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Media agency booking numbers, not yet made public, back indications reported by Seven West Media of an improving television advertising market.
Early SMI numbers show metro TV down 5%, which will no doubt increase with final data but still a long way ahead of the negative 13% in December.
Seven West Media’s latest trading update noted an improving advertising market with the March quarter tracking low single digits above last year. And Seven will benefit this half from AFL growth and ad spend during the federal election.
"We're really positive about the state of the industry from an audience perspective, and I'm hoping we're finally starting to see that reflect the ad market conditions," CEO Jeff Howard told analysts in a briefing.
The media group in the half year to December reported a “soft” advertising market resulting in total television revenue dropping 6%.
Nine Entertainment is due to report its results later this month.
Analysts aren’t yet ready to call a trend but see positive signals, calling out a potential TV ad market stabilisation..
They say the February rate cut should also drive a gradual improvement in ad spend over the half year to June.
Analysts at UBS now assume an overall TV advertising spend increase of 2%, revised up the previous forecast of -4%, for the half year to the end of June.
At Macquarie, analysts are starting to talk positives.
“The total TV market, which includes free-to-air TV and BVOD, has been in structural decline for the last 15 years, and commentary from Seven West Media could suggest an inflection point where the industry finds a floor, with BVOD growth mitigating free-to-air TV declines,” they write in a note to clients.
“That said, we are cautious, and note ongoing competition from streaming services.”
Media analysts at investment bank Jefferies haven’t changed their forecasts.
“It is too early to call a broader recovery in the ad market due to the timing of Easter, poor visibility, and easy comps in (March) 3Q,” the analysts said.
Brian Han at Morningstar pointed to a "quiet confidence" brewing in the industry and emerging signs of TV advertising recovery.
"Even if (Seven) management's view of 'broader buoyancy' in the market is short-lived, growth in underlying audience share (43.4%) sets a solid foundation for cyclical rebound.
"Digital within TV could receive a boost from the new AFL digital rights from March, if recent benefits from cricket digital rights are any guide. 7plus digital audience was up 36% in the first half, with momentum likely to be maintained when more (and new) viewers start streaming AFL."
Industry analyst Steve Allen, of Pearman Media, said the Australian advertising recession has been comparatively slight.
“Green shoots are appearing,” he told AdNews. “However at this stage it is more optimism than a solid trend.
“There are signs that advertisers are returning to branding, rather than just promoting for sales.
“Government spending is presently at an all time high, as we are realistically in federal election mode. Thus an artificial boost, which will not be sustained in the mid term.
“A few more listed media related results will come to market in the next week. However we do not expect these to be particularly consistent nor optimistic.
“SMI forward pacing has been on the more positive side recently, however end of months have been only marginally better.
“In our view this will be a slow move forward.”
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