Credit: Denys Nevozhai via Unsplash
Australia's fragile advertising market could be near hitting the bottom of the cycle, if early talk of a clearer road ahead is correct.
The word being used, somewhat tentatively, is “recovery”.
According to media agency booking numbers from Guidelines SMI, total media spend was down just 0.52% in May, with late digital spend expected to take the month positive. So far, year-to-date down 1.11% to $3.4 billion.
“The ad market may be approaching a cyclical low point, with early signs of improved business confidence,” according to analysts at Macquarie.
However, the bottom, with a subsequent uptick, is still some distance in the future. Media analysts see 2027 as the pick up point, depending on consumer and business confidence.
"The ad market has seen substantial headwinds over the last three months (i.e., rate hikes, Middle East volatility),” Macquarie wrote in a note to clients.
“However, we see 4Q26 (June quarter) as a potential low point given modest improvement in recent business confidence and consumer sentiment data.
“Visibility on peak rates, currently expected for November 2026, should be a key catalyst for the recovery."
Media analyst Steve Allen at Fusion Strategy sees talk of an early recovery as on the optimistic side of outlook.
“A prediction for the commencement of an ad market recovery from Q1 2027, right now, seems a mite optimistic,” he told AdNews.
The start of calendar 2027 should see a better media market than the past three years, he said.
“The overall market has been held up by digital, whereas nearly all other mediums have been struggling to hold what they previously wrote. Outdoor and Cinema being the exceptions," Allen said.
The year to the end of April shows the Australian advertising market down -2.5%, with digital, outdoor and cinema in positive territory. Newspapers are also ahead.
“The overall market is fragile, and in our view will remain this way for the next three to six months,” Allen said.
“Thus recovery is too early to call, even for Q4 2026 (June quarter) going into Q1 2027 (September quarter).
“We believe 2027 will be far more predictable and less volatile than 2026. All of this rests on resolution of the Middle East conflict, which seems to be heading in the right direction.
“This very early prediction for calendar year 2027 does have the overall market with modest ad spend growth.
"But it is unlikely to be a quick, nor solid recovery.”
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