Weakness in metropolitan free-to-air television advertising spend will be revealed when official numbers are released for May media agencies bookings.
Early SMI (Standard Media Index) numbers, not yet made public, show metro TV down 17% in May after a 21% drop in April, industry sources say.
The numbers have a tough comparison to 2022 when government spending was going full tilt ahead of a federal election.
The advertising market is now weaker when compared to a strong bump when COVID-19 restrictions were lifted.
Nine Entertainment, with a strong suit of sports content, has built a bigger share of television advertising but told the market last month that it still expects to end the 2023 financial year with lower revenue than last year.
The media group expects total television advertising revenue for the financial year to the end of June to be lower by a single digital percentage compared to 2022.
This is seen as a "strong outcome" against the backdrop of an uncertain economy.
Market analysts are generally upbeat on Nine because of its growing digital revenue and the fact that its business is spread across business units, including streaming platform Stan.
Over at Seven, that media group has identified further costs to cut as the television advertising market gets squeezed.
In a presentation to a Macquarie Bank conference, the network told investors the total TV market in the March quarter fell by about 11%.
The TV advertising market surged 19% in 2021 to $2.8 billion, racing past 2019’s pre-COVID $2.6 billion.
However, the metropolitan free-to-air TV advertising is now suffering a hangover.
“The market declined 2% in 2022, and the declines have accelerated so far in 2023 to 15%-20%, buffeted by escalating interest rates, waning consumer sentiment and precarious corporate profitability -- a three-pronged kryptonite to advertiser confidence,” writes Morningstar director Brian Han in a note to clients.
“Granted, the BVOD market is still growing at 10%-12%. Unfortunately, that is insufficient to offset the wider market malaise.”
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