Australia's media agency market has reported the softest advertising demand in almost ten years.
The February numbers, as reported by Standard Media Index (SMI), show total bookings down 8.3% to $482.9 million compared to a record high in the sme month in 2018.
The SMI has only recorded negative number five times in its 12 year history.
Agencies continue to feel the pinch of a declining interest in linear TV ad spend, with figures showing an 11.4% fall. However, one-off events such as the Winter Olympics and the lead up to the Financial Services Royal Commission boosted TV spend in February 2018.
Both Nine and Seven reported a consistent drop off in TV ad revenue in their results for the first half of fiscal 2019.
All major media are reporting lower bookings, even with government category advertising excluded to normalise the results.
Jane Ractliffe, SMI AU/NZ managing director, says the decline in financial sector ad spend was the primary driver of the market softness.
Other product categories contributing to the malaise included Toiletries/Cosmetics (ad spend -24.9% YOY) and Media companies (ad spend -23.2%).
However, Ractliffe says positive signs come from the government category, with the NSW election and Federal election taking place in the same year.
"But there are also some positive signs in the data with SMI, for example, tracking ad spend by Political Parties and Unions and in February -- with the NSW and Federal elections approaching - we saw this category’s ad spend grow 52.5% to $4.43 million,’’ she says.
"The Television media scored the largest share of this investment (43%), followed by Radio (19.1%) and Outdoor with 14.9% of this category’s media investment.’’
The February result continues a bleak financial year so far, with total bookings dropping 1.2% to $4.56 billion with only the Digital (+2.6%), Outdoor (+6.7%) and Radio (+2.5%) reportin growth.
The SMI reported "some bright spots" including:
- The largest category of Automotive Brand grew its media investment 7.4% in February
- Travel emerged as the third largest category for the first time, driven by ad spend growth from cruise lines (+21.2%) and Government Tourist Bureaux (+30.6%)
- Within subscription TV, the direct (non-automated) market continues to grow with its bookings up 16.7% YOY
- Regional radio grew the value of its advertising sales 1.1%
- SMI launched NZ’s first digital ad format detail, providing that market the first monthly view of online video, audio, display, native and search ad format ad spend.
The latest SMI numbers:
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