The YouTube crisis has played a role in the first decline in digital media ad spend for nearly eight years, according to updated SMI figures for February.
Media agency bookings across digital declined by 1.7% to $135.3 million compared to February 2016, led by a 10.3% drop in video platforms ad bookings.
Although analysts have predicted the YouTube boycott would cost Google about US$750 million, this is the first attempt to put a figure on how much the scandal is impacting digital media budgets in this market.
It is the first time for 94 consecutive months of SMI reporting that digital has not grown year-on-year.
SMI Australia and New Zealand managing director Jane Schulze tells AdNews that even when overall ad bookings were down, digital had always managed to lift.
“There has been quite a few issues over digital raised in the press so it's been a focus for the industry in recent weeks,” Schulze tells AdNews.
“Clearly SMI’s media agency partners are acting quickly on behalf of their advertiser clients to reassess digital budgets.
“The market was down (now 6.9%) so there wasn't a lot of demand there in the first place, but what's unusual is that SMI has reported many times when the market is back but every other time digital has managed to still grow.
“It will be interesting to see what happens in March. When the market does return to growth where will the dollars go? Will they return to digital or will they go back to more traditional media.”
In the past couple of months, a growing number of Australian companies have stopped advertising on YouTube amid brand safety concerns.
Brands such as Holden, Telstra, Foxtel and Tourism and Events Queensland have paused investment with several brands' ads placed alongside inappropriate content videos featuring racist hate speech and terrorist sympathisers with concerns their advertising dollars are enriching extremists. The Australian government joined the boycott over the weekend with big spending departments, such as defence stopping YouTube ads.
February's decline was most keenly felt by publishers with spend down by $5.9 million from last year. This indicates that YouTube's demise is having a negative impact on other digital media websites that operate with more brand safe environments for advertisers.
Pure play video sites, like YouTube, declined 10.3% and ad spend onto social platforms was flat.
Programmatically-traded digital media grew by 35% year-on-year, which shows that automation of digital is still going strong despite industry commentators recently labelling programmatic as lacking transparency.
By category, banks (down 20%), other financial services (down 15.4%) and toiletries/cosmetics (down 21.4%) had the largest drops in digital ad spend.
Today, News Corp launched a campaign to promote its digital assets as premium, brand safe environments for advertisers.
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