SMI - Media agency bookings up 2% in December 2020

Chris Pash
By Chris Pash | 1 February 2021

A surge in late digital bookings delivered a 2% increase in year-on-year ad spend for December 2020. 

The result comes after an 8.3% year-on-year rise in November, as measured by SMI (Standard Media Index), breaking a 26 month run of negative results. 

Strong TV and digital demand has been driving the surge, with forward data shows ongoing growth across numerous categories. 

Digital’s 15.9% increase in ad spend in December, hitting a record $223 million, also created a significant first with the size of digital’s monthly national marketer revenues overtaking that achieved by television for the first time in a month. 

And that was despite another strong month for television which reported an 11% increase in agency ad spend to now be reporting revenue growth of 15.3% for the December quarter and a decline of only 1.2% for the December half. 

"There’s now no doubt that the market has moved strongly beyond the COVID ad recession and is quickly rebuilding,’’ says SMI AU/NZ managing director Jane Ractliffe. 

"The evidence is clear as total ad spend for the December quarter is now up 5.4% and we can see that well more than half of all the SMI product categories grew their media investment in this period. 

"And our forward pacings data – which tracks confirmed future ad bookings – shows ongoing growth across numerous categories.’’ 

The large jump in Digital ad spend in December was mostly due to ongoing attraction to social media sites with the sector now digital media’s second largest after Search. 

"In the past six months we’ve seen increasing demand for social media sites as Facebook continues to grow and new entrants such as TikTok, Pinterest and Snapchat also benefit from the wave of revenues flowing to this sector," Ractliffe says.

"In the December quarter most of these groups are averaging growth of more than 25%, and the sheer weight of revenue moving to social media in the second half has meant its emerged as one of the very few media sectors to now be reporting growth over this tough calendar year." 

The stronger December and December quarter results has seen the Australian ad market’s decline over the second half fall to 7.2% and over the full calendar year to 15%.

However, that still translates into a $1.1 billion fall in the amount of advertising inventory sold in Australia in the year.

The largest contributors to the decline were Auto Brand (-$226.6 million) and Travel (-$241 million).

On the positive side, the product categories reporting higher 2020 ad spend include Food/Produce/Dairy (+6%), Domestic Banks (+2.9%) and Government (+3.1%).

"There’s no denying the fact the COVID pandemic coming so soon after Australia’s devastating bushfires created a perfect storm for our advertising market and an advertising recession that was completely unexpected," she says.

smi dec 2020

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