Ad spend, as measured by media agency bookings, is riding high but the market is unlikely to see big jumps in the next couple of months
SMI (Standard Media Index) numbers have yet to catch up to the drop in government ad spend, which has been lifting the market. Such spend has to stop when an election is called
Advertising spend, as measured by media agency bookings, lifted 2.8% in March with strong gains by digital, cinema and radio.
And forward pacings data from the SMI shows more good months ahead, with early April spend (ex digital) only 2.6% below the same month last year with a week left of trading yet to be included.
Media analyst Steve Allen, Pearman’s director of strategy and research, says the ad market is largely tracking as forecast.
“Next two months will probably not match last year as these two were monster recovery months of growth with April +39.7% and May +70.8%," he says.
“Even with election activity, ad spend is not likely to get close to these. We think we have seen the best quarter of the year in terms of quarter on quarter and month on month comparisons.”
The red hot run by television is continuing.
Both Seven West Media and Nine Entertainment are forecasting a strong run to the end of the financial year.
Nine expects free-to-air TV revenue to be strong in the June half, with EBITDA (earnings before interest, taxes, depreciation, and amortisation) growth of plus 10%.
In the full year to June, Nine expects total television EBITDA growth of more than 20%.
Seven West Media has lifted the EBITDA (earnings before interest, taxes, depreciation, and amortisation) forecast for the full year to between $335 million and $340 million, up from previous guidance of between $315 million and $325 million.
And digital is still being boosted by the consumer switch to online buying during the pandemic.
Over the March quarter, SMI reports overall ad spend up 9.4% with digital 19.2% higher.
Tom Curtain, activation director, Half Dome: “It is unsurprising to see media consumption is continuing to move from traditional to digital, resulting in an increased investment across channels such as BVOD, but also continued interest and strong growth in the programmatic audio space.
“These findings align with what we are seeing across our Half Dome client ad spend, where spend has similarly followed audience consumption for key clients.
“For the first time in two years, there is a sense of stability within the market which is providing the confidence needed for advertisers to further inject spend.
“With events such as the Winter Olympics coupled with the impending announcement of the Federal Election, ad spend was positively impacted and the upward trajectory will continue into this quarter as Government ad spend increases in the lead up to the election on May 21st.
“Looking ahead, it will be interesting to see how broader economic conditions, and increased inflation will impact advertiser confidence and spending, with there being some sentiment in market that certain sectors will be negatively impacted through the back half of the year.”
Simon Reid, national head of partnerships, Initiative: "It certainly is pleasing to see the market continue its trajectory with all channels (excluding Newspapers) in the positive.
"Investment may be up, but there is still some re calibration that will come from the market in terms of share of investment by channel.
"Across this FYTD, television and digital combined now command 77 cents in every ad dollar invested which is only slightly up against the same period last year, however significantly up (+7% points) verfsus the same period across 2020 FY.
"OOH and radio are still undercooked from a share of Expenditure POV in my opinion and given their respective digital offerings in market and the rapid improvement in measurement across both of these channels, I expected to see their SOE increase significantly over the next ywo quarters.
"Total ad spend calendar YTD numbers are up 6%, however this is not as pronounced as the FY comparison but given current political spending and key ad category growth still building momentum such as travel, we are in for another bumper quarter."
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