The advertising market posted another decline in June with some of the growth channels dropping off significantly. But concerns about budgets being diverted out of mainstream media have been hosed down.
PWC flagged last week that the Australian ad market would continue to be pegged back by low growth out to 2018. Part of the drag would be down to brands building out their own channels and shifting marketing budgets into maintaining them.
While latest SMI data suggests a flatlining ad market, media buyers have suggested it's too soon to blame owned media channels.
June SMI data shows the market back 2.9% year on year with most categories bar outdoor posting declines. Subscription TV was down 12.4% with the other poster child, cinema, back 43.6%. Those categories though outperformed last year and repeating the trick was always going to be tough. Election spend comparisons also distort the picture.
But some think that the shift of dollars to brands own channels will soon start to bite, and will also make it harder to follow the money in terms of reporting.
UM boss Mat Baxter said owned media “will always be the ultimate goal. Any brand will want to see as much engagement as possible within their own asset base. It's like owning or renting a house. If you rent, as soon as you stop paying, you've got nothing to show.”
Baxter was speaking broadly rather than in relation to SMI data, but said it was inevitable that “less media money will go into advertising,” and that “we're starting to see that pivot occurring. It's the top ten percentile of marketers, but it won't be long before the broader market starts to switch.”
OMD boss Peter Horgan said it was too soon for owned channels to be making much impact on the overall market. “We're firmly into year on year election comparisons,” he said, and the economy was yet to settle following regime change.
Brands “leveraging their own dedicated assets will have an impact when they start to scale but [now is] maybe too soon to see that impact.”
One media analyst said the main drag factor was the economic picture. Even if reporting season in August breed investor confidence, the market would “tread water” throughout 2014.
“The market feels a bit weak. It's the impact of the budget and the economic factors haven't turned out as people predicted. They Sydney housing market, which fuels the banks appears to be cooling, there are no real categories pushing it back up again.”
The shift to owned media was a “valid comment” and that as brands invest more in their own data and channels there would be an impact on tradition media channels and it would also make spend harder to measure. “It is worth keeping an eye on” but not a main reason behind the sluggish ad market, he said.
He predicted a flat year for free TV, from -1% to +1%, and said that most channels would be affected by the current lull. Even if the August reports do provide triggers for increased investor confidence any upswing will likely lag.
However, the analyst said that he would be “very surprised if 2015 went the same way as we see this year heading.”
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day. Need a job? Visit adnewsjobs.com.au.
Have something to say? Send us your comments using the form below or contact the writer at brendancoyne@yaffa.com.au
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.