The latest results from Australian media companies this month will be leading indicators of whether or not local advertising budgets have bottomed out.
Globally, advertising revenue has rebounded for the two biggest digital advertisers players, Google and Meta.
Some analysts see this as a sign that the advertising winter is coming to an end.
In Australia, Seven West Media, Nine Entertainment, News Corp and oOh!media are this month releasing June quarter numbers to the ASX.
The six months to June have been soft for advertising but the market, as measured by media agency bookings, is still seeing underlying growth.
Standard Media Index (SMI) numbers show advertising spend in Australia closed the June financial year on a firm note in the face of a sometimes short term and chaotic market.
Ad spend, as measured by media agency bookings, was down just 0.2% to $8.8 billion in the year to June with underlying growth, stripping out the impact of government spend, up 2.2%.
Analysts at Goldman Sachs say traditional advertising markets have experienced a difficult June half year, setting up for a “soft” set of full financial year results.
“However this ad-market weakness has occurred ahead of any meaningful broader economic slowdown … suggesting that FY24 ad budgets could have bottomed already, ahead of any macro weakness,” they write in a note to clients.
Goldman Sachs rates Nine and News Corp as buys.
The slide in metropolitan television advertising has continued despite passing the hard comparison month of May.
Advertising spend on metropolitan free-to-air television networks, as measured by media agency bookings, closed the June quarter down more than 17%, according to insiders.
The overall TV advertising market surged 19% in 2021 to $2.8 billion, racing past 2019’s pre-COVID $2.6 billion.
Since then the market has started a slide, down 2% in 2022 and accelerating in 2023.
Nine Entertainment told the market in May it expects to end the 2023 financial year with lower revenue than last year.
The media group expects total television advertising revenue for the financial year to the end of June to be lower by a single digital percentage compared to 2022.
Over at Seven, that media group identified further costs to cut as the television advertising market gets squeezed.
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