Australia’s advertising market will drop 8.3% this year to $15.4 billion. according to Magna, IPG Mediabrands’ media investment and intelligence division.
Spend will rise next year but won't get back to 2019 levels for two years. Magna says Australian advertising spending in 2021 will increase by 6.9% to reach $16.4 billion, slightly below the 2019 totals, which won’t be surpassed until the end of 2022.
The 8.3% decline this year, forecast in a Magna global study, will see linear ad spending fall 17% and search down 2%.
However, digital advertising spend by only drop 2% with social ad spend up 5% and video 3%.
Digital represents almost two-thirds (64%) of total Australian ad budgets, one of the highest global ratios.
In 2021, digital is forecast to rebound by 11% to surpass two-thirds of total advertiser budgets.
Brands in Australia, like many across the world, prioritised channels that supported ecommerce as the COVID-19 recession set in.
Advertising that targets consumers higher in the funnel has been weaker than direct advertising. Weakness in digital advertising will come from static banners, down 17%, and other digital advertising, falling 18% .
In 2020, television advertising revenues will fall by 12% to represent just 19% of total budgets.
And while the Tokyo Olympics wasn't expected to generate a major increase in ad spend this year, postponing the games to next year is another setback.
Australian TV viewing spiked during the coronavirus shut-down. Viewing time increased by 15% to 20% and as life returns to normal so has viewing, which now has a small premium year on year.
Other linear formats have suffered more declines. Radio will shrink by 15%, print by 29% and out of home by 19% in 2020.
“This is unsurprising given the decline in mobility exhibited by Australian consumers as a result of COVID shutdowns and consumer fears,” says Ros Allison, head of group performance at Magna Australia.
Transit mobility peak declines were in early April, with consumers showing 70% less movement than they did in 2019. Mobility has increased recently but remains 40% below 2019’s levels.
Australian lockdowns mostly began on March 16 with different rules depending on the severity of the impact in each Australian state.
Restrictions weren’t as severe in Australia as they were in many countries as work from home wasn’t strictly mandated even for non-essential businesses.
As Australia emerges from COVID-19 restrictions, the subsequent economic rebound will be significantly impacted by how fast Chinese demand and Chinese construction projects resume, as much of Australia’s non-tourism economy is driven by China.
By industry, Australian advertising spend will be weakest in travel (-20%), auto (-18%), and appliances (-10%).
Relative strength will come from personal care (-1%), as well as Pharma (-3%), Food & Beverages (-3%), and Telecom (-3%).
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