"Advertisers need households to feel more confident, but they also need businesses to feel there is upside in investing for growth. This budget reduces some pain points, but it does not fully unlock that next wave of advertiser confidence."
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