EXCLUSIVE: Wesfarmers significantly boosted its outlay to maintain its position as the country’s biggest advertiser in 2012, but overall media spending was down an estimated 4% year-on-year to $9.593 billion, according to Nielsen.
The contraction of the Australian ad market was driven largely by cuts in the communications, travel and real estate sectors, with declining consumer confidence causing businesses to rein in advertising investment.
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Nielsen Media Practice Group managing director Matt Bruce said: “Rising utility bills, uneasiness about the state of our economy and increasing concerns around job security are all factors fuelling lower confidence levels.”
Retail giant Wesfarmers boosted its main media spend by 15.3% to $246.5 million in calendar year 2012, putting it well ahead of its second-placed rival, despite Woolworths increasing its own spend by a respectable 5.1% to $165.5 million.
The overall retail sector, the biggest-spending advertising category, remained largely static, posting a 0.2% decline to $2.1 billion. Harvey Norman maintained its position as the biggest individual retail advertiser despite cutting its spend by 1% to $106.9 million.
The biggest category declines were posted by communications, down 16.7% to $272.3 million, real estate, down 14.1% to $487.6 million, and travel/accommodation, down 12.6% to $484.2 million. Recruitment advertisers were also feeling the pinch of a tighter jobs market, with overall spend in the category down 31.5% to $146.3 million.
The Federal Government cut its media spend by 17% to $125.6 million, while the two major telcos followed suit. Telstra was down 22% to $71.6 million while SingTel Group slashed its spend by 30.6% to $47.3 million.
It was not all bad news, however. Sixteen of the 39 categories managed to record growth in 2012, led by motor vehicles, up 3.9% to $1.090 billion, insurance, up 7.6% to $356.3 million, and pharmaceuticals, up 11.6% to $275.1 million.
The Victorian Government increased its spend by 16.3% to $88.9 million, driven by a massive increase in advertising by the Victorian Public Transport Department, Ambulance Victoria and the Department of Sustainability and Environment.
Other notable increases were posted by News Corporation, up 16.2% to $62.4 million, Lion, up 33.1% to $50 million, Nissan, up 25.3% to $54.1 million, and General Motors, up 9.3% to $49 million.
Bruce said while media activity for the first few months of 2013 remained soft, promising consumer confidence data from Q4 2012 indicated a rebound in ad spending was on the cards.
“Add to this, low interest rates, increased activity from the federal election later this year, a strengthening US economy and stabilisation of the eurozone – all point to a more positive outlook for the Australian media market.”
This article first appeared in the 22 March 2013 edition of AdNews, in print and on iPad. Click here to subscribe for more news, features and opinion.
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