The tough advertising market in Australia is unlikely to see dramatic change for the rest of the year, according to REA chief economist Nerida Conisbee.
In a keynote address, she told the 2019 AdNews Melbourne Summit that weak economic conditions can be seen clearly with the Reserve Bank cutting interest rates.
“The unemployment rate is slowly creeping up, we have a global trade war, and we've got China our biggest trading partner with the slowest growth in three decades,” she says.
“All of these things are dragging on the Australian economy, and that has been showing up in advertising spend.”
The latest SMI numbers show agency spend, excluding government, down 1.4% to $6.93 billion for the 12 months to June.
And industry sources report soft conditions continuing into July and August,
Conisbee sees no dramatic change in the months ahead.
“There were a lot of things supporting ad spend in the last 12 months, particularly all that political expenditure with the federal election,” she says.
“But in the last six months we have seen things get markedly worse. So the outlook for the next six months is certainly not looking that great.”
Not all sectors are dragging the ad market.
“There are some areas that are really positive,” she says.
“Travel, particularly the travel websites, is one but also cruising seems to be way up there.
“I think people have still got money and are still employed, but they're looking at things that they can do a lot more cheaply.
“So alcohol has gone up, travel and accommodation has gone up, gambling has gone up.”
Zenith’s forecast for full-year 2019 is that the market will round out at between mid to high 2%. More than 90% of that growth will come from digital.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.