With a federal election looming for 2025, government-related ads will be “the key influence” on the ad market next year, according to Jane Ractliffe, Guideline SMI's APAC managing director.
Ractliffe, speaking at the AdNews L!VE: Brisbane event, said government has been the top growth category in ad spend in 2024 – totalling over $46.5 million to date - due to state elections and the pre federal election run-up of activity.
“If you go back to 2022 in the January to May period in the lead up to the federal election, we saw government ad spend alone add an extra $110 million to the market,” she said.
“That's excluding ad spend from political parties, unions and industry associations, which would add another $50 million to that, so on its own, the increase that we expect to see in government and political party ad spend as a result of the federal election next year should significantly boost the market.”
TV was called out as another growth area for next year, with Ractcliffe saying that for all the talk about TV declining – and the medium is down in 2024, after making up half (50%) of all ad spend a decade ago - the growth in digital as a portion of linear has meant that total video is still close to 40% of the total.
“It's still the most significant media within the Australian landscape,” she said.
“My belief is that, with even better reporting from VOZ Streaming and the like, that total share will start to pick up again, because there's just going to be such an interest in all [forms of] video.”
Automotive and pharmaceutical were called out as two potential dark horse areas for advertisers to watch, with the former being the the largest category for which SMI has ad spend data that is still yet to return to pre-COVID 2019 levels.
“It's still back about $50 million on what it was in calendar year 2019 so there's still a lot of growth there,” Ractcliffe said.
“The introduction of electric vehicles has been a really big spur in terms of the auto ad spend coming back, but it's certainly one of those areas that still has room to grow.
“I was also fascinated to see Robert F. Kennedy Jr appointed as the Health Czar in the US; he’s threatened to ban all pharmaceutical advertising in the US, so if that happens and those American pharma advertisers can no longer invest in American media, they'll be looking to other global markets to spend [their money].”
Ractcliffe did put the dampers on one of the buzziest areas of the year – retail media – saying that while everyone keeps talking about the growth of the sector in this market, Australia is still “very immature” when compared to other countries.
“The vast bulk of the spend within retail media is still below the line,” she said.
“The Cartology’s and Coles360’s of the world are doing an awesome job in trying to make that part of the media world more sophisticated, and to try and pull more of that money above the line, but the reality is that we still don't just have those big retail websites like they do in the US.
“Over the past seven years, the retail media world in the US has grown at a compound annual growth rate of about 34%; it is very, very significant and everyone has to be on Walmart or Amazon.”
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