The latest advertising spend numbers, as measured by media agency bookings, show continuing pull back but the trend year to date appears to be improving.
The SMI (Standard Media Index) for August was down 5.5% overall compared to a record month last year.
But there are some standouts. Sport, including the FIFA Women’s World Cup, lifted TV streaming services 14.3% year-on-year and direct bookings to subscription TV channels grew 14.7%.
Outdoor was up 4.8% to a record, digital ad spend grew 0.5% to another record, and bookings for metropolitan newspaper titles were up 1.1% year-on-year.
Ben Willee, general manager and media director at Spinach, says the ad market continues to struggle in line with consumer confidence.
“Just as sailors get their reputation in storms, tough times are a great opportunity to build brands,” he says.
“As this data shows, not all mediums are created equal and there are still plenty of opportunities for smart agencies and their clients.”
Ben Shepherd, dentsu chief investment officer, says the detail is important when looking at the August results with wider variance among categories than in previous years.
“Automotive (up 9.6%) and insurance (12.9%) are large investment categories demonstrating robust growth," he says.
"At the same time we have formerly reliable advertising investors such as CPG/Food/Dairy, finance and technology which are significantly back for the year to date. Then there is retail which is holding up relatively stable.
“So the overall result of 5.5% decline for August YOY is correct in the aggregate but doesn’t tell the story which is ultimately a heavy pullback by a handful of categories for reasons that are not related to the efficacy of advertising spend.
“I remain surprised at the declines for TV and video overall for August and the full year as it most discussions I am a part of this channel is the one that is being considered most closely by marketers as the path to demand growth, and the radio figure for August was surprising being only down 5% for the month which suggests it’s holding its place on plans.
“Outdoor growth has throttled to 4.8% which was to be expected given the gains in the channel are limited to a few formats (large format across suppliers, street furniture for one in particular) that are at reasonably high levels of sell through.”
Media analyst Steve Allen, Pearman’s director of strategy and research, says supply chain interruptions, in a number of categories, seem to be ironing out.
“The big one for the overall media market is automotive,” he says. “This can, and will, add hundreds of millions over a year.
“However the fundamentals are that the overall market is down every month to date this calendar year, but the trend is seemingly improving. YTD overall -2.7%.
“September should be a slightly better month, especially on the observed evidence of the footy finals, which were very strong, with a wide selection of advertisers. The resultant ratings delivery should instil confidence with a wide range of advertisers.
“Never-the-less, the big picture, the overall media markets remain subdued, only outdoor really able to crow.”
Tahnee Fleming, partnerships director at Initiative, says the Matilda’s broke the internet with streaming platforms under pressure broadcasting the Women’s World Cup, albeit paying off for Seven only from a BVOD perspective with growth in revenue.
“The free-to-air streaming platforms continue to struggle under the weight of Australian sport,” says Fleming.
“With the Olympics in 2024 looming in a catch-up friendly timeslot, streaming platforms that don’t crumble under pressure will be key to advertising investment and consumer experience.
“With VOZ continuing to be the buzzword in 2024, the real test will be how networks finesse their consumer experience to align with the premium rate they are selling at.
“In a market that is advancing towards combining channels to achieve total screens reach, is OOH remerging post pandemic as the more consistent channel with 4.8% increase in investment YOY?”
Gaby Srour, media director at Avenue C, says 2022 was a record-breaking year for ad spend.
And while market sentiment in 2023 has appeared to be soft, the latest YTD SMI figures show 2023 is shaping up to be the second highest ad spend on record (-3% versus 2022).
“Broadcast TV has taken the largest volume hit -14% YTD,” says Srour.
“However we are seeing growth in video streaming both BVOD and FAST channels in particular, with Samsung Ads seeing a 71% increase in direct bookings.
“This category is on track to reach its bold growth predictions of $300 million in ad market revenue within four years.
“On the horizon we will see further ad fragmentation to Video (Broadcast TV + Digital Video) with SVOD platforms entering this space and further optimisations of their ad-tiered offering.”
Steve Allen at pearman says he’s not pessimistic about free-to-air FTA TV revenue especially metro.
“We think TV is going through a moment in time … we think it should end in the next 6-12 months.
“TV is still arguably one of the most powerful communicators, plus it has sheer impact and reach capability in its armoury, by program, and both daily and weekly.
“The recent Matildas Telecast ratings successes demonstrates it is far from in strong decline. The past three years have been highly disruptive. Some normalcy is likely to return, and marketers return to seek sheer impact and cut through.”
"BVOD and subscription TV were the big winners, seeing significant increases year on year, which was driven by Optus and Kayo as the two platforms where consumers could access the World Cup content," says Chambers.
"If you take away anything from the FIFA Women's World Cup it's that there is still much value to be gained from aligning to large events when relevant to your brand, product and target audience. Increased viewership and foot traffic can have significant impacts on a brand's awareness and positioning in market, making it a value opportunity when done right."
Nick Murdoch, managing partner at Yango, says it’s a tough time to be a TV sales executive, down 15.4% year on year is a large chunk of change in TV land.
"The big question is if TV’s down trend is cyclical or structural and it follows newspaper and magazines in a consistent downward pattern," Murdoch said.
"On the other hand while the streaming result is a bit of an outlier with the women’s football world cup, it’s a look into the future and the potential for that space. If streaming channels gain sporting rights, they can do well, it will be interesting to see how Stan does with the rugby World Cup on this month.
"I note that the gambling category was up 21%, which is big dollars, some agencies are going to be left with a big hangover as that party comes to an end!
"Overall the market resilience is positive, down 2.7% on the calendar year is better than what we predicted. However, as usual the all important Q4 performance will ultimately determine if the year ends well, anything under -5% would be a good result given the year on year comparisons to last year’s strong bounce back result."
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