Early data from media agencies shows ad spend lifting in July and August, including a surprise run on domestic tourism and some commercial vehicles, from the deep slump in April and May during the economic fallout from COVID-19
According to the SMI (Standard Media Index), July is only nine percentage points below what it was at this time last year while for August the difference is smaller at six percentage points.
A few sub categories are improving, including bookings for some types of vehicles and domestic tourism.
Industry players are also reporting stronger demand from clients for July and August.
The June quarter will be the biggest fall in ad spend, as reported by media agency bookings, on record. The 40.4% drop in May was a record.
"Australia’s advertising market has been devastated by the COVID pandemic, with SMI reporting record declines in monthly year-on-year ad spend in April and then again in May,” says Jane Ractliffe, the SMI managing director for ANZ.
“But our forward data clearly shows the market has begun to improve and we’re now providing more detail to help media position themselves for the upswing.”
SMI has been collecting forward bookings -- confirmed future ad spend in the payment systems of media agency partners -- for just over a year.
And SMI is now tracking 140 categories of ad spend, up from 40.
“This more detailed data gives the market the extra insights it needs to better assess where and how future advertising demand is shaping up,” says Ractliffe.
Ad spend at one of the most affected categories, travel, fell 92% in May and forward bookings are low with demand for July tracking at only 11% of the value of last year and only 3% of the August 2019 total.
However, domestic travel advertising is surging. Within the travel category SMI tracks seven sub categories, including government tourist bureau activity which is reporting higher demand in July than last year and strong August demand of 64%. Advertising by airlines and travel agents is still very low.
“This stands to reason as regional tourist bureaux are strongly ramping up their promotional activities to encourage people to travel to those areas given to boost the local economies,” says Ractliffe.
The automotive brand category continues to report lower forward bookings but the light commercial sub category is reporting August bookings already above the same month last year.
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