The Olympics was good to Nine Entertainment, as expected, and masked a general fall in advertising spend in July.
Total advertising spend, as measured by media agency bookings, dropped 7.8% in July despite an initial six-day surge for the games broadcaster.
All major media are reporting lower ad spend, according to numbers collated by Guideline SMI.
This demonstrates that large scale events are still an important part of many brands’ calendars.
However, insiders across the media landscape are still reporting a short market. Brands just don’t seem to have mapped out their plans too far ahead.
“The Olympic-related ad spend heavily skewed the market, and if you look beyond the substantial gain seen from Nine, there was softer overall demand with a drop of 7.8% year on year, highlighting the true state of the advertising industry currently,” said Emilia Chambers, head of strategy, The Pistol.
“The drop isn’t a surprise, with 2024 proving to be a challenging year for many brands as consumers remain considerate in their purchases due to cost of living and no interest rate decreases so far this year.
“However, these figures reinforce the value of aligning to major events, like the Olympics, to provide unique opportunities for reaching new and engaged audiences.
“What makes the Olympics even more important in the world today is the positivity that it brings in what can feel like a never-ending cycle of bad news stories. It showcased successes, united nations, and celebrated the underdogs - everything that the world needs right now.
“While positive, marketers should still carefully consider their objectives before investing in major events and evaluate the potential for increased reach and engagement against the higher costs and increased competition for ad space.
“If done right, event sponsorship or increased exposure over an event period can prove very lucrative for brands.”
Nick Grinberg, head of strategy, Next&Co, said the Olympics special event focus spend is still contrasted by the prevailing cost of living crisis experienced by Australians which didn’t show any signs of abatement in July.
“It is highly likely that this will continue in a sideways/downward trend until Australians see some relief with cost of living and consumer confidence returns,” he said.
Media analyst Steve Allen at Pearman said the Australian Market is fortunate to have the Paris Olympics to stimulate an otherwise poor and lacklustre year.
“What the Summer Olympics most often do is draw out excellent creative and big often, leading category marketers,” he said.
“This stimulates others and category competitors to re-engage with advertising, because it works.
“We have not seen much of this in these July figures, which only add to the run of declines in advertising expenditure. We have only enjoyed two slight, very slight, bumps in advertising and brand investment. The majority so far this year is declines.
“Paris summer Olympics’ were only five and a bit days in this July month, thus much more of an effect in August.
“We also note many, many advertisers have been slow to map out FY2025 brand marketing plans. Many are yet to formulate the whole of fiscal year plan, and we are now into the third month of the fiscal year.
“This flight to major brand advertising for the Olympics should be enough to stimulate the overall market.
“However the RBA drive to put a break on inflation, and thus consumer spending, is a considerable counterbalance. ABS Retail sales confirm the tight market conditions the majority of consumers find themselves in.
“The July tax cuts for the whole population are yet to be felt in the marketplace. Retail Sales growth (in the low 2% year to date) are more than a point behind Inflation, plus, when population growth is taken into account are quite distinctly negative. We think the real effect of tax cuts will not be seen until October or November.
“Cautious times, and not enough consumer spending activity, to give advertisers confidence. The media markets have not yet turned the corner. However the Summer Olympics should be the catalyst for major marketers to get back in the game.
Alfie Lagos, Director and Founder, Lexlab, noted the economic challenges weighing on ad spend.
“Now, the latest SMI data for July 2024 paints a similar picture, with the market showing a clear divide,” he said.“The Paris Olympics provided a significant boost for Nine Entertainment, as brands willing to make bold investments capitalised on the high visibility of the event. “However, outside of this surge, overall ad spend fell by 7.8%, indicating that many brands are sticking to safer, performance-driven channels in response to ongoing economic uncertainty.
“This two-speed market is creating distinct strategies: brands that are ready to take calculated risks are using high-impact opportunities to gain market share, while those focusing on efficiency are ensuring every pound delivers measurable ROI.
“As we move through 2024, this split will likely intensify. Whether your approach is bold or cautious, it’s crucial to stay adaptable and strategically aligned with the evolving landscape.”
Alberto Sanchez, paid media senior director, Orange Line said the drop in overall spending seems to be in line with the current economic uncertainties, possibly hinting at concerns about a looming recession.
"Businesses appear to be tightening their advertising budgets, which is a reflection of the cautious mood we’re seeing across the broader economy," said Sanchez.
"Investment in traditional media, like linear TV, is on the decline year after year, and this trend doesn’t seem to be slowing down.
"With more people turning to digital platforms for their media consumption, especially younger audiences, it’s no surprise. Even though older age groups, particularly those over 70, still lean towards traditional media, we're noticing a gradual shift away from it even in these demographics."
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