Market analysts are closely watching ASX-listed media groups Nine Entertainment and Seven West Media for signs on how far economic headwinds have slowed parts of the advertising market.
The latest industry data, including media agency bookings, suggests the overall market is deteriorating faster than expected (with outdoor media and cinema beating the decline), according to analysts.
Media agencies are pushing hard to keep brands active in the face of economic uncertainty and declining consumer confidence.
The overall advertising market is expected to bounce around for the next few months but end the year slightly ahead.
Media analyst Steve Allen, Pearman’s director of strategy and research, is forecasting a full year rise of 2.95%.
Advertising revenue in the US market is forecast to grow 3.4% this year (down from 3.7% in previous forecasts), according to Magna, the media intelligence and investment unit of global holding group IPG.
And global advertising holding companies, reporting March quarter numbers, are showing, and reporting, growth for the rest of the year at 3% to 5%.
In Australia, trading updates expected in May from major media groups will give more insight into the sharpness of the turn in the advertising cycle.
Both Nine and Seven are pulling in costs to meet a softer market.
Early numbers from (SMI) Standard Media Index, released to subscribers but not yet made public, show free-to-air metro television bookings down more than 15% in March following a 19.5% drop in February.
The dips are magnified by comparison to very strong months the year before.
However, this still means March quarter metro TV tracking down around 17%, a bit weaker than forecasts by industry analysts and media players.
In February, Nine’s last trading update estimated the metro TV advertising market would be down in the mid teens in the March quarter.
And it expected Nine’s total TV advertising revenue down in the low-mid single digits.
Nine's trading update: "While a more uncertain operating environment has limited H2 visibility, Nine continues to outperform the broader market, from both an audience and revenue share perspective.
OzTAM data indicates that Nine, as it forecast in February, may have picked up a greater share of the audience in the March quarter.
Seven West, in its February trading update, said early indications suggested the market may decline mid to high single digits in the half year to June.
However, it then said it had “limited visibility”.
Seven expected BVOD to maintain double digital growth and to grow total TV share.
The network, after reporting flat revenue and a dip in profits for the half year to December, was planning cost cutting to meet a weaker television advertising market.
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.