SMI: Advertising spend drops 8.5% in October

By Chris Pash | 2 December 2019
Credit: Boryak / Getty

Billings by Australian advertising media agencies fell again in October, this time by 8.5%, according to the latest SMI (Standard Media Index) numbers.

The market remained unexpectedly weak with all major media reporting lower bookings, marking the 14th month of negative growth in a row. 

The industry had been expecting a slight lift in ad spend, possibly in October and followed by a strong bounce in 2020. 

Outdoor bookings were impacted by an extra loading period in September which inflated that month’s agency ad spend and artificially reduced the October.

For the first time in many months, the Australian and New Zealand Agency markets were in synch from a demand perspective with NZ Agencies also delivering weaker advertising demand (-3.4%).

However, that follows five months of consecutive growth in NZ ad spend and abnormally large September demand due to the Rugby World Cup and local Government elections.

Jane Ractliffe, SMI AU/NZ Managing Director, says the October results were disappointing given that a small increase had been expected.

"Unfortunately there was an unexpected and significant decline in Travel category bookings with a large decrease in ad spend by airlines and and travel agents after months of strong growth," she says.

"And at the same time we saw continued weakness in Automotive Brand (mostly brand/sponsorship-related bookings) and Retailers.

"Among the major retail sectors we have seen lower advertising demand from supermarkets, electrical retailers and garden/outdoor living advertisers."

The Home Furnishing/Appliances category was also softer. 

On the positive side, the Insurance and Restaurant categories are continuing to grow strongly, with Insurance now delivering record levels of ad spend for the October month, financial year and calendar years-to-date.

And the increasing competitiveness of home delivery services has seen the restaurants category grow ad spend by 27.6% in October.

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